September 27, 2022

Outlet stores aren’t actually the awesome deal you think they are

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j-crewii-1By Pamela Engel From Business Insider

The common assumption about outlet stores is that you’re getting the same goods that are in a regular retail store without the big price tag.

But these “deals” might not be what they seem — Sapna Maheshwari at Buzzfeed writes that some outlets sell a separate line of lower-quality goods that have the same brand name as the items in the company’s regular retail stores.

In a way, these brands — J.Crew, Gap, and Off 5th, Saks’ outlet — are selling knock-offs of their own products. Buzzfeed notes that J. Crew’s outlet items are, according to the company, “based on (full-price) products sold in previous seasons.” These cheaper goods are made specifically for the outlets and might not have been sold in the brand’s regular retail stores at all.

For example, at Off 5th, only 10% of the merchandise is leftover Saks inventory. The rest is private-label goods and merchandise created specifically for the stores by “brand-appropriate” vendors.

Nordstrom Rack, the pricey department store’s popular TJ Maxx-style discount store, does this too. The company notes in a press release: “The Rack carries merchandise from Nordstrom stores and, as well as specially-purchased items from many of the top brands sold at Nordstrom.”

The price tags on outlet products might also be misleading. Usually, the tags have “MSRP” prices that tell shoppers what the item would cost at “full price.” But these items might not have ever actually been sold at that made-up price. This makes a shopper feel like they’re getting a big discount when in reality they might not be. TJ Maxx does this, as does Nordstrom Rack.

LearnVest noted in 2011:

Over the last few decades, as retailers recognized the profitability of attracting Americans looking for a deal (yes—they will use this great quality about you against you!), they began to build an industry around outlet shopping that is completely separate from their regular business.

But there are sometimes ways to tell whether the merchandise came from a full-price store or whether it’s a cheaper version of the real thing — J.Crew Factory (the store’s outlet brand) puts two diamonds under the “r” on its labels and the Gap outlet marks its products with three dots.

PHOTO: AP A J.Crew retail store

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