Going-Out-of-Business Sales Not Such a Bargain
ABC Investigation Shows Why You Need to Shop Around
By ELISABETH LEAMY and VANESSA WEBER
Nov. 25, 2008 —
(video program included)
Several big chains have announced they will go out of business by the end of the year. So now come the
liquidation sales. Could their bad luck be your lucky day? "Good Morning America" went shopping to find out.
What many people don't realize is that outside liquidation companies run most going-out-of-business sales.
Their job is to get as much money as possible for the inventory.
So, for example, the sign says Linens 'n Things, but it's really not. Six of the largest professional liquidators
own the company now: Hilco Merchant Resources, Hudson Capital, Gordon Brothers Retail Partners, Great
American Group, SB Capital Group and Tiger Capital Group. For these companies, going out of business is a
Labels on Top of Labels
When we shopped at the Linens 'n Things liquidation sale, we noticed something strange. On product after
product we could peel back the surface price tags to reveal the old prices below. For example, the surface price
tag on a Calphalon saucepan said $124.99. But the one underneath said $109.99. Rachael Ray cookware? $199
on the new label, $179 on the old. The tag on a curtain scarf said $39.99 on the top, but peel it back carefully
and there was another price tag for $27.99 below.
Carrying a hidden camera, we asked a clerk why there were price tags on top of price tags. She said that they
were instructed to cover up old Linens 'n Things prices and replace them with the liquidators' prices. Liquidators
hire many of the original store clerks like her to stay on, so they are familiar with how the pricing changes.
When we pointed out that the product originally was cheaper, the clerk said, "It used to be when it was on
clearance. Right now, it's not clearance, it's just a discount. Not great deals at all."
How It Works
Several clerks explained that the liquidators come in before a going-out-of-business sale and raise all prices up
to the regular selling price. Then they discount from there, starting with small percentages off and deepening the
discounts as the sale goes on.
"We had [the] best deals before," a clerk told us. "Now, 20 percent, 10 percent, it's nothing."