Outlet Stores and "Compare At" Pricing

Many bargains at outlet malls, outlet stores, and factory stores aren't what they seem. You might be surprised to learn that outlets mostly sell a separate line of lower-quality, made-for-outlet products. Price tags also might mislead you into thinking that you are getting a better bargain than you really are. Outlet shopping can be fun, but you may not be buying the top-of-the-line items at bargain prices that you think.

You might assume that you are buying the same name-brand products without the big price tag, but this usually is not true. That's right: modern-day outlet stores primarily sell different, lower-quality products than the regular retail stores, made specifically for the outlet to be sold at lower prices. While outlet stores used to sell overstock or past-season items at discount prices, today's outlets instead mostly sell products made or bought specifically for the outlet—with the designers and vendors creating familiar-looking items at a lower cost and quality.

Rarely do today's outlet stores sell the same brand-name products you see at the retail stores.

For example, clothes may be made of less-expensive material, manufactured in different countries with less-expensive labor costs, and have lower quality buttons or zippers, to bring the manufacturing cost down.

Price tags also may be misleading. Everything at outlet stores seems to be on sale or clearance—but you may not really be getting a bargain. "Compare at" and other sales prices may be designed to mislead you into believing that you are getting a big markdown when in reality you are not. For example:

• Tags often have "compare at" prices telling customers what the item would cost at "full price." But the item might have never actually been sold at a retail store or at that higher price, and it might be the price for a higher-quality version of the product.
• Signs saying "25% off," "50% off," or even bigger markdowns off of the "ticketed" price are common, but the items may have never actually been sold at the ticketed price. In other words, the ticketed price could be made up, the products are always "on sale," and the markdowns are fake.

Consumers looking for a lower price who are not concerned about differences in quality may find good deals. And whether or not you think a made-for-outlet product is good for you depends on what you are looking for.

But if you are looking for top-quality name-brand products on clearance, do some research and ask a store employee if the product is the same as at the regular retail store. Check the quality, and check the label to see what materials are used and where the product is made. Also check prices at retail stores or online. If you know what you are buying, you may be able to find some good deals.

Also, be sure to check the store's return policy. You usually are not allowed to return outlet store items at the chain's regular store.

The Federal Trade Commission provides information about Outlet Shopping: What the pros know and FTC Advice: How to Shop Wisely at Outlet Malls. Consumer Reports details: The inside dope on outlet malls.

You may file a complaint about deceptive practices by outlet stores with our office using our online complaint form.