Beware of the Outlet “Bargain” (How to Find the Real Deals)

Outlet stores offer the promise of premium designer goods at budget prices, but do they deliver on that promise?

Not usually.

The truth is, most outlet bargains are a marketing scam. On the surface they appear to offer overstocked or out-of-season goods at rock bottom prices, but in fact, up to 90% of the stock is produced specifically for the outlet market (known as “factory” or “made-for-factory” inventory). While we imagine our outlet find was handmade by a talented craftsman, it was more likely the product of overseas sweatshops.

Photo by Ron Saunders

So, what’s the problem? Shouldn’t we be happy we have the opportunity to buy a designer piece that would otherwise be unaffordable?

The first issue is that consumers are being systematically manipulated by the outlet concept.

Outlets boast big markdowns on their price tags, but these savings are almost entirely illusory. Outlet merchandise typically shows two sets of prices on the price tags, often classified as “Retail Price”(or “MSRP” for Manufacturer’s Suggested Retail Price”) and “Our Price. Customers are led to believe the item was originally sold at the marked “Retail” price, when it fact it was never intended to be sold at any other price point than the lowest one on the tag.  The “deal” we’re being offered is a fraud.

The second issue is quality. Shoppers are attracted to premium brands based on their familiarity with, or belief in, the brand’s quality, fit, materials or other attributes. The “made for factory” garments, however, are not constructed to the same standards, at the same factories or, in some cases, even in the same countries. Shoppers make their purchase expecting to enjoy the attributes of a premium brand, but may walk away with a very different product.

After a few wears, outlet merchandise may fall short of our expectations. Maybe the handbag stitching comes loose. Perhaps the fabric irritates the skin. Maybe the leather exterior begins to crack instead of aging to the soft, buttery leather we expected.

And so our “luxury” purchase soon loses it’s allure. Within months, we relegate it to the back of our closets, or worse, toss it in the trash. Then it’s off to the outlet again to find another “treasure”.

As a blogger dedicated to helping people get more joy out of less clothing, I want shoppers to understand how outlets work to make them make better decisions. I believe that buying less stuff, but high-quality pieces we value for a long time, is a key step towards greater sustainability in a fast fashion world.

While purchasing premium designer pieces is no guarantee we’ll get great satisfaction out of an item, I do believe the outlet mall fraud, which often promises designer quality but delivers a fast fashion product, stacks the odds against us.

The following tips will help level the playing field:

Review the price tag:  Made-for-outlet merchandise typically has a different label than the original brand. Before hitting up an outlet mall, consider stopping by a boutique or your nearest department store to snap photos of the price tags on your favourite brands. If these look different than the price tags at the outlet mall, you are looking at a made-for-factory product. Coach, for example, only uses the illustration of the man driving the horse carriage on it’s boutique items; it’s outlet price tags just say “COACH”.  J. Crew adds two diamonds under the “r” on the label of its factory items while The Gap Outlet label uses three dots. Another key indicator of a made-for-factory item is that the “sale” price is directly printed on the price tag (rather than being manually written or applied with a sticker post-production.) The manual overwrite or sticker indicates that a change was made at some point post-production, perhaps towards the end of a season or due to overstock. A price tag with the sale price built right in from day one is almost surely a marketing ploy.

Look for the dust bag: Handbag brands that come with dust bags, such as Coach and Michael Kors, typically don’t provide dust bags with their made-for-factory products. A dust bag is often a sign of a boutique quality bag.

Check the Clearance section: In many outlet stores, the real deals are hiding in the sparsely populated clearance sections. This makes sense; while the stores will get dozens of each made-for-factory product, they may just get one or two of the out of season pieces left over from the boutique stores. For that reason, these oddball little gems are often displayed other styles and product types on the clearance rack (rather than being part of a central display). Kate Spade, Coach and Michael Kors are all examples of outlet stores that display their boutique inventory in a clearance section.

Ask the Sales’ team: Asking whether or not merchandise is from the boutique collection, or from a factory line, is a legitimate product inquiry. I have found sales associates to extremely transparent about this (if asked).

Stick to All-Premium Brand Stores: Some luxury brands only have a single designer line, even in their outlet stores. Burberry is one of them. If you want to know whether or not a store sells made-for-outlet pieces, just ask.

These tips will help you find the rare bargains at outlet malls, but that doesn’t mean the other pieces are bad purchases. Whether or not something is premium grade designer is not the standard of a good piece. If you find a made-for-factory piece that is of solid quality, looks amazing on you, compliments your lifestyle and fills a gap in your current wardrobe, than it’s a good find (just don’t let the perception of a bargain be your deciding factor).

Want to know more about the myth of the outlet mall? These articles are great references:

Buyer Beware: What You’re Actually Getting at Outlet Stores

Consumers May Not Know They’re Getting Lower-Quality Clothes at Outlet Stores 

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