It’s not necessarily breaking news that Americans are looking for a deal, but it is interesting that big retailers are using it against you to grow. Today, there are over 12,000 outlet stores across the country, as retailers realize just how big an effect outlet shopping can have on their potential profit. Stores are searching for new ways to attract more customers amidst a dying retail landscape, which in turn, has catapulted the outlet industry to almost $50 billion in sales.
Many people assume automatic savings when it comes to shopping at outlet stores. But despite an average discount of 38%, some deals aren’t that great. And you’re falling for a bit of tomfoolery by even partaking in outlet shopping. First things first, you took the bait. Here’s why.
From the city to the country
A Consumer Reports survey found that 34% of outlet shoppers traveled over 50 miles from their home in search of a deal, with about 20% going more than 100 miles. But forcing shoppers to journey far and wide to an outlet store is no accident. Businesses found that customers are more willing to spend money when they travel longer distances.
So it makes sense many outlet malls are located in the middle of nowhere. For one, retail prices are often cheaper in the boonies. But these locations also make customers feel compelled to buy stuff that would make their trip “worth it,” regardless of whether the deal is actually a deal. It helps create the illusion that these deals cannot be found elsewhere.
Next: But it gets worse.
The savings are sometimes nonexistent, or fake
Even the tag showing a severe price hack can’t be trusted. An anonymous outlet buyer told LearnVest the prices listed on a tag are often fake. “When I bought merchandise for outlet, I not only determined the selling price as I typically would, I also created a fake ‘full price’ for each item that would get marked on the labels. But, of course, our markup was based on the selling price.”
One of the biggest secrets for saving money while outlet shopping is to do your research beforehand, as many stores offer no discounts at all. Consumer Reports found that while some items are offered at a discount, other items are not. Things like kids clothing and kitchenware were actually more expensive at outlet stores, according to their research.
Next: This next secret is far more disappointing than paying full price at an outlet mall. In fact, it’s the one secret everyone must know about outlet shopping — but hardly anyone does.
The merchandise was probably made specifically for the outlet store
Think about it. Retailers are already quite savvy at forecasting demand through the various seasons, so it’s unlikely these stores are left with tons of extra regular inventory they must pawn off to outlets at a major discount. Because of that, much of what you find while outlet shopping was made just for the outlet — many with minor tweaks and sneaky differences that cheapen the overall price.
Experts say upwards of 85% of the merchandise sold in outlet stores is manufactured exclusively for these stores. These items can be sold for less because these items are made with thinner materials, less expensive buttons, or cheaper fabrics. The percentage of outlet merchandise that is actually factory seconds is around 1% to 5%, according to Rather-Be-Shopping.com.
Next: Wait, there’s something more you must know about outlet shopping.
Some stores are better than others
By now it’s clear that trickery is a common sales tactic employed by outlet malls to get you to spend more money. But that just means you must be savvy when on the hunt. A different Consumer Reports survey found that some outlets offer better sales than others. When it comes to happy customers, Bon Worth, L.L. Bean, Haggar, and Carter’s are among the best, while American Eagle Outfitters, Old Navy, Gap, Nike, and Levi’s tend to offer less than stellar deals.
Outlet retailers, like Saks Off 5th, admitted that just 12% of its merchandise comes from actual Saks Fifth Avenue stores. Another report found that only 20% of items at Nordstrom Rack came from Nordstrom stores, while the rest is bought and sold only for the outlet.
Next: Is shopping the clearance section worth it?
It’s on clearance for a reason
The biggest discounts will be located near the back of the outlet. It’s the store’s way of making sure you comb through the whole inventory before finding the biggest discounts. But even if you do make it to the clearance section with your blinders still intact, you’ll need an eagle eye to spot the truly “good deals.” It is not uncommon for outlet items to have missing buttons, inferior stitching, or other barely noticeable flaws, thus resulting in their lower price. Vet your finds carefully before purchasing, as outlet inventory is often picked through and handled a lot harder than typical retail items.
Next: With all this trickery going on, how can you be sure to score a deal? Here are the three best secrets for saving the most money at outlet stores.
Know the difference between stores
Not all outlet stores are created equal, and knowing how to tell the difference could give you additional insight on the discounts — or lack thereof — you can expect at the store. True outlet stores sell items originally stocked in regular retail stores that have been discontinued or phased out. These are also where you’ll get the best discounts. Factory stores sell goods specifically made for outlet malls. They may look like what you’d find in a retail store, but they’re made differently than their full-price friends — usually with cheaper fabric or less features.
Lastly, there are retail stores looking to capitalize on the foot traffic prone to outlet malls. These stores may purchase retail space in an outlet location without ever offering outlet-like savings. Kyle James from Rather-Be-Shopping.com advises shoppers to look for the word “outlet” on the store sign so you don’t get stuck paying full-price unknowingly.
Next: The best time to go shopping is …
Holiday sales are worth the wait
Planning your outlet shopping ventures around popular holiday sales is another way to maximize savings. Outlet malls are always trying to outshine major department stores and compete for your business, so they’re more apt to provide deep discounts and bring in new stock on holiday weekends. If you can deal with a crowd, Memorial Day weekend, Independence Day, Labor Day weekend, and the weekend after Thanksgiving are regarded as some of the best weekends to shop.
Many say that shopping during the week can lead to better savings as well. Monday and Tuesdays are typically regarded as restocking days, and savvy shoppers can be first in line to pick through highly sought-after merchandise. Midweek is also quieter and less chaotic than weekends.
Next: Resist the urge.
Resist the impulse buy
Outlet shopping makes it easy for you to spend more than you intended. Because you’re already primed to spend more simply due to the effort you’ve exerted to get there, you may need to check your impulsive urges at the door. Loyal Costco shoppers know just how influential those center aisles can be as they rouse your senses with colorful kayaks and convenient household items. Outlet mall stores are no different with strategically placed items near the checkout. But like most stores, these items are simply there to test your will to save and could break your budget if you’re not careful.
Follow Lauren on Twitter @la_hamer.
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