Don't Be Fooled By Going-Out-of-Business Sales

With regard to the going-out-of-business sales going on at Circuit City and Linens and Things, the Better Business Bureau advises the following:

Going Out Of Business Sales May Not Be Such A Bargain

What many people don't realize is that outside liquidation companies run most going-out-of-business sales. Their job is to get as much money as possible for the inventory. For these companies, going out of business is a business.

The liquidators come in before a going-out-of-business sale and raise all prices up to the regular selling price. Then they discount from there, starting with small percentages off and deepening the discounts as the sale goes on.

Liquidators have less leeway than regular retailers in pricing their products because they have no factory-to-dealer incentives to fall back on. In other words, when manufacturers are trying to get their products onto store shelves and gain market share, they may discount the price they charge to retailers or provide factory rebates. Retailers can then advertise those rebates and pass the savings along to customers. Liquidators don't have options like that because their store is not going to stick around.

Liquidators rarely sell merchandise at a loss, even near the end of the sale. There are other ways to sell it off, like to overseas markets hungry for merchandise. So rather than trying to empty a store to the bare walls, going-out-of-business sales are more of a play upon human psychology. Liquidators often try to take advantage of that excitement by bringing in extra outside goods that were never sold at the store that is closing.