Going-Out-of-Business Sales: What You Need to Know About Liquidation Sales at Sears and Other Stores
Sears and Kmart are closing another 46 U.S. stores. Thirteen Kmarts and 33 Sears locations will shut their doors by November. The beleaguered retail company has already closed 100 stores this year.
Liquidation sales at the affected stores will start as soon as August 30. But shoppers looking to score a deal at the struggling retailer might want to pause before whipping out their credit cards. Going-out-of-business sales aren’t always the bargain bonanza they appear to be.
Liquidation sale prices might be higher than normal – at least at first
Most shoppers probably assume that liquidation sale prices are as low as they’ll go, but that’s not always the case.
An investigation by WCCO TV in Minnesota compared prices at a Sears store before and during a liquidation sale and found that shoppers could have saved money on many items by shopping before the sale kicked off. A Craftsman mower was 10% off on the first day of the going-out-of-business sale, or $1,889. A week earlier, the same mower cost $1,499. A Craftsman push mower was $450 during the liquidation sale compared to $399 before the sale began.
The practice isn’t unique to Sears, according to Business Insider. Liquidators often start by raising prices to the manufacturer’s suggested retail price and then discount from there.
Discounts increase as liquidation sales drag on, so if you can wait until the final days you’ll score a better deal. But you’ll have to deal with the trade-off of picked over shelves and limited selection.
The best way to find out if you’re really getting a good deal at a liquidation sale is to comparison shop. Price comparison apps like ShopSavvy will let you know if you can find the same item for less at another store.
Especially in the early days of a sale when discounts are small, there’s a good chance a deal isn’t as great as it looks at first glance. Plus, using these apps might help fight the urge to impulse buy, since you’ll see that if you pass on an item today, you can still get it elsewhere.
Check the gift card rules
If you have gift card for a chain that’s going out of business, find out how long you have to use it. When Toys R Us announced in March that it was closing all its stores, it gave gift card holders just 30 days to use whatever balance remained on their cards, even though some of the store’s locations stayed open until the end of June.
“Your best bet is to spend gift cards right away,” Tom Olk, VP of Risk at Raise told The Cheat Sheet in March. “Otherwise, if there is value left after the company physically closes, you become an unsecured creditor. In the repayment waterfall, you will be placed behind any secured credit holders, such as debt holders or loan providers. As a result, you would receive only pennies on the dollar … if you even receive that much.”
Make sure the sale is real
Not every going-out-of-business sale is legit, warns Reader’s Digest. While there are laws that are intended to protect consumers from fake liquidation sales, you still need to be cautious. If a store in your neighborhood has had “going out of business” signs up for months and shows no signs of shutting its doors, you might want to take your dollars elsewhere.
Some stores will have better stuff
When a store goes out of business, liquidators usually step in to run the final sale. Often, they’ll move inventory to different stores, so that more popular locations get the best merchandise, according to CNBC. In other cases, liquidators bring in items to fill categories where inventory is low.
Another thing to remember: The more desirable an item, the smaller the discount. At the Babies R Us liquidation, diapers didn’t get much of a discount, since those would sell quickly anyway.
All sales are final
At most liquidation events, all sales are final. Returns and exchanges won’t be accepted, so if you don’t like something, you’re stuck with it. Make sure you examine items for defects, damage, or missing parts before you buy. You might also want to use a credit card with purchase or return protection, which can offer relief if what you thought was the deal of the century turns out to be a dud.