When brightly colored signs with prominent letters shout “Going Out of Business Sale,” “Total Liquidation,” or “Everything Must Go!” you might think you are about to get the deal of a lifetime.
But there are several reasons you should shop with caution – even when merchandise is deeply discounted.
The following tips will help you avoid common pitfalls and get the best deals.
Make Sure the Deals are Real
First things first; always check a company’s reputation on BBB.org before doing business with them.
Look beyond the letter grade rating to read the customer reviews and details of complaints to get an idea of what past customers have experienced.
You may decide the great prices they advertise may not be worth the potential problems that could arise.
Second, according to the BBB Code of Advertising, liquidation and going out of business sales are considered “emergency” or “distress” sales.
Businesses may only advertise this kind of sale if they are actually going out of business. In addition, they have a limited time period to offer such deals.
BBB’s code states, “If such sales exceed ninety (90) days, advertisers must be prepared to substantiate that the offering is indeed a valid emergency or distress sale.” If you notice a business in your area seems to be advertising a “going out of business” or “liquidation” sale for months on end, without ever closing, be wary.
It could be a shady sales practice. Some businesses use these terms dishonestly to draw in customers and pressure them to buy, often by implying limited access to certain merchandise or a small window of time to purchase.
Even in legitimate going out of business sales, some businesses hire third party liquidators to help them get the most money possible from their remaining merchandise.
After all, the business owner is still responsible for paying off any outstanding bills they owe, even after their business closes.
Third party liquidators often mark merchandise up first and then offer a small discount in the first week or two of the sale.
This offers a better return to the business owner, but consumers may unwittingly end up paying more than the original price of the product, even though the seller claims it is discounted.
To avoid falling into this trap, shop around. Compare prices at other stores to make sure the “discounted” item you plan to purchase really is cheaper than normal price.
Think About Returns and Warranties
When a business closes, you may not be granted the same kind of after-sale customer service you’ve come to expect.
Many retailers offer discounted prices on the condition that “all sales are final.”
This means that you may not be able to return items for a refund or exchange items – even if you later discover they are defective.
With this in mind, you’ll want to inquire about what kind of return policy the business offers and how long it will be in place.
If there is no return policy, be sure to inspect items closely before making a purchase. If you are buying electronics, ask to test them. If you are buying clothes, try them on.
If you buy a boxed set of something, ask to look inside the box to make sure all pieces of the set are included.
If an item comes with a warranty, find out who will fulfill its terms.
If a third-party business takes care of repairs on items with a warranty, you may not need to worry.
However, if the business itself is the warranty provider, the terms may be null and void.
Make sure you find out the details before you make a purchase.
Get it in writing; don’t rely on verbal agreements.
Use Up Gift Cards and Pay with a Credit Card
BBB has general tips for shopping at companies that are going out of business.
Two main pieces of advice involve gift cards and credit cards. When a store goes out of business, gift cards do, too.
Don’t let the money on your gift card go to waste. Use them up before the store closes for good.
Also, paying with your credit card offers you the most protection on your purchase.
If a business closes and doesn’t deliver the goods it promised you, you will be able to dispute the charges with your credit card company.
On the other hand, if you paid with cash or even just left a partial cash deposit for an item and the business closes without delivering, you may simply be out of luck.
You could sue the business, but they no longer have assets to pay the damages.
Don’t Make Impulsive Decisions
The goal of going out of business sales is to get merchandise out the door fast. Advertisers take advantage of a sense of urgency and scarcity to pressure consumers into buying things they may not need, simply because the price is too good to pass up. Use good judgment when shopping going out of business sales.
Make sure you really are getting a good deal on a product that isn’t defective.
Going out of business sales can be a great way to save money on products you need, but always proceed with caution.
By following these tips, you can take advantage of sales wisely and avoid making a purchase you might later regret.
The BBB Serving North Central Texas and the BBB serving New Mexico and Southwest Colorado contributed to this article.