Fair Trade FAQ's What makes something fair trade, and how to shop smart to ensure that the person who created that fabulous product is receiving a fair wage in return. :: By Joyanna Laughlin and Everett Sizemore

Buying "fair trade" products sounds like a good thing to do. But what does fair trade really mean? Does it make a difference? And how do you know your money is being used as you intend it to?

1. What does fair trade mean?

According to the Fair Trade Federation, fair trade is “a more equitable and sustainable system of production and trade.” Wikipedia defines fair trade as “an organised social movement which promotes standards for international labor, environmentalism, and social policy in areas related to production of Fair trade labeled and unlabeled goods.” The fair trade movement focuses in particular on exports from developing countries into developed countries.

In plain language, the fair trade movement promotes and supports wages that are fair in the local context, meaning they help artisans and crafts people earn a wage they can live on and that is relative to other skills and trades in their local economic system. Fair trade organisations benefit artisans they trade with by paying between 15 percent and 30 percent of the retail price of products to the artisans.

2.Why should you buy Fair Trade?

2007 brought an explosion of press about social, economic and environmental responsibility around the world. More of us are opening our eyes to socioeconomic inequality, environmental destruction and the exploitation of workers in underdeveloped countries. It can seem overwhelming; one person can only do so much. But it's easier than you might think to vote with your dollars and act on the fact that you're conscious of the impact your purchases have on the lives of other people.

Fair trade also sometimes includes ensuring safe working conditions for artisans, creating sustainable livelihoods for communities in developing countries, and improving social and humanitarian conditions for those communities — which helps ensure that workers can keep earning uninterrupted wages. Fair trade organisations work primarily with small businesses and democratically run cooperatives that agree to reinvest a portion of profits in community projects like health care clinics and childcare programs..

3.How do you know it's really Fair Trade?

While many fair trade organisations are members of fair trade groups such as FTF or of the International Federation of Alternative Trade, FTF requires members to provide detailed financial and business-practice information that's reviewed by a screening committee before being approved; the process can take up to six months. The products FTF members sell often indicate this affiliation (look for trade group logos on product tags).

Keep in mind that some companies that aren't members of trade groups still may pay their artisans a fair wage.