How do you operate a used bike business without contributing to theft?

It's an interesting question. There's an inherent risk that anything might be stolen if bought used but often the question never becomes a concern.

One method for a shop is to resell bikes that have been part exchanged against a new bike. You then have the background information on the customer plus the relationship which hopefully extends into servicing and providing parts and accessories. This can be quite a big part of a shop income but getting the value of the used bike can be tough and it has to be in serviceable condition.

I wouldn't bother with used parts unless they are vintage. Newer used parts are often ridden to death or can have defects that are difficult to spot until they are in use. As a professional, you save alot of headaches by not recycling parts off old bikes. Vintage parts are frequently old enough that the original owner has died so origin/ownership is a moot point.

Cycle projects that recycle or rebuild bikes for the community or other projects mostly rely on donation bikes or bikes rescued from the tip which they will strip for parts to rebuild more worthy bikes. I don't see there's much problem there as there's no profit in donating stolen bikes to charitable causes so unlikely to attract career criminals, just Robin Hood.

I don't think that there's much of a business opportunity in buying used bikes to resell as used -- the profit margin and income reliability isn't there to make it a worthwhile proposition.

There's a local bike shop that has exactly this model. They buy bikes from walk-ins.

They recently got charged for receiving stolen goods from one guy who turned out to be a convicted burglar, who would bring in a bike a week to sell, but always tried to talk to different staff, and each only saw him once every month or two.

So defence against this could include any of:

• Requiring proof of purchase, seller has to have original paperwork

• Seller has to "seem plausible" ie a dad with a 10 year old in tow, selling a 5 year old's bike looks legitimate, but an obviously overweight man selling a fancy carbon road bike claiming "I don't ride it anymore" is less plausible.

• When buying a bike take a photo of the person who brought it in, and store that. Also ask for a photo ID and get a photo of that too. Tell the seller that this info will be kept and shared amongst all staff and....

• Build relationships with other shops in the same business. Share that buyer info (securely) but prevent someone doing a honeybee from shop to shop.

• Buy on consignment, not for cold cash. So you take the bike, get info, and give a receipt. Once the bike sells only then does the seller get their payment. That way if it turns out to be stolen, the seller gets no money for it and the shop has not "traded in stolen goods"

• Build a working relationship with the local police, especially those officers/staff working in the burglary/theft departments.

• Set up the shop so the sellers have to bring the bike to the back, in past several cameras that are recording.

All this will work to limit the number of bikes that are brought in. Expand that by:

• Find and connect with people who don't ride, but do legitimately source bikes. Rental cleanup businesses, and those who clean out storage lockers might reasonably source bikes without knowing anything about them.
• The police recovery auctions are a good place to acquire bikes with a chequered past, that are now legitimised by the police process.

Train one's staff to smell a problem - if the seller doesn't know a drop bar from a drop bear and their bike is a racey bike then enact more limits and restrictions. Once you know someone, make it easier for them.

Ultimately there will be mistakes, but the shop is in the clear if they've worked hard to limit the risk. And ideally helped the Po with catching some idiots.

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Interestingly, here's the real-world:

• How this shop buys bikes now, and their published requirements http://www.aroundagaincycles.co.nz/buyingbikes
• Run their own register of bought-bikes which can be searched http://www.aroundagaincycles.co.nz/report-a-stolen-bike

Newspaper story from the time https://www.stuff.co.nz/national/crime/115199174/judge-calls-on-police-to-investigate-bike-shop-that-bought-seven-stolen-bikes

If you want to operate such a business and keep a clear conscience, what do you do?

In short: That's easy-peasy: you accept only donated parts/bikes, or require for proof of purchase (so you are safe at 99%). Sure, falsified proof of purchase may be produced, however we are discussing about the conscience and good-faith of the buyer, not about a technical way, right? It is still possible that the used parts are coming from upgrading a stolen bicycle, but chances are fairly low. In the past 10 years, the number of people buying online and or taking picture of the receipt on expensive items increased quite a lot, so proof of purchase should be common.

Not so short: please note that clear coscience and law-abiding are not always aligned. For a more philosophical approach: ask Igor Kenk (video is geo-located in Canada, you will need a VPN to watch it) or read his history as an interactive comic.

You might also talk with your local law enforcement (and pawn shops) to see what they would recommend as a deterrent against people trying to sell stolen equipment. They deal with a much broader range of stolen item concerns than just bicycles, so might have some good suggestions for you to protect yourself while being safe legally with the seller's data you might want to collect or share.

I can't find the article to share with you, but there was a single bike store in Toronto maybe 10 years ago that was shut down when the owner was arrested for dealing in stolen bikes. They paid cash for bikes no questions asked and most of them came from street people who spotted unattended bikes, grabbed them and rode to the store as fast as they could. When the store was shut down bike thefts downtown plummeted. So the most important thing you could do is not pay "no questions asked" cash for bikes and accessories.

Most of the ads I see for places that take used bikes offer store credit, not cash. That won't help someone who has decided never to cycle again, but will help most of the people who want a different bike now. If the store runs a charitable program donating bikes to those who need them, they could offer a receipt suitable for getting an income tax deduction. Both of these things are useful to those who you want to bring you their own bikes, and not very useful to a thief who grabbed a bike and hurried to the store with it.

Asking for a proof of ownership doesn't seem practical, many people do not keep a receipt or even a warranty for ten years, but there can be some solutions.

One point is that a shop selling used bicycles should always include a maintenance/repair business. In this way it can build a long term relationship with people living in the area that will go beyond the single occasional transaction, in this way the owner would know how reliable are those trying to sell a used bicycle.

Then if someone shows up twice or trice in a short perion should be politely sent away. One wrong purchase could be considered a mistake in good faith, two would be more difficult to justify.

Another idea is to always keep up to date with the prices in flea markets and modern online alternatives. Alway offer less than what can be made selling online, people will show up anyway because the shop would require less hassle. But those who make up a living reselling stolen goods would prefer to get as much as possible.