Outlet Malls - Great Buy or Money Drain?
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?