Outlet stores, as most people understand them, are a place to get a good deal on a high-end
product.
And that’s certainly how they started.
Back in the 1930s, clothing stores offered excess or damaged goods to their employees
and then later started offering those same goods to non-employees.
Shoppers go to outlet stores thinking that they’re going to get steep discounts either
on stuff that was returned and couldn’t be resold or items that weren’t a best seller
last season.
But the truth is that these days, you’re probably not getting that great of a deal.
Chavie Lieber, a Racked reporter, has written about the tactics that brands use to make
shoppers believe they’re getting more for less.
Lieber: The point is to make you think that you’re actually buying products from the brand itself,
when in reality, they’re probably made by third party vendors or brands that license
the name out but were actually never part of the original label or collection.
In a 2014 letter to the Chairwoman of the Federal Trade Commission, four members of
Congress wrote that an estimated 85% of merchandise in outlets were specifically manufactured
for outlets.
They wanted the FTC to investigate unfair marketing practices that make it really hard for the
average shopper to tell which clothes were never actually sold at the higher end
retail store.
Lieber: The ethics are definitely murky especially when you look at how these items are priced
because the labels will say 'originally sold for $350, your price is $150'.
But in reality if the item was made specifically for the outlet is was never sold at $350.
Last year a woman in California actually sued a Michael Kors outlet for misleading her with
this tag.
The truth is these jeans were never really sold at $120.
Kors agreed to pay a class action settlement.
They said they would use the word “Value” instead of “MSRP” on the tag and would
install signs in their stores to help clarify what that means.
Lieber: Neiman Marcus’s vice president of corporate communications, Ginger Reeder, she insists
that the products are not necessarily inferior in quality.
But she’ll either say that the fabrics might be different, the buttons are less expensive,
but certainly because they’re made specifically for outlets they’re probably not designed
by the same team that’s making it for the regular priced stores.
Some brands will signal which items were manufactured for outlets, but you have to know what
you are looking for.
Consumers might not ultimately care if the items were made at a lower quality for the
outlets but they should at least know what they’re buying.