Kids go through a lot of clothes. Just ask my washing machine.

In general, I'm not a very frugal person, but when it comes to kids clothing, I am just as happy to pick from a stranger's hand-me-downs as to throw down my credit card at Baby Gap.  At Grove Street Kids in Berkeley, the clothing is as well merchandised as I've ever seen in a used clothing store, so I am just as likely to find something, albeit a gently used something, that I love as I am at a regular retail store.

Also, I take great pleasure in selling back my kids clothes when they've outgrown them.  Children's resale is a beautiful cycle. Bring a shopping bag full of your cleanest outgrown items and the proprieter of the store will filter through, selecting the ones that she can resell. She gives you the option to take cash for your items or credit (a bit more value than the cash) at her store.

Anne Marie at Grove Street Kids is very clear on what she can sell and will not allow you to waste her time discussing the merits of any of the other items in your bag.  Her buying hours are strictly observed - but you can always drop off your bag and come back for it later. If you are intent on selling your clothes, check her website for buying hours and news about what she's looking for based on current season.