Hello. I’m Jeff Rosen, District Attorney of Santa Clara County, with an important message for consumers.
Liquidation or Going Out of Business Sales usually claim that "Everything Must Go." Shoppers assume they will get a low-price deal. However, liquidation sales often have prices equal to or more than retailers selling the same things.
For example, imagine that you purchased bookshelves at a going out of business sale. All over the store were signs about the sale and lots of discounts. The tag on your bookshelves said 40 percent off so you bought the item. But when you opened the box, you discovered pieces missing. Your sales receipt said "All Sales Are Final."
You then went online to see how much other merchants charged for the same set of shelves and you found several whose prices were lower than the liquidation price. What? How is that legal?
Here’s how. When a business is closing down it does not run the sale. Rather, a "liquidator" buys the inventory, then sells it. The liquidator has to make as much money as possible so they boost the prices up to the original retail prices during their "Blow Out-Everything Must Go" sale. Gradually, they offer small discounts, starting at about 10 percent off the original price. By the time items are marked 40 or more percent off, they have been sitting around awhile. With a liquidator "ALL SALES ARE FINAL" - you cannot return defective products.
- Do your homework before you go into a liquidation sale - know what you want to buy and what it costs in other stores.
- Avoid stores that always seem to be “going out of business.” It’s just a misleading lure.
- Don’t buy extended warranties.
- Pay with a credit card. If your purchase never shows up, you can make a claim with your card issuer for a refund.
- Beware of last minute sale items. It can be outside merchandise, items that didn't sell at a previous liquidation sale, or reconditioned goods.
My office investigates and prosecutes crimes committed against consumers. But there is no better protection for consumers than to understand the process and do your homework when it comes to shopping at liquidation sales.