Outlet stores

Factory outlets aren’t exactly a bargain. here’s why

What Penny Hoarder hasn’t been tempted by the thrill of a bargain?

If you like branded goods, you’ve probably been drawn to the local mall hoping to pick up luxury items at great value prices.

Whether you’re looking for mid-range brands like Gap and Banana Republic, or high-end homes, like Coach and Burberry, malls seem like great places to splurge at a fraction of the price.

But do you really get huge discounts at outlet stores? Unfortunately, the answer is usually no.

Here’s the truth about factory outlets that they don’t want you to know.

Do factory outlets offer high quality at low prices?

One of the reasons to consider luxury labels (albeit at an extremely reduced cost) is that they are made to last. Yes, part of their high price is due to the brand name, but it’s also because luxury products are often made from higher quality and higher quality fabrics.

If you don’t care if that Coach bag you bought at an outlet is “so last season”, you can probably expect it to last through multiple seasons and still look fabulous, unlike the pretty ones. bags you could buy for a flight at Target that last less than a year if you’re lucky.

Right?

Not necessarily.

Most consumers assume that malls stock their shelves — and clearance shelves — with excess inventory, end-of-season, or slightly defective factory seconds (think: a seam with a few stray stitches). In other words, the same things you’d find at full price retail stores.

But the truth is that many factory outlets sell their items for less than their retail counterparts because their quality is also cheaper.

Say hello to a dirty little industry secret: products designed for the point of sale.

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

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

This fact is so little known that four members of Congress wrote to the FTC in 2014 asking it to investigate “potentially deceptive marketing practices” by factory outlets.

And in 2017, when outlets dominated, Forbes also pointed out “malls don’t offer real deals because so much of the product is made specifically for locations.”

Essentially, luxury brands get knocked off and then sell these counterfeits to you, whether you realize it or not. At least when you buy a counterfeit from a street vendor in New York, you go into the transaction fully aware that you’re not getting the real deal.

The lure of the mall experience

So maybe the quality of outlet items isn’t up to par with what you’d find in a traditional store – but some outlet retailers focus on shopping experience rather than product appeal. ‘label.

This means you can still wear something made by brands you wouldn’t normally be able to afford. and enjoy a great factory outlet experience.

According to Retail Leader, not only are malls outpacing regular malls in size and selection, but some point-of-sale retailers are designing immersive shopping experiences that encourage consumers to stay longer and shop more.

We spoke to Richard Laermer, PR guru and author of eight books on marketing and bargain hunting, including “Trendspotting.”

“What good does a point of sale bring? Well, probably a good time,” he said. “It’s a great way to spend an afternoon hanging out with friends and shopping for cheap goods.”

But I always get a discount at the outlets…right?

Alright, so you’re getting potentially substandard items that may not even be made by the brand whose label is on it. But at the very least, you get the thrill of buying something for a fraction of its original cost, right?

Maybe.

Some factory outlets like Dooney & Bourke have a reputation for brand quality legitimacy. We asked Catherine Koziol, a savvy shopper who worked at an upscale mall in South Florida.

“Although the prices aren’t much better, in terms of the bags, they seem to be the same as the regular website,” Koziol said.

In his experience, factory outlets sometimes receive “retail transfers”, i.e. the same brand name, same quality merchandise that sells in regular outlets, just in decrease.

“But most products are ‘designed for outlet’, which means cheaper quality,” Koziol said.

This is not the case at Dooney & Bourke, according to Richard Laermer.

“As for Dooney & Bourke, it’s a totally unique idea. Everything is almost entirely online and that’s really cool,” he said. “They also seem to be selling more quality.”

What about online factory outlets?

If it’s the discount you’re looking for and not the pleasant, outdoor, hours-long shopping experience, why not shop at an outlet store online?

Fact: Comparing prices online can save you money. Especially when you’re not tempted by impulse purchases in person.

So if you make your mall obsession virtual, you can save gas money and still score some great deals, especially at these 10 online outlets.

  • Amazon Outlet

  • J. Crew Factory

  • best buy

  • 6 p.m.

  • Neiman Marcus Last Call

  • REI-Outlet

  • Zales Outlet

  • Reebok release

  • Nordstrom Rack

  • Burkes outing

So, are factory outlets even worth visiting?

While all of this information might sound a bit grim, there’s still nothing wrong with shopping at an outlet store — as long as you do it with your eyes wide open as a savvy shopper.

“Most people go to malls as a sport,” Laemer said. “But don’t think there’s a bargain in selling old models of clothes and other mediocre goods.”

Despite a drop in the number of consumers flocking to physical stores, retailers are increasing their presence at points of sale. Simon Property Group, with retail properties in 37 U.S. states, recently launched the first ever National Outlet Shopping Day to entice shoppers with “access to exclusive deals, fantastic finds and gifts”.

So if you still like the idea of ​​fooling your fashionista friends with a “luxury” item they think you spent a fortune on, go for it. Your secret is safe with us.

Contributor Veronica Leone Matthews is a North Carolina-based freelance writer with 11 years of experience writing for nonprofits and higher education. She covers lifestyle topics for The Penny Hoarder. Freelance blogger Kelly Ernst contributed.

This was originally published on The Penny Hoarder, which helps millions of readers around the world earn and save money by sharing unique job opportunities, personal stories, giveaways and more. The Inc. 5000 ranked The Penny Hoarder as the fastest growing private media company in the United States in 2017.