Why you don’t want to get there early and other strategies for the best deals
Retail bankruptcies and cutbacks are creating a wave of going-out-of-business sales. Within the past 12 months, retailers Circuit City, Fortunoff, Linens ’n Things and Mervyns were among the chains that held liquidation sales. And in the first half of 2009, more than 70,000 individual stores are expected to shut their doors.
What most people don’t know: To get real bargains at liquidation sales, you need to be especially careful. That’s because most of these sales are run by outside liquidation specialists that have no incentive to retain you as a customer. They use merchandising tricks that could leave you with the illusion of a great deal that doesn’t save you much money at all.
My strategies for getting the most from going-out-of-business sales…
Skip the first few weeks of the sale. Liquidators typically start with a 10% storewide discount. But there’s a catch: All the prices are first raised up to the full manufacturer’s suggested retail prices (MSRPs) before the markdown is applied. That means many items start out at prices higher than what the store sold them for before bankruptcy. Liquidators are hoping to attract a flood of customers and prey on consumer excitement and naïveté.
Better: Wait until week four. A liquidation sale usually runs six to 12 weeks, with prices dropping by about 10% a week. For shoppers, it’s a cat-and-mouse game because as the discounts get deeper, the product selection becomes more limited. I have found that week four is the sweet spot. That’s when discounts are starting to get substantial, but there’s still decent merchandise available.
Expect no help from salespeople or managers. The liquidation sales staff is a skeleton crew that cannot lower prices (if, say, you want to buy the floor model). They have little or no knowledge to answer your technical questions. They may not even know what merchandise will arrive at the store that week.
Confirm that a bargain really is a bargain. This works best with brand-name items (especially electronics, toys and china), whose prices can be easily compared among various retailers. If you own an Internet-enabled phone, use it right in the store as a price checker. Key the product name and model number into a search engine, such as Google, or a retail or price-comparison site to see what it’s selling for elsewhere. If you cannot use your cell phone, write down the model number of the item you want, then go on the Internet at home. Examples of sites where you can compare prices: www.amazon.com… www.ebay.com… www.consumersearch.com… www.pricegrabber.com. Smart: Call the store’s nearest competitors. They’re sometimes willing to match the liquidator’s sale price. If you can get the same deal, go with the healthy store.
Check the price tag on an item to make sure that it looks like the others throughout the store. Many liquidators augment a store’s existing stock with their own inferior merchandise or leftovers from previous liquidations. If the price tag has a different typeface, format or color, be wary. Example: Electronics that may be brought in as part of excess inventory are sometimes reconditioned but sold as brand-new.
Inspect your merchandise thoroughly before purchasing. Never buy an item if you’re not allowed to open the box first in the store. When you open the box, make sure that the product comes with the appropriate accessories, instruction booklet and manufacturer warranty and that the item is in good condition. Plug in electronics to make sure they work. Most liquidators impose a “no-return, no-exchange” policy. If you get home and realize that there is a problem, you’re out of luck.