Liquidation sales: not always a deal.(Money)

The next time you pause at a strip-mall furniture store, tempted by banners proclaiming "Everything must go," you should don your flimflam detector. Going-out-of-business, or liquidation, sales promise tantalizingly deep discounts. But you could wind up with overpriced and inferior merchandise, no warranty, and no way to get your money back if that new timepiece turns out to be more cuckoo than clock.

"People need to be very wary of ads offering major discounts of 20 to 50 percent, when they have no way of knowing the original price," says Richard Blumenthal, Connecticut's attorney general. "All sales are likely to be final, so consumers should know that when they buy something they'll likely be stuck with it."

What customers may not know is that going out of business is itself big business. Stores hire liquidation experts to manage every aspect of the sale, including setting prices, running ads, and bringing in salespeople. They may augment existing stock with their own inferior merchandise or with leftovers from previous liquidation sales.

To keep the store from going out of business perpetually and from duping buyers by selling them goods shipped in by the liquidator, states and cities may require stores to apply for a license, file a list of inventory, and limit the duration of the sale.

In March we checked out a liquidation sale at the Hitchcock Chair Company, a 180-year-old manufacturer of handcrafted furniture in Connecticut. Signs in store windows proclaimed "Closing our doors forever" and "Don't miss out." Inside, merchandise had tags with fine print saying that items were "as is" and might never have been sold at the original prices shown.

We saw a Viewpoint Madison leather chair and ottoman marked down $300 from $2,989. After some haggling, a salesperson offered it to us for $1,950 plus a 6 percent delivery charge. Later, we found the same item online at CSN Sofas for $1,864 with free shipping. The online product was new; the one in the store was a floor model. A matching couch that the salesperson offered to us at $1,797 cost $1,419 online.

One customer negotiated a bargain on a Howard Miller grandfather clock. She persuaded the salesperson to reduce the discounted $2,475 price to $1,847. We couldn't find a better price online or at a local store.