Outfoxing Big Retailers’ Outlet Stores

There are many joys that come with discount shopping: scoring finds from your favorite designers, discovering trends you missed last season and snagging wardrobe staples at a steep price cut.

Most customers believe they are indeed finding gems—that what they’re about to buy from a large retailer’s outlet came from their favorite stores a couple of seasons ago, but was either returned, overstocked, or simply not a best-seller.

Not all that it seems
In reality, much of the merchandise at the outlets of major department stores is made or bought specifically for those outlets, with designers and vendors creating similar-looking pieces at a lower cost that often indicates inferior quality.

Neiman Marcus, Nordstrom, Bloomingdale’s, Barneys New York, and Saks Fifth Avenue all have their own outlets. And customers flock to these stores for the brand-name cachet and belief they’re shopping last season’s carefully curated inventory.

However, this isn’t exactly the case. Nordstrom Rack, for example, confirmed to online retail website Racked that only 20 percent of what it sells is clearance merchandise from its stores and website, while the rest is bought expressly for the outlet.

“It is existing merchandise that we are able to purchase from our vendor partners,” Nordstrom Rack’s Naomi Tobis told Racked. “An example could be end-of-the-season closeouts or excess inventory that a brand has and wants to clear out.”

Be cautious about merchandise
And don’t assume every sweater, pair of slacks, or smartphone is a great bargain. Consumer Reports shopped the outlets, and though it did find significant savings on many items, some were actually cheaper in regular retail stores.

So, before you buy, make sure you do some homework to make sure the item you’re interested in is really a good deal. Some merchandise, like clothing, can be made specifically for outlet malls, so you won’t be able to compare prices on all the items you find. Manufacturers usually tweak construction details on their retail goods (using less expensive buttons, fewer stitches per square inch, or thinner materials, for example) to sell them for less at outlets.

The good news: Consumer Reports found very few seconds, irregulars, or returned items at outlet malls. Still, it’s a good idea to inspect goods carefully before you head to the register to be sure they are in good condition.

Also, do some advance reconnaissance. It will help you to stay sane when you get to the outlet. Check the outlet’s website before you go to find its hours. Study the outlet’s map to find the best parking area and park close to the stores you want to visit, so you can get in and out before crowds become overwhelming.

Look for advantages
See whether the outlet malls near you have reward programs. These programs provide exclusive, personalized coupons and sale offers. For example, at Tanger, which operates 38 malls in the U.S., a one-time $10 fee gets you coupon books accessible on your mobile device, free gift cards once you hit certain spending levels, exclusive web offers, and more. And while you’re on the website, look for printable coupons.

Another strategy is to shop the parent stores beforehand. If you see something you like at the more expensive store, there is the chance a replica, or something very similar, might be at the outlet. But take a very careful look. A $500 pair of jeans at Saks probably has a lot more going for it than that $150 pair you are holding at the outlet. Still, the lower costing pair may be all you need, and you’ll go away with jeans very close in look and feel, with the added satisfaction of knowing you saved $350.

Resources: Racked, Consumer Reports