Be sure those going-out-of-business deals are really deals

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PITTSBURGH — As retailers continue to shutter brick-and-mortar stores amid shoppers’ exodus to the internet, consumers increasingly are facing the lure of liquidation sales hawking out-sized bargains.

But how do shoppers know if they’re truly getting a good deal? After all, the point of a going-out-of business sale isn’t simply to clear merchandise. The No. 1 goal is to make money.

Experts recommend tempering the thrill of all those “Blowout” signs by comparing prices at other stores before plunking down any money.

Liquidators may base discounts on the manufacturer’s suggested retail price, which often is much higher than what stores typically charge. That means goods can end up costing more than they did before the going-out-of-business sale began, particularly in the early weeks.

“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.

Even if that 50-percent-off price tag checks out, shoppers may be able to snag an even bigger discount simply by asking, said Marshal Cohen, chief industry analyst at the retail consulting firm NPD Group in Port Washington, N.Y.

“There will be someone in the store with the authority to sell at a lower price. Don’t be afraid to ask,” he said.

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.

Sales are limited to 30 days unless the operator applies for a 30-day extension, Frasch said.

Those rules are aimed at protecting customers from being duped by never-ending liquidation sales, she said.

There have been cases where stores illegally advertised going-out-of-business sales without ever actually closing their doors. “They do that to lure people into thinking they’re getting a better deal,” Frasch said. “If our office is aware of it, we can look into it.”

Bargain-hunters also should be aware of tricks that liquidators use to encourage impulse buying, Cohen said.

“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. They also may hold some merchandise in the back room to make it appear that some items are in short supply.

“They make the store look messy, and make inventory look like there are only a few left — when there actually are 1,000 of them in the back — to create the illusion that you must buy now or lose out,” Cohen said. “They want you to buy as quickly as possible, at the highest price.”

While discounts get bigger the longer the sale goes on, the risk for consumers who wait is not getting the goods they want.

Shopping liquidation sales also poses other drawbacks.

Because the sales often are handled by outside liquidation firms, stores generally don’t honor gift certificates, coupons or store credit.

There also are no returns. Consumers should inspect merchandise carefully before buying, making sure the instructions and warranty cards are included.

“I literally have seen people buy a product with half of the parts missing,” Cohen said. “If it’s broken or doesn’t work, you are stuck.”