Shopping at an outlet mall can seem like stepping into heaven. You’ve got all your favorite items from high-end brands at a much affordable price. But sometimes when something seems too good to be true, it actually is. It turns out, outlet stores might not be quite the value we’ve always thought they were.
It’s hard to imagine why a Diane Von Furstenberg dress that’s 50 percent off could not be worth the price tag, but it’s important to realize that many items sold at outlets are actually manufactured specifically for these stores. This often means quality is compromised to make up for the lower price tag. According to Buzzfeed, many of stores such as J.Crew, Gap, and Saks 5th Avenue have a separate line made exclusively for these factory stores. The problem? The reason they’re cheap is because they’re made with lower quality.
Many consumers aren’t aware of this, but the Federal Trade Commission has even written about it on their blog, Consumer Information. The blog post states:
Well, even though I write about consumer issues every day, I have to admit that I was clueless that much of the merchandise sold at outlet stores is manufactured exclusively for them, and may be of lesser quality than the merchandise sold at non-outlet retail locations.
For some people, this difference in quality may not bother them, as they’re still getting clothing and accessories at what seems like a more affordable cost. However, the other problem is that consumers might not actually be getting a great deal on these products.
According to a study from the University of South Carolina Department of Retailing, the manufacturer’s suggested retail price (MSRP) on items listed as outlet merchandise is “significantly higher than the retail prices of the same merchandise found in nearby regional malls.” So while it seems like you’re getting a steep discount on that leather handbag, most people aren’t actually paying that high retail price in reality, and you might be able to find a cheaper option elsewhere. The study also found outlet prices to be about the same as the reduced price of sale items in a retail store.
If this sounds troubling to you, you’re not alone. In 2014, four members of Congress asked the Federal Trade Commission to look into these practices, arguing that outlet stores may be misleading consumers, especially since there are currently no regulations for the word “outlet.”
Whether this deters you from shopping at an outlet store or not, it’s important to know what you’re getting when you’re stepping into one of these stores. It might be worth it to own something from the designer you like, but you can’t always count on it to be quite the bargain you thought it was.
The takeaway? Make sure you compare prices and do your research before you buy something—especially if it’s an impulse buy and especially if it’s something pricey like a designer handbag.