When I drove past the guy dressed as a chicken waiving a sign touting a “Going out of Business Sale” at a local furniture shop for 6 months straight, I started to wonder, “how long does it take for this place to actually go the heck out of business?”. I was also thinking about whether the people that went to the supposed “liquidation sale” in month 1 were getting the same deal as those going in month 6, and whether any of them were really getting a deal at all.
Evidently, this phenomena is warranting the attention of lawmakers seeking to curtail such practices which ultimately appear to be a lousy deal for the shoppers – and misleading. According to this recent article, a rug dealership in Atlanta was fined by the Governor’s Office of Consumer Affairs for conducting a going out of business sale that extended 6 months: “consumers are victimized because they end up paying higher prices for merchandise that they believe has been greatly discounted”.
During the widely publicized Circuit City going out of business sale, many were calling it the Circuit City Going out of Business Scam. In many cases, rather than marking down prices substantially country wide, consumers found that pricing either varied drastically between stores, the pricing was not discounted at all, or much better pricing could be found at common online retailers like Amazon.com. Consumers going to the sale expecting a discount, were in many cases taken for a ride.
Deal or No Deal?
According to this CNN article, “liquidators sometimes set those discounts based on manufacturers’ prices – which can be 10% to 15% higher – rather than the price at the store when it closed.” Some additional experiences and tips regarding liquidation sales if you’re considering trying to score a deal next time you see the signs:
- Liquidators often try to mask the fact that items are refurbished or previously opened.
- Sales are usually final – you will have to go through the manufacturer for defects often times, if they honor such a policy.
- Sale prices tend to be BEST just prior to the start of the liquidation and at the very tail end just before deadline of close. Note that it may be tough to time the pre-liquidation horizon and if you wait until the end, there may not be much good merchandise left.
- If you have an handheld with web access, it would behoove you to just bring it into the store and comparison shop to see if you’re truly getting the best deal; otherwise have someone waiting by the phone.
Incidentally, if you have a Gift Card from a chain that has declared bankruptcy, when you go the the sale with your gift card, you’re out of luck!