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Outlet Malls – Great Buy or Money Drain?

This article was written by in Shopping. 7 comments.


When I was younger, my family and I would make the annual back-to-school pilgrimage to the outlet malls located in a city about 20 minutes from where we lived. As kids, we were always excited to go, because we knew the deals would make it much easier to persuade our parents to let us get the things we wanted.

A recent visit to some other malls had me shaking my head in disbelief. Had I imagined those deals of 15 years ago, or are outlet ‘discounts’ just not what they used to be any more?

A recent MSN Money article highlights the shock I experienced, and documents how the tide has turned in the outlet store industry. Here are a few things that I thought were good to keep in mind:

1. Beware the “Outlet State of Mind”

Just because something is on sale at an outlet store doesn’t mean it’s a good deal. Many consumers are automatically trained to think something is a good buy if their getting it for less than the regular price. I remember comparing prices at one particular outlet store to their regular retail outlet in the mall and found the prices to be almost the same, even though the outlet prices were advertised as “20-30% off”.

The prices were discounted at the outlet store, but they were discounted off of higher prices than the items usually sold for.

Consider this excerpt from the article:

“It’s not the asking price that gets us to spend, researchers believe, but the amount “saved.”

MRIs of shoppers’ brains have shown that spending triggers discomfort. Discounting helps alleviate that, Shell says, “so we associate more with the money we saved than the money we spent.”

Outlet malls exploit shoppers’ discount cravings by setting artificially high reference prices, then marking them down. At one jewelry store, for example, Shell examined a necklace with an asking price of more than $3,000 and a discount price of $800. Its actual value: about $300.”

2. Are you buying an “outlet model”?

Some stores actually create and produce merchandise exclusively for their outlet stores. In the past outlet stores sold slightly damaged or disfigured merchandise, but now you’ll find entirely different styles in some stores.

Of course, there’s nothing wrong with buying a product produced for an outlet store, but there may be quality differences you aren’t aware of.

3. Don’t let the trip convince you to spend.

Outlet malls are purposely located off the beaten path, because the sunk cost in the travel usually motivates people to spend. The author of the article tells of convincing her husband to buy some jeans, saying “Well, we drove all this way, we might as well get something.”

Plan ahead, and know when you’re going and see if you can make the trip worth your while in other ways. We always stopped by a waterfall that was on the way to the store, and went as a family to have “bonding time.”

4. Don’t “Graze”

Just like shopping at the grocery store without a list is a great way to spend more than you planned, heading to buy clothes, luggage, shoes or other outlet items without some planning can be costly as well.

You don’t need a item-by-item list, but having a general idea of what you’re looking for can help guide you. Heading to the outlet stores ‘just to see what’s there’ can be painful for your wallet.

Outlet stores are still a great place to head when looking for a great deal. Being aware of the ‘context’ of the prices and the products you are purchasing will help you be a smart shopper and find those great deals that outlets are known for.

What are some of your outlet store tricks for getting the most for your money?

Source: Are Outlet Malls for Suckers?

Updated February 10, 2011 and originally published September 17, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Jeff is an aspiring advertising professional with goals to start his own business. He is a reformed saver who blogs regularly at Stretchy Dollar in addition to his weekly column at Consumerism Commentary. View all articles by .

{ 7 comments… read them below or add one }

avatar FFB

I’ve definitely had the feeling of needing to buy something because I was there and didn’t want to leave empty handed. But I think if you go with a purpose then you can save lots of money. I’ve been able to get dress clothes for work at significant discounts.

One thing is if you go with the family you should pack drinks, snacks, and food before you go this way you don’t get sucked into buying junk while you are there and you keep your energy levels up. When you start getting hungry and the kids complain it gets tougher to make good buying decisions.

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avatar Craig

Outlet malls are usually do all my clothes shopping. I go about once a year to get a few shirts from a brand I like. I save a few bucks and get new clothes. For me it’s totally worth it but I can see how it can be stretched if not done properly, like anything else of course. You could end up spending hundreds you really didn’t want to.

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avatar KC

I hate outlet malls. They seem like they are full of junk and the prices aren’t that great. I only visit outlet stores I know I’ll use. And I’m focused on the one thing I need.

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avatar BillyOceansEleven

Get on the mailing lists for outlet stores you regularly shop at. We get email and postal mail coupons from Carter’s, Osh Kosh, and Children’s Place Outlet pretty regularly. I’m also on Haggar’s list, which led to tons of awesome deals last Black Friday when they sent me a 40% entire purchase coupon that could be combined with all but a few of their Black Friday specials and other clearance deals. I was able to buy a new suit for less than $70, slacks and jeans for less than $10 a pair. Combining an outlet’s coupons with clearanced items can lead to some real steals.

Definitely beware of the percent off promotions and know what you could buy a similar item for elsewhere. Van Huesen has gotten bad about this recently where they advertise 70% off lowest marked price (which is some obscene suggested retail) and the price after discounts ends up being about what you’d pay for the item at JC Penney almost any day of the week. I haven’t bought anything there in years because their “deals” aren’t really deals.

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avatar thisisbeth

My mom compared prices once. Something she wanted was cheaper on sale in a regular store than it was at the outlet store. Needless to say, we’ve all been wary since. There’s one close enough to my parents’, so when I’m visiting them, I’ll try the outlet mall if I need something (and have left without buying anything), but mostly I just depend on regular stores.

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avatar Monika

We have found the outlet prices exhorbitant compared to regular stores nearby and each time gone to an outlet, returned with hardly any purchase. Another thing we noticed was they rarely carried a full range, but, only select items and we did not want to be forced to pick up from a minor variety of selection

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avatar Peter Luke

I too found outlet malls selling more expensive items than regular stores. And if they have cheap ones, you can be sure that these are items of low quality. Plus, it would have been better if they carried much of the items on my list which they don’t. So better hit the regular stores instead.

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