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Beware of Liquidation Sales | |
 As many more stores go out of business, it is becoming more common to see the promotional signs announcing "liquidation sales" and "low, low prices" as the stores attempt to reduce the amount of stock remaining in the store. However, caveat emptor - let the buyer beware.
When a store goes out of business, often a liquidation company will step into the shoes as the store manager in order to quickly reduce the in-store stock. The liquidation company will prominently display large yellow “going out of business" signs all over the front of the building and advertise the sale extensively. As people flock to the stores in search of the best deals, many fail to realize just what a liquidation company is all about.
What a Liquidation Sale is All About
Liquidation companies are in business to make a profit. Many will come in shortly after the original company has already reduced merchandise to clearance prices. When the liquidation company moves in, it is highly likely that the clearance level prices that were once prominently displayed in previous sales will be re-priced at much higher prices in order for the liquidation company to turn a profit. For example, a set of bed sheets originally priced by the store at $59.99 may have been reduced at the time of clearance sale to the low price of just $9.99. When the liquidation group comes in and takes control, the same sheets may have the price raised to $79.99. As the liquidation company seeks to turn a profit, they rely on consumers' belief in big signs offering low prices during the so-called liquidation sale.
Additionally, it is not uncommon for liquidators to use the store's familiar name and image to sell merchandise that is not generally a product of the original store. They can capitalize on the popularity of the store to move merchandise at higher prices, as part of the huge sale.
Where Are the Deals?
So how can you find out what kind of deal you are really getting at a liquidation sale? For starters, you can check out the merchandise price tags and see if they overlap the original merchandise. Some companies will make the effort to remove the original tags altogether but some will simply put one on top of the other. If it is obvious that the prices have been increased despite the clearance sale, you may not be interested in hunting for any true bargains. You may also find that if other store locations haven't been liquidated, the same merchandise may be cheaper.
Now that you are aware of what the sales entail, you can use your best judgment or compare prices online prior to shopping.
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