Is remaking used clothing illegal? What you need to know about the permit requirements and how to avoid them before selling

In recent years, due to growing environmental awareness and the popularity of fashion that emphasizes individuality, businesses that remake and sell used clothing have been attracting attention. However, such activities are subject to legal restrictions, and if you start without knowing, there is a risk that you may be found to be "illegal."

In particular, there are many points to be aware of, such as whether or not you have a secondhand goods dealer license, consideration of intellectual property rights, how to handle waste, etc. In this article, we will explain in detail the legal rules and license conditions that you should know before starting to sell remade secondhand clothes.

If you're just starting out, make sure you're equipped with the right knowledge so you can build a sustainable business with peace of mind.

 

Three typical cases where selling remade used clothing is deemed illegal

When starting to remake and sell used clothing, one thing you should be particularly careful about is "the possibility of unknowingly violating the law."

The act of remaking itself is a creative activity, but depending on how the starting materials are obtained, how they are sold, and how they are processed, it may violate the law.

Here, we will take a closer look at three cases that are likely to be deemed illegal, explaining the background and points to note for each.

If you buy used clothes, remake them, and sell them, you need a secondhand goods dealer license.

If you buy used clothing from someone else, remake it, and then sell it, you need a "secondhand goods dealer license." This is a rule that applies when trading secondhand goods that have been in the hands of consumers, and is stipulated in the Secondhand Goods Dealers Act.

In particular, the following transactions are relevant:

・Remake used clothes purchased from flea market apps and sell them on Mercari etc.

- Arrange clothes purchased at thrift stores and sell them online

・Buy used clothes from acquaintances, turn them into works of art, and exhibit them at events

In these cases, the item is deemed to have been acquired for the purpose of resale at the time of purchase, and without a secondhand goods dealer license this could be considered illegal.

A secondhand goods dealer license must be obtained from the prefectural public safety commission (usually a police station), and even after receiving the license, there are obligations such as keeping records of transactions.

If you continue to trade without knowing, in the worst case scenario you could be subject to heavy penalties, such as imprisonment of up to three years or a fine of up to 1 million yen.

Risk of violating trademark and copyright rights when using brand logos and designs

A common pitfall when remaking secondhand clothing is using brand logos or character designs as is. Even if the item is secondhand, if the original design is protected by copyright or trademark, this could be infringing on those rights.

For example, the following cases apply:

・T-shirts with logos from brands like Chanel and Nike are turned into pouches using only the logos.

・Repurpose T-shirts printed with anime characters into handbags by cutting them out

・Remade design with brand tags rearranged to make them look more intentional

These may be deemed to be "unauthorized use of a trademark" or "infringement of a design right," and the sales activities may violate the Unfair Competition Prevention Act or Copyright Act.

In particular, trademark rights may be affected even if the product has been altered, as long as the registered mark serves the "function of indicating the origin of the product." Any alteration or sale that may lead to the product being mistaken for an unrelated product to the original brand should be avoided.

Depending on how the materials are handled, it may be a violation of the Waste Disposal Act.

When using "old clothing," "torn clothes," or "clothing scheduled for disposal" as materials for remaking, there is a risk of violating the Waste Disposal Act (Waste Management and Public Cleansing Act).

The Waste Management and Public Cleansing Law requires permission to collect, transport, and dispose of items that other people have deemed unnecessary. In other words, the following cases may be illegal.

・Collected a large amount of clothing from local residents who said, "I don't wear it anymore, so I'm giving it to you."
・Sort and reuse clothes collected from collection boxes

・Use clothes put out on garbage day as remake materials

Such actions are judged differently depending on whether they are recognized as "exclusively objects," but generally, collecting and disposing of them without permission is not permitted.

If collection, transportation, etc. is carried out without permission, very severe penalties may be imposed, such as imprisonment of up to five years or a fine of up to 10 million yen (up to 300 million yen for corporations).

Correctly determine which patterns require a secondhand goods dealer license and which do not

When starting to remake used clothing, many people wonder whether they need a secondhand goods dealer license. If you do not understand the difference between situations where a license is required and situations where it is not, you may unintentionally end up operating illegally.

Here, we will carefully explain each point of cases where permission is required, cases where it is not required and there is no problem, and gray areas where it is difficult to make a decision.

Cases where permission is required for flea markets, online shops, and recycled goods purchases

In principle, if you remake and sell secondhand clothes purchased through a flea market app or a secondhand shop, you need a secondhand goods dealer license. This is because you are considered to be "obtaining secondhand goods from others for the purpose of selling them."

The following are some examples:

・Remake and relist used clothes purchased on Mercari

- Arrange clothes you get cheaply at second-hand shops and sell them on an e-commerce site

・Processing and selling clothes purchased in bulk at auctions such as Yahoo! Auctions

Such activities are subject to the Secondhand Articles Business Law, and therefore may be considered illegal if carried out without obtaining permission from the Public Safety Commission.

In addition, if you repeatedly purchase and sell the product, you will be required to obtain a license as this is considered "repeated and continuous business." If you intend to run the business as a business, rather than as a one-time sale, you should be sure to obtain the license.

How to remake and sell your own belongings or free items

On the other hand, you may not need a secondhand goods dealer license for clothing that you previously owned or that you received free of charge from an acquaintance. However, there are certain conditions that you should be aware of.

The cases in which permission is not required are as follows:

・Remake and sell clothes that have been lying around in your closet

・Remaking clothes that an acquaintance gave me for free because they were planning to get rid of them

- One-off listings at flea markets, etc., not for sale

These are not considered to be cases of secondhand goods sales, as they are deemed to have not been acquired as part of a commercial transaction.

However, there is a possibility of a grey area if transactions are taking place under the guise of free provision, or if large quantities are repeatedly transferred, so it is important to keep good records.

When in doubt, pay attention to "purpose for sale" and "transfer of ownership"

The most important points to consider when deciding whether or not you need a secondhand goods dealer license are the following two points:

・Was there a "sales purpose" at the time of purchase?

- Was there a "transfer of ownership" at the time of acquisition?

If you fall under these categories, you will basically be considered a secondhand goods dealer and will need a license. On the other hand, if you just sell clothes that you received for personal use later on, it is highly likely that you will not fall under this category.

If you are unsure, it is best to organize your purchasing methods, quantities, frequency, relationships, etc., and if your sales objectives are clear, obtain a secondhand goods dealer license.

Procedures for obtaining a secondhand goods dealer license and common pitfalls

Obtaining a secondhand goods dealer license is one of the legal procedures required to trade secondhand goods. It is especially important to obtain one if you plan to sell remade secondhand clothes on an ongoing basis. However, there are many cases where the application process does not go smoothly due to the complexity of the procedures and incomplete documentation. In this section, we will explain the specific steps to obtaining a license and the points that beginners often find stumbling over.

Procedures at the police station and list of required documents

Applications for a secondhand goods dealer license are made at the police station that has jurisdiction over the location of the business. The general procedure is as follows:

Basic procedure

1. Preparation of necessary documents
2. Submit to the Public Safety Division of the local police station
3. Content confirmation and review (within about 40 days)
4. Receive your permit (you will be issued a permit number)

List of main documents to be submitted

It is recommended that you get a consultation before submitting the document. Document formats may differ depending on the police station, so checking in advance will help you avoid mistakes.

Business establishment requirements and submission mistakes to be aware of when applying

The most common problem with applications for secondhand goods dealer licenses is "deficiencies regarding the business establishment." If the following points are not met, licenses may not be granted.

Common pitfalls

・I plan to operate from home, but I don't have a dedicated space.
→ In some cases, sharing the living room may not be possible.

・Even though it is a rental property, you have not obtained permission from the landlord to use it.
→ In many cases, a license is required

No nameplate or signboard installed
→You may be judged as not having a system in place to actually operate your business.

Additionally, mistakes or omissions in filling out application documents can also delay the review process. For example, leaving a blank space on your resume, not filling in the date on your pledge, or attaching expired documents are some of the most common mistakes.

The time and cost required to obtain the license

The time and cost required to obtain a permit is as follows:

Required period for acquisition

・About 30 to 40 days (depending on the congestion at the police station)

Average cost

It is a good idea to plan for an initial cost of around 20,000 to 30,000 yen. After permission is granted, you will be required to post the license number and keep records, so be sure to prepare in advance.

The grey area of remade sales that cannot be determined solely by whether or not permission is required

Even if the necessity of a secondhand goods dealer license is clarified, there are still some gray areas in the sale of secondhand clothing that cannot be overlooked. In special cases such as the form of procurement, handling of materials, and consignment sales, even if something appears legal at first glance, it may be a violation.

Here, we will provide a detailed explanation of situations that could be considered blind spots in the law, and provide perspective on how to make decisions and where to seek advice.

Handling purchases and sales through flea market apps and online shops

In recent years, many people have been using flea market apps such as Mercari and Rakuma to remake and sell second-hand clothes, but this is in a very gray area. Although it is considered a "personal transaction" on the app, if you sell it repeatedly and continuously, it is likely to be considered a "business transaction."

For example, the following activities are considered secondhand goods sales:

- Purchase several dozen pieces of used clothing from Mercari each month, remake them, and sell them on Mercari as well
- Purchase items from online auctions almost every week and sell them in a shop format

・Continuously use clothes purchased in bulk on a flea market app as "materials"

At first glance, these may seem like an "extension of hobbies," but because they are continuous, repetitive, and profitable, a secondhand goods dealer license is required.

Recently in particular, app operators have become aware of users' trading habits, and there have been reported cases of accounts being suspended for violating the terms of service.

You should also be careful as you may be subject to investigations by the tax office or police.

Points to note when handling remade items for sale or consignment

When remaking and selling items that have been provided free of charge or on consignment, it may seem at first glance that they are not second-hand goods because you did not purchase them yourself; however, in reality, the legal treatment of the items changes depending on the transfer of ownership and the type of transaction.

Cases requiring caution

- If an acquaintance offers you something for free, but you give them a gift in return
・They remake used clothes that they receive on consignment and give back a portion of the profits to the shop.
・Using materials that have been told by events or organizations that "these are clothes that are being disposed of so you can use them freely"

These actions may be considered secondhand goods sales if they appear to be provided free of charge but are in fact a "relationship similar to purchasing." In addition, since ownership has not been transferred in the case of consignment goods, processing and selling them without permission may be considered a "violation of property rights."

Therefore, it is advisable to record communications in writing and to prepare a commission agreement prior to a transaction.

Materials treated as "exclusive objects" and the misunderstanding of their treatment

"Exclusive waste" refers to materials that are collected with the assumption that they will be reused, such as iron, paper, cloth, etc. Clothing can also be treated as "exclusive waste" if it meets certain conditions, and may be treated differently from regular waste.

However, there is a misunderstanding here too.

・I believe that all fabric products are personal items and can be used freely.
・Collecting clothes without permission, claiming that they can be reused
・They process and sell used clothing collected for "material use," but have not signed a contract with the other party.

These actions are highly risky and may violate the Waste Management and Public Cleansing Act. In order to treat something as an object, there are certain conditions, such as "it can be recycled with certainty" and "it is distributed industrially," and it is not something that an individual can decide on their own.

In order to operate safely, it is essential to act only after making clear contracts and confirmations with local governments and waste disposal companies.

Preparations and checks you need to make to start selling remade used clothing with confidence

To start a business remaking used clothing, it is not enough to simply hone your production skills. You also need to prepare for a stable, long-term business by complying with laws and regulations and creating an environment to prevent problems.

Here, we will introduce in detail from a practical perspective the preparations you need to make and the points you need to check in order to start selling remade used clothing with confidence.

Points to check with local governments and police before starting a business

When selling remade used clothing, you need to be aware of differences in interpretation between prefectures and local government rules. There are many gray areas in the law, so it is important to check in advance whether your activities are OK.

Key points to check

・Check with the police station's Public Safety Division about the need for a secondhand goods dealer license
→ Explain your purchasing and sales methods in detail and ask for their judgment

・Consult with the local government's environmental department regarding collection and waste disposal.
→ Check whether there are any problems with providing items free of charge or taking back items scheduled for disposal.

・Conditions for online sales and sales via flea market apps to be considered business

By clarifying these points, you can prevent future guidance or punishment. Also, if you keep a record of the contents of the consultation, it will serve as evidence for the future.

How to maintain records and documentation to prevent problems

Properly recording and storing information about your suppliers, sales history, and interactions with business partners is essential to avoid risk. Even if it is not a legal requirement, it will serve as evidence in the event of a problem later on.

Main records to be kept

- Supplier information (purchase history, screenshots of interactions)
- Notes on the source of materials and processing details for each product
・Sales records (sales date, price, purchaser information)
- Simple consent forms and records of reasons for providing information free of charge

It is advisable to manage documents digitally and centrally using Google Docs, Excel, cloud services, etc. Even if you store documents on paper, be sure to file them and manage dates thoroughly.

Things to keep in mind to continue doing business safely in the long term

To continue a sustainable secondhand clothing remake business, it is important to comply with laws and regulations, as well as to have a trustworthy attitude and branding. By keeping the following points in mind, you will be able to stabilize your business and gain recognition from those around you.

Key points for safe operation

・Strive to create highly original designs that respect intellectual property rights
・Even after obtaining a secondhand goods dealer license, do not forget to manage your books and post your license number
・Promote transparent activities on social media and e-commerce sites
・Regularly check information from local governments and consumer centers

In order to continue as a business, it is very important to be aware that you are being watched. In addition to taking legal precautions, you should also maintain your position as a business that is trusted by customers and the government.

summary

Selling remade used clothing is an attractive business that allows you to utilize your personal sense and creativity, but if you start it without knowledge of the law and permits, you risk getting into unexpected trouble or engaging in illegal activities.

Here we have comprehensively explained the cases in which a secondhand goods dealer license is required and those in which it is not, points to note regarding the Waste Disposal Act and intellectual property rights, as well as the procedures for obtaining a license and how to deal with gray areas.

It is especially important to have a firm grasp of the "procurement method" and "ownership of materials," and if the purpose of sales is clear, to obtain a secondhand goods dealer license. Also, be sure to check with local governments and police stations, and aim to operate in a trustworthy manner, which will lead to long-term business success.

Whether you are just starting out in the remaking and selling of secondhand clothes or are already involved, this article has provided you with perspectives and guidelines to help you proceed with your business with peace of mind. Armed with the right knowledge and preparation, take your first steps with confidence.