smart spending

7 ways to navigate a liquidation sale

  • Make sure it's a bargain
  • Ask about warranties
  • Check thoroughly the item you're buying

As the list of retail brands going bust grows and everything-must-go sale signs clutter street corners, it's easy to be lured by the promise of big bargains. But liquidation sales can be some of the worst places to shop for deals, so it's important to know the pitfalls.

"Liquidation sales can be worse than the regular promotions available at the same stores before they announce the closing of their businesses," says Tony Gao, a marketing professor and retail expert at Northeastern University's business school in Boston. 

Going-out-of-business sales will grow amid the retail industry's continued slide. The International Council of Shopping Centers predicts 148,000 retail stores will shut in 2009.

But why put up with poor service, crowded lines and the "all sales are final" policies typical of liquidation sales if you aren't even getting a good deal?

Here are seven tips to making a liquidation sale work for you.

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  • Make sure it's a bargain.
  • Ask who is managing the sale.
  • Ask about warranties.
  • Check the item you're buying thoroughly.
  • Pay with a credit card.
  • Check with the Better Business Bureau.
  • Haggle.

Make sure it's a bargain

"You can't just go into the store thinking everything is going to be a good deal. Don't just walk in saying, 'Hey, I want a flat-screen TV,' and walk out with it. Compare prices and don't just presume everything is a good deal," says Alison Southwick, spokeswoman at the Better Business Bureau, or BBB, in Arlington, Va.

Complaints ran rampant after recent liquidation sales at national retailers Circuit City and Linens 'n Things, with items actually priced higher at the sales than in the weeks before the liquidation. In January, the BBB even issued a warning to bargain hunters to be on the alert for false deals, noting that liquidation sales often are marked up for the sales.

ABC's "Good Morning America" went undercover at the Linens 'n Things' liquidation sales and peeled back the price tags to reveal, for example, that a Calphalon saucepan priced at $124.99 during the sale normally sold for just $109.99. Avoid the pitfall of inflated prices by comparing item prices with a competitor. 

Ask who is managing the sale

If the retailer is handling the liquidation sale, the deals will likely be better. But if the chain has contracted out the sale to one of the handful of for-profit liquidators, steer clear, Gao says. Liquidators have a tried-and-true formula for creating impulse buys and seek only to maximize profits. They often make pricing and discounts confusing.

"The labels may look appealing, especially when there are 50-percent-off signs, but don't rush. Often, these discounts are deceptive," Gao says.


Another question to ask before buying: Do I need this? If you set a budget even before walking into the madness of liquidation sales, you're less likely to succumb to a bad deal in sheep's clothing.

Ask about warranties

Because the company is going out of business, many of its consumer warranties won't be available. Make sure ahead of time that you know if a warranty is available. In some cases, manufacturer warranties may not apply. When something is sold "as is," you obviously can't return it to the retailer, but manufacturers might have some legal wiggle room to renege.


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