Rhea Lana's consignment under investigation - KCTV5

Rhea Lana's consignment under investigation for use of volunteers

Posted: Updated:

It's time for back to school shopping and that means many parents will be looking for deals at consignment sales, but consignment sales are now under fire.

Rhea Lana's consignment's founder is under investigation and the federal government is getting involved.

Rhea Lana's of the Northland opens its back-to-school event Sunday. Consignors selling used kids items under Rhea Lana's event name often volunteer their time during the week-long sale, but the Department of Labor said they should be paid.

Barbie Hays is a mom who makes a few extra back-to-school clothing bucks by bargaining off her kids' outgrown items.

"We're having a good time here. It benefits all of us - mothers, fathers, the kids," she said.

She volunteers a few hours at the Rhea Lana's consignment event and receives a 70 percent cut of her items' sales and first dibs to shop.

"The more you volunteer, the greater the benefit. For example, I get to shop an hour early tomorrow over the rest of the consignors, if they didn't volunteer," Hays said.

But the Northland franchise owner Erin Franklin said the company's business model may not work so smoothly for long. Its franchise founder, Rhea Lana Riner, is under investigation for using volunteers to work events at three flagship Arkansas stores.

"We don't feel like they are employees like the Department of Labor is trying to say. We feel they are working for themselves. They're selling their items, they have a vested interested in the items they're selling," Franklin said.

Franklin, whose Northland business is not under investigation, uses 40 out of 200 consignors as volunteers.

"They get to make money and buy what their families need now. It's a great reuse-recycle concept," she said.

She fears the entire consignment industry, including families looking to save some money, will be under threat should the government crack down on its business model.

The Department of Labor said if a volunteer is working a job that a paid employee can do, it is a violation of the Fair Labor Standards Act.

Riner started a Change.org petition a week ago and 10,000 moms have signed it, disagreeing with the Labor Department.

Copyright 2013 KCTV (MeredithCorp.)  All rights reserved.

Powered by Frankly
KCTV 5 News

Online Public File:

Powered by WorldNow CNN
All content © 2018, KCTV; Kansas City, MO. (A Meredith Corporation Station) . All Rights Reserved.
For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices.