Consumer watchdogs note closing sale perils

SAUGUS – Retail chain stores holding merchandise liquidation sales prompted by the tough economic climate often make offers too good to be true, according to the state’s Better Business Bureau (BBB).The BBB has issued a warning to shoppers headed for liquidation sales like those under way at some Circuit City electronic appliance stores.”In this economy, we’re all looking for bargains. Unfortunately, the bargains are not always as advertised at going-out-of business sales and according to Fleming, the holiday shopping season, which often accounts for more than a third of a retailer’s annual sales, failed to deliver in 2008. Retail sales in the U.S. fell 2.8 percent, the first decline since 1995. Due to sluggish sales in 2008, national retailers such as Linens-N-Things and Circuit City entered into bankruptcy and, ultimately, held liquidation sales. And consumers can expect that there will be more bankruptcies and liquidation sales to come from both national and local retailers, she said.When a large retailer such as Circuit City decides to liquidate its assets, the actual sale is undertaken by a liquidator. The liquidator will set the prices and attempt to sell the items quickly and at the highest profit. As a result, some items will actually be marked up for the sale.As Fleming explained, an ABC News report in 2008 revealed that many items sold during Linens-n-Things’ liquidation sale were marked up by as much as 14 percent. More recently, according to a mystery shopping trip by Consumer Reports, Circuit City’s liquidation sale included such “deals” as a big-screen TV that had been marked up by more than $400 dollars and computer printers that had been marked up by as much as 100 percent, Fleming said.The BBB offered the following advice to bargain hunters bound for a liquidation sale:First, confirm that it is actually a deal. Not only will some liquidators actually mark up prices for going-out-of-business sales, a business’s competitors will sometimes drop their prices in order to compete with a liquidation sale, so BBB strongly advises consumers to beware of the hype and shop around.Don’t pay cash or write a check. Use a credit card because they include built-in consumer protections if the company does not deliver on promised goods.Don’t count on customer service. It isn’t a liquidator’s priority and consumers expecting the same level of customer service might be disappointed. Staff on the sales floor will be limited and consumers might be on the hook for delivery of large items. Perhaps more importantly, the company won’t be around in the future, so consumers need to understand that all sales are final and that they don’t have many options if they aren’t satisfied with the purchase.Know the status on warranties, which are often maintained by a manufacturer or a third-party. The warranty will still apply if the retailer goes out of business, but the consumer should always confirm the status of the warranty before buying.Use gift cards as soon as possible. Businesses that have entered into the liquidation process will not be around for long and BBB advises that consumers holding gift cards spend them quickly or risk getting stuck with a worthless piece of plastic.For more advice on how to be a savvy consumer, go online to www.bbb.org.