Factory outlet malls are known for big discounts on everything from brand name clothing to luggage and electronics, however, BBB is telling consumers that when they compare factory outlet store prices to retail stores, they may be comparing apples to oranges.
Factory outlets have a reputation of offering discount prices for goods that are either out of season, discontinued, left over from retail outlets or had slight imperfections, such as uneven stitching in a garment.
What some consumers may not know is that many items are new and manufactured exclusively for outlet malls. In many cases, the average person won't be able to tell the difference between an item sold at a retail store from the factory outlet version, but there are differences. The discounted prices reflect different quality merchandise. In the case of clothing, cotton may be substituted for wool, or the item may lack reinforced buttonholes.
Better Business Bureau says consumers should know what they are buying, and do their research, to get the best deals and merchandise that factory outlet stores have to offer:
Is the discount genuine? - Nothing attracts consumers like a sign that tells us that we will find discounted merchandise. However, if the pre-discount price is the Manufacturer Suggested Retail Price (MSRP), the "discount" may not mean much. The MSRP is only a price cap set by manufacturer and is usually undercut by retailers. MSRP for an item might be $150, but that doesn't mean it has ever been sold for that anywhere else.
Ask if merchandise was produced for the outlet - If so, that may mean lower prices for merchandise with a brand name label. Those savings may not be as attractive if the item is not as durable as its retail counterpart.
Know where the savings are - You may find great prices on back-to-school merchandise and shoes, but maybe not on electronics or other items. Visit the outlet's web page to look for specials several days before you intend to head out.
Research the prices - Go online and check the retail price of, for example, a pair of brand name exercise shorts, and then see what the outlet stores are selling it for. Then decide whether the trip to an outlying outlet mall is worth the gas and time.
Shop off hours - The best merchandise can move quickly. Consider going off hours to get first choice. Also, shop at the end of seasons, such as March and August when leftover inventory is brought in from retail stores.
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