Going-Out-of Business Sales

9/6/2001

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Every year thousands of businesses close down, move or sell out and hold special sales to clear out their remaining stock of merchandise. To many consumers, "going-out-of-business sales" indicate big savings and limited-time offers. The Better Business Bureau warns, however, that in some cases such sales may not offer the best buys in town.

There are times when a store must close its doors and liquidate any remaining stock quickly. According to the BBB, and state and local laws, these sales should be held only if their stated or implied reason is a fact. Sales should be limited to a stated period of time and offer only merchandise that is affected by the emergency.

Liquidation, bankruptcy, and going-out-of-business sales usually provide consumers with opportunities for big savings. However, unscrupulous businesses may run "final closing" sales regularly, ringing up big sales because the stores imply a sense of urgency, and consumers believe they are purchasing the merchandise at greatly-reduced prices.

Some stores try to convince consumers they are going-out-of- business over several months, yet they continue to bring in new merchandise. Or a store may post artificially high prices, just so it can claim big savings. For instance, the $500 item marked "half-off" may normally sell for less than $250.

Instead of closing down, a store may reopen under a new name in the same or a new location. Once it reopens for business, it may run another going-out-of-business sale. Another ploy used by deceptive merchants is the going-out-for-business sale, a play on words used to lure customers with the implied promise of savings.

While big savings may be found at a legitimate "everything must go" sale, such savings shouldn't automatically be assumed. Consumers should compare price and quality, and read warranties carefully to find out if the item can be taken to a service center or other facility, since the store is closing and won't be able to offer service on its merchandise.

By comparing prices and understanding the real meaning of advertising promotions, consumers can avoid misleading sales pitches and take advantage of stores offering truly good deals.

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