Thursday focus: Shopping life
Going-out- of-business sales for major retailers Linens ’N Things, Circuit City Stores Inc., Steve & Barry’s LLC, KB Toys Inc. and others have flooded liquidators with goods to sell.
Experts advise shoppers to approach these liquidation sales warily, as there’s no guarantee they’ll have the lowest prices.
“Go in and look around, and you may want to do it more than once,” said Anthony Giorgianni, associate finance editor at Consumer Reports Money Adviser. “You may find the first time that the deals are no better than competitors and online.”When a store is closing, there is a sense of desperation in the air, giving consumers the feeling that they have the upper hand.
“The biggest mistake people make is assuming if stores are closing forever, that it’s automatically a good deal,” Giorgianni said. “Going out of business is a big business itself.”
Sandy Feldman, senior vice president of liquidation company Great American Group, said liquidators set their prices based on a price history that the retail outlet gives them. For instance, a retailer might give liquidators a list of prices from the past six weeks. Those prices help determine how much the liquidator pays for the goods, and subsequently how much a shopper would pay at the liquidation sale.
Sometimes, liquidators mark the price back up to the manufacturer’s retail price before they give the advertised discount of, say, 10 percent, but Feldman rejects that tactic.
While marking up the price may be unethical in the eyes of some, liquidators can do it in certain cases without technically breaking the law.
“We have way too much at stake and too much credibility to mark something up from $99 to $100,” he said. “That practice is … completely not even considered on any of our liquidations ever.
“We go off the lowest selling point we’ve been given,” he said.