A circular economy (CE) aims to reduce waste and encourages keeping products, components, and materials circulating in the economy. Furthermore, following the European waste hierarchy, preparing for re-use (PfR) is regarded as a better waste management option than recycling. Nevertheless, too many products with a reuse potential end up as waste. This includes residuals from products that have no major value and are therefore not demanded by the current system. As a result, products are prematurely recycled. This contradicts both the priority order of the waste hierarchy and the principles of a CE. This article investigates the potential of and constraints to reusing products that are disposed of at municipal recycling stations. It aims to improve our understanding of these issues and offers possible solutions that could enable municipal waste companies to transition from waste to resource management and reach the upper levels of the waste hierarchy, preparing waste for re-use. Interviews with relevant stakeholders, desk studies and knowledge obtained from participating in waste conferences over the past 3 years are all used to analyze PfR practice at five municipal waste management companies in Denmark. Pioneers with respect to circularity in the waste sector, which have been experimenting with and initiating PfR schemes concerning a range of products, including building materials, furniture, white goods and bicycles, are considered because they support the inner cycles of the CE. However, results reveal that the current transition consists of complex processes connected to an ambivalent legal framework and struggles over access and rights to resources. Further, a more coherent conceptual understanding of PfR is needed as the current understanding has a too narrow focus on restoring product value rather than coupling PfR processes to the market. Thus, challenges to achieving higher PfR rates seem to go beyond engaging in strategic partnerships, creating financial incentives and setting separate targets for PfR. Consequently, a more holistic investigation appears to be necessary to deepen our understanding of processes of resource management and use and the contestation that exists over these. Furthermore, a wider mapping of the actors operating in the tension area of PfR, including their willingness to cooperate and negotiate a zone of agreement, could prove beneficial to practitioners and policy developers alike.