It’s a tough time for retail. Whether you’ve heard about Target closing its Canadian stores, or your neighborhood Radio Shack recently shuttered, big chain stores are closing all around us at freakishly fast rates.
It’s never nice to make merry of someone’s bad luck in business. But I need to point out the obvious benefit here: Store-closing sales can mean big savings for shoppers. From fashion lovers flocking to Kate Spade Saturday to Sears shoppers seeking new appliances, it’s a good time for customers to know which stores around them are calling it quits.
The key to getting great deals during close-out sales is to be very, very cautious. Here’s how to be savvy when faced with a liquidation sale.
1. Know the Store
A store in my town has had a “going out of business” sign in its front window for several years. At first, I thought their closure had been pushed back and perhaps there was hope for the shop. But I finally realized: They’re using that closing sign as a way to suck in tourists looking for a deal.
If you’ve seen on the news that a big chain like Circuit City or Wet Seal is going under, you’re in the clear. But if you happen to pass a mom-and-pop shop and aren’t sure if the sale is legit, a quick search on your phone should tip you off to any issues.
2. Research Prices
This tip is especially important if you’re looking for a particular item, like electronics or furniture. You’ll want to enter a liquidation sale with examples of what similar products cost at regular price. You might even want to check out items that are a little out of your budget, just to see what prices to expect at that level. Keep this research on your phone or in a small notebook that you can take along when you’re hunting for bargains.
Why go to the trouble, instead of bounding into a going-out-of-business sale and touching all the shiny, cheap things?
Here’s why: Liquidation sales are about making money, not giving you deals. Many stores go out of business because they’re in a lot of debt. Outside companies often manage close-out sales, and the name of their game is to make as much money as possible in the least amount of time.
So that price tag you’re seeing as the shelves start to empty? It might be way higher than the normal retail price for that product. A 30% discount doesn’t mean much if it just brings the price back to what you’d pay at that other, successful store down the road.
3. Time Your Visit Carefully
The Associated Press reported that a “typical” liquidation sale lasts eight to 10 weeks. Visit early in the sale period, and the discounts might only be 10% or 15%. Visit in the last two weeks of the sale, and you’ll likely get great deals — on the store’s empty, leftover shelving.
My sweet spot is the third week of a closeout. You’ll be able to get some decent deals if you want to buy right away. More importantly, you’ll be able to scope out how much stock is available. If there are only three boxes left of that sound system you really want, you’ll know it’s time to buy.
4. Get Serious About Warranties
Whether you’re looking at a TV or a bicycle, you’ll want to make sure that any advertised warranties are operated through the manufacturer or product brand — not the store you’re standing in. That retail location is going to be out of business in a jiffy, and they’re not going to be answering the phone if you have a problem with a product.
It’s another vote for doing your research before you shop! Brands that offer warranties are usually very up front about it. After all, they want happy customers. Read up on the warranty options for products you might consider at a liquidation sale so that you can buy with confidence.
Want to make me even prouder? Use a credit card when you shop a liquidation sale. Imagine that you bought something that required assembly, and didn’t have time to open the box and read the instructions until a week later. That liquidation sale may have packed up and left town already — leaving you in the lurch if parts are missing or damaged. The Better Business Bureau recommends charging liquidation purchases to get an extra layer of backup that the store can no longer provide.
5. Scope Out Online Classifieds
Businesses post all sorts of stuff on Craigslist when the end of a lease is looming. Check Craigslist or your favorite classifieds site for listings that advertise “retail supplies,” “store closing” or “everything must go.”
These listings may feature remaining products, but more frequently they’ll involve store fixtures. At a bigger store, we’re talking display cabinets or adjustable shelves. At smaller local stores, you’ll likely be able to score wooden hangers, furniture or tools at a huge discount.
But don’t be completely wooed by these listings until you visit the store in question. When you work among retail fixtures every day, you’re likely to forget the little flaws or wear and tear that these fixtures might have. As a savvy customer, it’s best to take your fresh eye to the scene of the sale to judge whether you’re getting a quality product.
Your Turn: Do you shop at liquidation sales? What’s the best deal you’ve found?