COVINGTON - With so many retailers being forced to shut down and advertising big blowout sales, it may be tempting for consumers to rush to get good bargains. But the Better Business Bureau warns that going-out-of-business sales may not be all that advertisers claim.
"In this economy, we're all looking for bargains. Unfortunately, the bargains are not always as advertised at going-out-of-business sales and some consumers don't realize they're getting ripped off when they're supposed to be getting a deal," said Fred T. Elsberry Jr., president and CEO of the Better Business Bureau serving metro Atlanta, Athens and Northeast Georgia.
When a large retailer decides to liquidate its assets, the actual sale will be undertaken by a liquidator. The liquidator will often set prices and attempt to sell items quickly and at the highest profit - as a result, some prices may actually be marked up for the sale, according to the BBB. For example, if an item that regularly retails for $400 has been on sale for $300, during the liquidation sale, it may be advertised as 25 percent off. But that could be 25 percent off the original $400 price instead of the sale price, Elsberry said. Recently, a mystery shopping trip by Consumer Reports revealed that Circuit City's liquidation sale included such "deals" as a big-screen TV that had been marked up by more than $400 and computer printers that had been marked up by as much as 100 percent.
"The reality is you could have bought that at that store for that money or less in the past," Elsberry said.
Or, the item might be available elsewhere at a better deal.
"Shopping around is really important. Don't let somebody going out of business stop you from shopping around," he said.
Waiting toward the end of a sale may be a way to get a better bargain, but because retailers have no set time frame on how long they can stay open once liquidation begins, it may be hard to know when that will be. Also, waiting until the last minute means the selection may not be as good. If there's plenty of the desired item available at the beginning of the sale, waiting for further discounts may be a good idea. If few remain, go ahead and buy, so long as you've already done some comparison shopping, Elsberry said.
"A good rule of thumb is, it's only a sale if you need it," he said.
While the Better Business Bureau handles complaints regarding deceptive advertising, it usually doesn't get involved with price disputes, because that's too hard to regulate, Elsberry said. The Governor's Office of Consumer Affairs enforces the Fair Business Practice Act to keep stores from holding fake periodic "going-out-of-business" sales. The Better Business Bureau offers these tips on shopping liquidation sales:
· Confirm that a deal is a deal. Not only will some liquidators mark up prices for going-out-of-business sales, a business's competitors will sometimes drop prices in order to compete with a liquidation sale. BBB advises consumers to beware of the hype and shop around.
· Use a credit card. Credit cards include built-in consumer protections if the company does not deliver on promised goods and the BBB recommends making purchases with a credit card instead of cash or checks.
· Don't count on customer service. Customer service is not a liquidator's priority and consumers expecting the same level of customer service might be disappointed. Staff on the floor will be limited and consumers might be on the hook for delivery of large items.
· Be aware that all sales are final.
· Know the status on warranties. These are often maintained by a manufacturer or a third-party, which means that the warranty will still apply if the retailer goes out of business. However, the consumer should always confirm the status of the warranty before buying.
· Use gift cards ASAP. Businesses that have entered into the liquidation process will not be around for very long and the BBB advises any consumers holding gift cards to spend them as soon as possible or risk getting stuck with a worthless piece of plastic. Check with competitors to see if they will honor gift cards from the store that is going out of business. Some will in an effort to draw new customers.
For more tips on how to be a savvy consumer, visit www.bbb.org.
Crystal Tatum can be reached at email@example.com.