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Outlet shopping may be too good to be true

February 8, 2017

Is outlet shopping leaving consumers with less than what they bargained for? After a recent stroll through the Kate Spade outlet in Albertville, Minnesota, it seems as though that is indeed what is happening.

In the spirit of full disclosure, a recent friend’s designer handbag, one that was received as a new Christmas gift, left me with green eyes. I have had much recent retail experience with this brand, buying multiple products in the last six months, so I couldn’t be too full of envy as the bag did look a bit outdated. Further internet inspection led me to question the value of the newly-acquired bag as I discovered the gift was likely purchased at an outlet.

Outlet shopping has never drawn me in much, although I do admit the Lululemon Outlet, also located in Albertville, is quite a delight! In an effort to gain a better understanding of my lack of interest, I asked my mother why she was never very interested in outlet opportunities, as a great majority of my friends’ parents happen to be.

My mom likes a good bargain. She’s quite the thrift store, garage sale junkie, the complete opposite of me, but she’ll spend money at full-price retail stores occasionally. There even was a Christmas when, being the unconventional suburban housewife that she is, she worked as a seasonal retail employee simply to receive the employee discount.

Her response to avoiding outlets was, “I didn’t want to be pegged as a sucker!” She wasn’t a fan of how, traditionally, outlet stores sold seconds. She seemed not to be interested in paying more than she would like for what she deemed didn’t work initially.

In recent years, however, seconds are unlikely to be found in the busy outlet malls, as I recently noticed when I popped into the Kate Spade outlet. I was looking for two specific bags that I had found and fell in love with online, yet I failed to check the in-store availability. I assumed that, because they were both final sale items, they would rightfully be placed in the outlet.

I got a clear answer as to why the bags were nowhere to be found after an in-depth internet search. What initially looked like it was an outdated gift turned into the discovery that companies are currently making products specifically for the outlets, at a much lesser quality, with very little significant dips in the price point. The problem with this is the customers are likely being duped.

Outlet shoppers are willing to travel farther and wait longer for discounted goods according to Donald Ngwe of Harvard’s Business School. However, they are shopping under the false pretense that they are paying less for the same quality of product they would have purchased in a traditional store.

Most outlet shoppers are not aware of the falsity in the products they are buying. Outlets and discount stores (think T.J. Maxx) offer a MSRP price that can sometimes be completely false, as Melissa Mancini of CBC Marketplace discovered in her early January 2016 report on the network.

In Mancini’s research, she interviewed Mark Ellwood, an expert on bargain shopping in New York City, who offered the advice “to think, this stuff was made to be cheaper” when entering an outlet mall, in order to better prepare such bargain shoppers.

Now, do not get me wrong, avoiding outlets may come across as a bit snobby. But when consumers begin to recognize the price they’re paying may not be discounted at all, taking into consideration the quality of the product, they may think twice before a purchase.

In another effort of full disclosure, my first bag was a Kate Spade outlet find, but that’s a secret only shared between you and I. I prefer the Lululemon outlet because their products are direct from retail. The price, however, is only about a $15 discount, which is still worth it!

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