Here’s What Stores Don’t Want You to Know About Clearance Sales

Updated February 17, 2017
by Jamie Cattanach
Contributor
Retail arbitrage

On the surface, clearance shopping looks pretty darn simple:

  • Step 1: Find an item on clearance.
  • Step 2: Buy said item.
  • Step 3: Save money!

But like so many things in life, saving money by cruising the clearance racks sounds so easy — yet it isn’t as simple as it seems.

For example, did you know some stores might label items as “clearance”… even after only taking a single penny off the full price?

And I bet you wouldn’t guess where you might find some of the best clearance prospects out there. (Spoiler: the pharmacy.)

But don’t take my word for it — seriously. My experience with clearance shopping is limited to the three-step process I’ve described above.

Luckily, I used to sit a few desks down from a man who knows a thing or five about clearance shopping. He’s been doing it for six years — and not just when he needs a new outfit.

TPH assistant editor Justin Cupler and his wife, Rissti Rusdhiana, shop clearance so frequently — and so well — they don’t just save money doing it; they actually make money. They resell their finds online at a profit, a process called retail arbitrage.

And while it’s not their main source of income, it’s not too bad for a super easy side gig.

Retail arbitrage
Cupler’s son Kayana Cupler looks at some of the clearance items at their Hudson, Fla., home on Jan. 11, 2017. Sharon Steinmann/The Penny Hoarder

Cupler estimates they’ve netted about $2,000 in the past year just from selling clearance items sporadically. He and Rusdhiana spend no more than five hours reselling deeply discounted items in a typical month.

If they were more consistent, he estimates they could make about $15,000 a year reselling clearance items.

Obviously, I had to pick his brain to learn more. Here’s what I found out.

How This Couple Became Bona Fide Bargain Hunters

Two years in Rusdhiana’s native Indonesia  — and the cash-deteriorating effects of caring for a toddler — drained the couple’s savings.

When they came back to the U.S., Rusdhiana became a stay-at-home mom, and Cupler worked as a freelance writer. Finances were tight, so the pair turned to clearance racks to make ends meet.

“Anything we bought, we insisted on buying clearance,” Cupler says.

Although clearance shopping wasn’t a custom in her home country, Rusdhiana took a shine to scanning the sales racks — big time.

Now, Rusdhiana rarely touches anything on a sales rack that’s less than 90% off its original price; Cupler is “comfortable with 75%.”

Soon, they became the kind of legendary bargain hunters whose savings game you might aspire to.

Back in their former Vermont home, every spare space — the basement closet and the one under the stairs; the heater room where the oil tank lived — was stuffed with metal racks lined with amazing clearance finds.

Retail arbitrage
Cupler and his wife resell their finds online at a profit, a process called retail arbitrage. Sharon Steinmann/The Penny Hoarder

The couple had rows and rows of dented cans (10 cents each!), Halloween candy for years to come and enough holiday decorations to bedeck three homes — even for smaller celebrations, like Valentine’s Day and Easter.

But after figuring out how to use clearance shopping to meet their own needs, the pair had a smarter idea.

By purchasing valuable clearance goods in bulk, they could pass on their savings to others — and make some spare cash for themselves — by selling those items online.

I’ll admit it: When Cupler explained this clearance-flipping gig to me, I was skeptical. Having dealt with flaky Craigslist buyers while trying to purge my home for a move, stocking up intentionally sounded like a headache waiting to happen. What kind of items sell well online, I wondered?

Cupler says he’s had luck reselling boxed sets of perfume, collectable toys, DVDs and video games, and even one-off household items like air conditioning filters.

And since all those goods are relatively small and shippable, he uses eBay, which affords him a larger audience of prospective buyers — as well as the option to host an auction or list an item with a “Buy It Now” price.

So it turns out you can make money by shopping after all. Dream job, here I come!

Pro Clearance Shopping Tips Every Penny Hoarder Should Know

Retail arbitrage
TPH assistant editor Justin Cupler sits with his son Kayana Cupler, 18 months, in front of clearance items he has collected at their Hudson, Fla., home on Jan. 11, 2017. Sharon Steinmann/The Penny Hoarder

Since Cupler and Rusdhiana are literally professional clearance rack shoppers, they’ve learned a thing or two about how to spot great clearance deals — and avoid duds.

As it turns out, not all clearance racks are created equal.

Cupler’s favorite place to clearance shop might surprise you.

“Drug stores are amazing,” Cupler gushed, “especially after the holidays.”

Because the stores are physically smaller, pharmacies are forced to be aggressive about clearing stock — which translates to great deals on everything from holiday decorations to seasonal candy.

Cupler’s also had great luck with a variety of other retailers and gave me the low-down about the specific items he favors at each.

Target

Target’s got an awesome clearance selection, especially when it comes to minor electronics like cell phone and GoPro accessories. Since new models of those items are always coming out, their paraphernalia goes on sale at deep discounts. Cupler was able to pick up some high-cost accessories for five or six bucks and turn them around on eBay for $20 apiece.

But be careful: Sometimes, Cupler has found that Target will label a single shelf “clearance,” but the next shelf down in the rack is full price.

Make sure you read the label carefully, and look for prices that end in “0.04” — those are reportedly the ones on their final markdown.

(Psst — here are a ton of other great ways to save money every time you shop at Target!)

Sears and Kmart

These department stores will offer an additional 50% or 75% off clearance items about once a quarter.

Cupler has used those opportunities to stock up on (and sell) goods like DVDs and video games.

Toys R Us

By browsing Toys R Us’ clearance rack, Cupler found a sweet replica of Delorean, from “Back to the Future,” for just $9.99. He later saw the same model on eBay for over $75. (Sadly, he passed on it because he couldn’t get a solid selling price for it until hours after he’d left the store.)

Big Lots

If you’re willing to be a little lax about expiration dates (and science says you maybe should be), Big Lots is a great place to score edibles that are just about to “go bad.”

While you’d be prudent to be careful about dented or dinged canned goods, Cupler’s been buying and eating these items for years — and I’m no expert, but he looks pretty healthy to me. He even buys clearance Halloween candy in November and saves it for next year’s trick-or-treaters.

The only rule he and Rusdhiana follow? They avoid “anything gooey,” like marshmallows —  because in no time flat, they’ll coalesce into a big, messy clump.

Items to Look Out For, No Matter Where You Shop

Retail arbitrage
A strange fox mask is one of the unusual clearance items Cupler has collected from sale racks. Sharon Steinmann/The Penny Hoarder

No matter what clearance rack you’re cruising, it pays to play by some rules when deciding what to buy — whether you want to take a page out of Cupler’s book and resell the items for a profit, or you’re simply looking for a bargain.

Since seasonal items, like wrapping paper and holiday decorations, always go on sale as overstock, Cupler never buys them at full price. The same goes for clothing, which is almost always overpriced at retail.

And if you’re looking to turn a quick profit, some of the littlest things can have the biggest return.

Cupler’s had great luck selling perfume, GoPro accessories and miscellaneous household goods, like air conditioner filters. Since these items are often on clearance for just a few bucks, it’s easy to make a great return, even at just $10 each.

What NOT to Buy on Clearance

Arming yourself with knowledge about the best clearance deals is one thing. But you also need to know which “deals” are actually duds to be avoided at all costs, and how do you tell the difference?

As far as retailers to avoid, Cupler didn’t offer many wide generalizations. Most stores do offer decent clearance deals, especially at the end of each season.

In many cases, you’ll benefit from doing some detective work.

Cupler has found that if you peel off the price sticker, you’ll sometimes see that the adjusted price is actually higher than the original — which means that the 50% “clearance” actually breaks the price even with the MSRP.

Similarly, Cupler says he once discovered that some “clearance” items at Walmart were discounted by only a single cent.

Cupler also recommends checking eBay and Amazon in the store on your smartphone so you can see if the item is available for a cheaper price online — or if it’s in high-enough demand that you might want to stock up and sell it.

And, as always, never buy something just because it’s on sale. The limited-time availability and scarcity of items on clearance can create a false sense of urgency — but if you’re not going to use something, it’s still a bad deal, even if you only spend a few bucks.

Happy bargain hunting!

Your Turn: What’s your favorite place to shop for items on clearance?

Jamie Cattanach (@jamiecattanach) is a writer whose work has been featured in the Ms. Magazine blog, The Write Life, Nashville Review, Word Riot and elsewhere.

by Jamie Cattanach
Contributor for The Penny Hoarder

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