Finance

Outlet Stores Aren’t Actually a Great Deal. Here’s Why

What Penny Hoarder hasn’t been lured by the excitement of a bargain?

If you’re into brand products, you’ve most likely been drawn to the regional outlet shopping center in the hopes of snagging some high-end products at deep, deep discount rates.

Whether you’re buying mid-range brand names like Gap and Banana Republic, or the higher-end homes, like Coach and Burberry — outlet shopping malls appear like excellent locations to spend lavishly at a portion of the expense.

But are you truly getting big discount rates at outlet shops? Unfortunately, the response is normally no.

Here’s the reality about outlet shops that they don’t desire you to understand.

Do Outlet Stores Offer High Quality at Low Prices?

One factor to think about high-end labels (albeit at a hugely marked down expense) is since they’re made to last. Yes, part of their jacked-up cost is because of the brand, however it’s likewise since high-end products are frequently made from higher-quality materials in a higher-quality way.

If you don’t care that the Coach bag you got at an outlet is “so last season,” you can most likely anticipate it to weather numerous seasons and still look incredible, unlike the adorable bags you may get for a take at Target that last less than a year if you’re fortunate.

Right?

Not always.

Most customers presume outlet shopping malls equip their racks — and clearance racks — with excess stock, end-of-season or somewhat problematic factory seconds (think: a joint with a couple of errant stitches). In other words, the exact same things you’d discover at full-price retailers.

But the reality is, numerous outlet shops offer their products more affordable than their retail equivalents since their quality is more affordable, too.

Say hi to a filthy little market trick: made-for-outlet items.

As the Federal Trade Commission (FTC) reports on its Consumer Information blog site:

“Many stores sell products at their outlets made exclusively for those outlets. These items may be of lower quality than what’s sold in the regular stores. For example, a jacket might not be fully lined, the stripes on a shirt may not match up at the seams, a t-shirt may be made of a lighter-weight fabric, and shoes might be made with synthetic materials rather than real leather. If top quality is important, you may want to shop elsewhere. But if it’s the brand, style, or look that’s key, you may be in the right place.”

This truth is so unknown that 4 members of Congress composed the FTC in 2014 requesting it examine the “potentially misleading marketing practices” of outlet shops.

And in 2017, when outlet shopping was controling, Forbes likewise highlighted “that outlet malls fail to offer real deals since much of the product is specifically made for the locations.”

In essence, high-end brand names are knocking off themselves, then offering those knockoffs to you — whether you recognize it or not. At least when you purchase a knockoff from a street supplier in New York City, you participate in the deal totally mindful you’re not getting the genuine offer.

The Lure of the Experience at Outlet Malls

So perhaps the quality of outlet products isn’t on par with what you’d discover in a conventional shop — however some outlet sellers are concentrated on buyer experience over the lure of the label.

That suggests you can still sport something made by brand names you typically couldn’t manage and delight in a terrific outlet shop experience.

According to Retail Leader, not just are outlet shopping malls continuing of routine shopping malls in regards to size and choice, some outlet sellers are creating immersive shopping experiences that motivate customers to remain longer and go shopping more.

We talked with Richard Laermer, public relations expert and author of 8 books on marketing and deal searching, consisting of “Trendspotting.”

“What does an outlet provide in a good way? Well, probably a good time,” he stated. “It’s a great way to spend an afternoon, hanging with friends and buying cheap goods.”

But I’m Still Getting a Discount at Outlet Stores … Right?

All right, so you’re getting possibly lower-quality products that might not even be made by the brand name whose label is on them. But at the minimum, you get the excitement of purchasing something for a portion of its initial expense, right?

Maybe.

Some outlet shops like Dooney & Bourke have a credibility for brand name quality authenticity. We asked Catherine Koziol, a smart buyer who utilized to operate at a high-end outlet mall in South Florida.

“Although prices may not be that much better, in terms of the bags, they appear to be the same as the ones on the regular website,” Koziol stated.

In her experience, in some cases outlet stores get “retail transfers” which is the exact same brand, exact same quality product that costs routine shops, simply discounted.

“But most of the stuff is ‘made for outlet,’ which means cheaper quality,” Koziol stated.

Not so at Dooney & Bourke, according to Richard Laermer.

“As for Dooney & Bourke, this is a totally unique idea. It’s almost all online and that is really cool,” he stated. “They also seem to sell more quality.”

What About Online Outlet Stores?

If it’s the discount rate you’re after and not the breezy, outside, browsing-for-hours shopping experience, why not patronize an online outlet shop?

Fact: Comparing costs online can conserve you cash. Especially when you’re not lured with in-person impulse purchases.

So, if you turn your outlet shopping center fascination virtual, you can conserve yourself the gas cash and still score some good deals, specifically at these 10 online outlet shops.

  • Amazon Outlet
  • J. Crew Factory
  • Best Buy Outlet
  • 6pm
  • Neiman Marcus Last Call
  • REI Outlet
  • Zales Outlet
  • Reebok Outlet
  • Nordstrom Rack
  • Burkes Outlet

So Are Outlet Stores Even Worth Visiting?

While all this information might feel a bit doom-and-gloom, there’s still absolutely nothing incorrect with shopping at an outlet shop — so long as you do so with your eyes broad open as a smart customer.

“Most people go to outlet malls as sport,” stated Laemer. “But just don’t think there’s a bargain in poor-selling old models of clothing and other goods.”

Despite a recession in customers gathering to physical shops, sellers are increasing their outlet existence. Simon Property Group, with retail residential or commercial properties in 37 U.S. states, just recently released the very first National Outlet Shopping Day to attract shoppings with “access to exclusive deals, fantastic finds, and giveaways.”

So if you still like the concept of tricking your fashionista pals with a “luxury” product they believe you invested a fortune on, go right ahead. Your trick’s safe with us.

Contributor Veronica Leone Matthews is a North Carolina-based freelance author with 11 years of experience composing for non-profits and college. She covers way of life subjects for The Penny Hoarder. Freelance blog writer Kelly Ernst contributed.


Gabriel

A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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