Mon, Jul 06, 2009
Hoping to drum up some business, Jamie Davis walks along Ajo Way east of Interstate 19 during his five-hour shift. At least four major Tucson retailers are having closing sales or will start them soon.
Jeffry Scott/Arizona Daily Star

Business

Beware of liquidation sales

It's easy to rush in and snap up those tantalizing deals, but a little caution can help you avoid regrets
By Dan Sorenson
Arizona Daily Star
Tucson, Arizona | Published: 11.16.2008
Going-out-of-business sales can seem a bright spot for consumers in a gloomy economy.
The screaming signs that advertise them — "Everything must go!" — suggest screaming deals inside.
Tucsonan Wendy Blume, a liquidation-sale fan, said the attraction is twofold: "I could have stuff I couldn't normally afford, but I also like the stories. 'This is the very last one! It was originally $30, and I got it for $10!' "
But Blume, along with consumer and government experts, warned that such sales are not always a shopper's paradise.
Consumers have little or no recourse once money and products change hands. And what little protection there is for consumers in Tucson doesn't apply to most bankruptcy-related closing sales, and apparently is not vigorously enforced.
Going-out-of-business sales are now almost epidemic in Tucson (and elsewhere) — Mervyns, Shoe Pavilion, Linens 'n Things and American Home have either begun their sales or will soon. All are related to their parent companies' bankruptcies.
Going-out-of-business and liquidation sales — as well as fire and other special sales — are regulated by a city ordinance that requires sellers to get a permit and limit sales to 30 days, with a maximum extension of one more 30-day period. It also requires that businesses are indeed going out of business and that the merchandise sold is actually from that company's inventory.
Falsifying the facts of the sale constitutes a Class 2 misdemeanor and is punishable by a fine of up to $750, under the city ordinance. But the ordinance, which dates back to 1953, was later amended to exempt court-ordered sales, such as bankruptcy-forced liquidations and sheriff's sales.
Phony sales less of a problem
Richard Putz, revenue division administrator in the city's Finance Department, said the original ordinance was much more stringent and expensive. The original fee for a permit was a whopping $100. Putz said that was reduced to $25 in 1992, and the City Council eliminated requirements that the business post a bond, observe a waiting period before the sale and provide city staff with a preview of the advertising and merchandise to be sold.
Putz said the ordinance was originally enacted in response to "customer complaints about certain businesses having continuous going-out-of-business sales and bringing in inferior merchandise and passing it off as their original stock."
On the other hand, blatant misrepresentation — phony going-out-of-business, liquidation and fire sales — don't seem to be much of a problem in recent years, at least based on interviews with city staffers and the Better Business Bureau.
The city's ordinance isn't strictly enforced. Ellen Hitchings, of the city's Finance Department, said only four sale licenses had been issued in the last five years. And she said she was not aware of any firms being prosecuted or fined for not getting a liquidation or going-out-of-business sale license. Hitching said there aren't any city staffers who look for sales that should be permitted or that are out of compliance with the ordinance.
And there is no county regulation nor state statute covering such sales, according to representatives of the Pima County Attorney's Office and Arizona Attorney General's Office.
Kim States, of the Better Business Bureau of Southern Arizona, said there are other concerns for consumers.
Don't assume you're getting a good deal just because of the big SALE signs and shopping frenzy.
"You still need to compare prices, particularly on large- ticket items," States said.
States suggested going into such sales with a plan.
"With the economy as tight as it is, rushing to one of these sales and purchasing anything that appears to be a good deal without doing your homework could lead to buyer's remorse, and that will get you nowhere if the business has closed its doors," States said.
Make a list, comparison-shop
She recommends consumers first make a list, comparison-shop, and "know what rights you forgo as a consumer when you make a purchase at one of these sales."
At the top of the worry list is the matter of returning defective merchandise.
"You still need to be familiar with return policies," States said. "In most cases, all sales are final when you purchase something at a liquidation sale. Ask questions."
A notice on Mervyns' home page this past week notified customers that no returns would be accepted after Friday.
That may not be a big deal when the sale merchandise is a pair of socks or a set of dishes. But big-ticket items including jewelry, appliances or furniture could be a problem if they are defective. Manufacturers may honor warranties, but they're not likely to exchange items that don't fit or match your décor.
And the store's reputation may mean little at a liquidation or going-out-of-business sale because the company not only will not be there afterward, it might not even be there at the time of the sale. Outside companies often run the sales, and sometimes even own the merchandise — buying it at pennies on the dollar in a court-ordered sale.
Check before you buy
Sale fan Blume said there are things for consumers to consider other than their legal rights.
"Make sure you know the dimensions and what the (regular) price is," Blume said.
Asked whether she was tempted to buy things she didn't need just because of an attractive price at a going-out-of-business sale, Blume was silent for a few beats, and then said, "Oh yeah. I'm working on that right now."
She said her most recent case of falling for a pretty price was at the Linens 'n Things' sale, where she bought a storage system that didn't fit the items she wanted to store.
"It was something that goes on the back of a door for storage," Blume said. "It was canvas and it wasn't strong enough to hold some of the boxes I wanted to put in there. But at 50 percent off . . . I'll use it for something else."
Blume also said that even when there is an "All Sales Final!" sign in place at a sale, it doesn't hurt to ask. She said she once bought a DVD at a going-out-of-business sale, opened it when she got home and found the movie on the disc wasn't the one on the label.
"I went back. They did graciously trade for the right title," Blume said.
There's another technique she has used to recover from being smitten by a great price on something she didn't need.
"You can sell some of your mistakes on e-Bay," she said.
● Contact reporter Dan Sorenson at 573-4185 or dsorenson@azstarnet.com.