What Happens to Prices When a Store Closes?

Items may be marked up before they're discounted, so always do a cost comparison before buying stuff at a liquidation sale.
Person holds closed sign.

NOTE: The information below was assembled in 2017, but store closings can happen at any time. Check out our tips for shopping a store closing sale, so you'll know how to navigate these events and save.

Stores come and go. Whether one of your favorite retailers is shutting down for good or simply closing some brick-and-mortar locations, you might wonder this: What's going to happen to everything on store shelves? Is now the time to stock up on clearance bargains?

The answer to all of these questions is... it depends. In the past, we saw 90% off at Aeropostale after it filed for bankruptcy. But when Sports Authority shut down, we recommended shoppers avoid its in-store liquidation sales. While you can find fantastic savings at these events, not everything marked with a sale tag is a good deal. In fact, you could find "clearance" items with a sale tag stuck over a lower price!

Learn how store closing sales affect prices and stock, and how you can be a smart shopper during these events.

Expect Discounts on Seasonal Items

One thing you can definitely expect from store closing sales, like those at some Macy's, Sears, and Kmart locations? Different stock from a traditional "going out of business" sale.

"When you're looking at companies that are going out of business, they're trying to get rid of everything including furniture. So they're really cleaning up the house," says Ana Serafin Smith, senior director of media relations for the National Retail Federation. "When we're talking about store closures, the items you're going to see mostly on sale will be seasonal items."

SEE ALSO: Is Your Local Macy's, Sears, or Kmart Closing?

That's not terribly unlike the sales that happen at stores staying open, as retailers offer discounts to get rid of off-season items that aren't selling — like holiday goods or seasonal clothing. But if you're willing to commit to next year's wardrobe today, discounts at closing stores may be higher than you'd see elsewhere.

The rest of the store's stock probably won't be highly discounted... or there at all. "The big, big ticket items are more than likely moving to stores that are remaining open," Smith says. "So if you had your eye on that Canada Goose jacket that's very popular right now, it's probably not going to be on sale.

"They're going to grab that item and push it to another location where the item could move at full price."

In this way, closing sales can be a lot like browsing the clearance racks at your local department store. Sure, you'll find good deals, but they're probably not good deals on the items you really want.

2 Tips for Shopping Store Closing Sales

If you're planning to shop an upcoming closing sale, we have two tips that'll see you through.

Beware Bad Deals

Whether a single store is closing or the whole chain is shutting down, the goal of a liquidation sale is to get the most possible cash out of a store's remaining inventory. To do that, stores typically start by marking prices up to full MSRP — even if items were sold at lower prices before. That may leave clearance prices higher than the previous prices.

This tactic counts on shoppers being lured in by the promise of bargains, but remember: price tags can be deceiving.

For the best buys, head straight to last season's clothes or holiday items.

Expect discounts to be modest early on in a closing sale, in the 10% to 20% range; deals only get as high as 90% off in a sale's final days. Popular items could get low or no discounts, while off-season items usually get heavier cuts. For the best buys, head straight to last season's clothes or holiday items.

Just remember this: That sign reading 10% off could mean items are 10% off a higher-than-usual price. Before you buy anything, do a quick cost comparison on your smartphone (might we recommend the DealNews app?).

With discounts typically getting bigger as these sales go on, you may be tempted to wait until the last day to grab the biggest bargain. Be aware that any stock will be picked over by then. If there's something in particular you want, you'll have to balance the lower price you could get by waiting with the risk that it may be sold out. Even on the last day, don't throw caution to the wind: we've seen cases where prices actually increase as the sales went on.

Ask About the Return Policy

Not only are good deals hard to find during liquidation sales, but the products there could potentially be damaged or defective. Because items are often sold as is, you may not be able to return them. Thus, before you buy, ask about the return policy and give any potential purchase a thorough once-over. If you suspect something might be wrong with an item, leave it on the shelf.

SEE ALSO: 50 Retailers That Let You Buy Online and Return In-Store

Also note that a manufacturer's warranty may no longer apply. To help protect your purchase, buy it with a credit card. Most cards offer some kind of purchase protection, but check which of yours has the best purchase protection deal before you step into the store. That way, even if the retailer doesn't take returns and the warranty is no good, your credit card company may still be able to help you.

Readers, what tips do you have for saving at store closing sales? Share them in the comments below!

Elizabeth Harper
Contributing Writer

Originally working in IT, Elizabeth now writes on tech, gaming, and general consumer issues. Her articles have appeared in USA Today, Time, AOL, PriceGrabber, and more. She has been one of DealNews' most regular contributors since 2013, researching everything from vacuums to renters insurance to help consumers.
DealNews may be compensated by companies mentioned in this article. Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).


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1 comment
Nicely written article. I definitely agree and avoid "store closing" sales. As you said, the prices are usually lousy, and you are guaranteed to not be able to return the item.