What Consumers Need To Know About Going-Out-Of-Business Sales

By Ryan Velez

Liquidation sales with plenty of big bargains, a dream come true, right? Not necessarily right. Many will tell you that just because there’s a lot of numbers scratched off, you may not truly be getting a great deal.

These goals are two-fold, clearing out merchandise, but also making money. A recent article from The Network Journal provides valuable advice if you are looking to get actual deals at some of these sales.

For a start, liquidators may base discounts on the manufacturer’s suggested retail price. This number is often much higher than what a store will typically charge. As a result, in the early weeks of a liquidation sale, you may actually end up paying more for goods than you would have during typical operations. “Obviously, you want to check to see if other products that are similar or the same are advertised elsewhere” for less, said Sarah Frasch, director of the bureau of consumer protection at the Pennsylvania Attorney General’s office.

The squeaky wheel gets the grease, and don’t be afraid to implement this here as well. Marshal Cohen, chief industry analyst at the retail consulting firm NPD Group in Port Washington, N.Y., says that there will always be someone at the store with the authority to sell at a lower price than what the tag says. Don’t be afraid to ask.

Another important thing to do is be wary of some of the tactics the stores use to try and recoup financially. Frasch says that Pennsylvania regulates going-out-of-business sales by requiring stores to obtain a license from the local municipality. Stores also have to provide a detailed list of inventory, and can’t add to the merchandise after the sale has begun. These sales can only go for 30 days unless the operator applies for an extension. This keeps customers from being tricked by liquidation sales that never actually end, sometimes even illegally.

Sometimes, tactics aren’t illegal so much as they are just tricky. Cohen points out that many liquidation sales try to promote impulse buying. “They get rid of the frills … and make it look like the merchandise has been rummaged through to create a sense of value,” he said. Sometimes, they may hold merchandise in the back to make it look like things are in short supply.

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Bonita_Fambro
Bonita_Fambro

Oh wow! I have always seen many stores claim "liquidation sales" around the seasons or holidays but they would still be in operation many months or years later. I never would have guessed these are the tactics they use to make more money.