Friday, March 06, 2009

Liquidation Sales are a Scam

With 200,000 retail stores expected to close in the next few years, I think I should warn Poopheads about liquidation sales.
The stores lure shoppers in with advertisements saying things like "25% off," "50% off" and "everything must go."
Truth is, you're unlikely to find a good deal on anything you want at a liquidation sale.
Here's why:
Most stores always sell items at prices lower than the suggested retail price. But before the liquidation sale starts, they mark everything up to full value, then take the discount. Just for argument's sake (I'll give a concrete example later), let's say Best Buy sells a $300 TV for $250. Now Circuit City is selling the same TV for 25% off, off $300. That means $225. Is $25 enough incentive to buy a TV?
And since liquidation sales can last months, the real deep discounting doesn't begin until the last few weeks.
By that time, just about everything worth having is already gone.

Other disadvantages include no returns, poor customer service and sometimes cash only. Manufacturer's warranties are still good however.

But despite all this I had to check it out for myself so I went to Circuit City. I checked out the TVs and DVDs, then went to Best Buy to comparison shop. On the way back to Circuit City Chase fell asleep so I had to go home.
But I took Chase back a couple days later and realized that the TVs from the name brands (Sony, LG) were basically the same price in both stores.
The TVs that were really cut-rate were brands I'd never heard of.
They did have some good DVDs on sale, but after the markup, the prices weren't significantly lower.
For instance, I bought "The Express" and "Horton Hears a Hoo." Both movies were $19.99 at Best Buy, and $21.99 at Circuit City.

About a month after that shopping trip, Circuit City announced a deeper price cut.
But by the time we had a chance to go back, the store was decimated. There were still a few large TVs by major brands, but even at 40% discounts they were still mostly priced within the range you could buy them for anytime at Best Buy, Wal-Mart or Target.

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