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Liquidation Sales Don't Always Mean Best Bargains

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Nov 27, 2008 10:15 am US/Mountain

Liquidation Sales Don't Always Mean Best Bargains

CBS4 Crew Goes Under Cover

Reporting
Jodi Brooks
DENVER (CBS4) ― You've probably seen them around town -- retailers closing down and holding liquidation sales. But those sales might not save you money after all.

Just because the sign says the  "store is closing" or "going out of business" it doesn't necessary mean there's a bargain. That's what CBS4 found while shopping with a hidden camera.

Linens-n-Things sold itself in bankruptcy court and is now run by liquidators. CBS4 found that what's interesting there is that a lot of items have two price tags. One price sometimes is blacked out next to another price.

Often, the current price in the liquidation sale is more expensive than the price before the store went bankrupt.

"When we were Linens-n-Things we had all those clearance sales. Then liquidators took over. They put everything back at regular price which means there is no clearance. So we had to go through and cross (the clearance sale price tags) all off," one store clerk told CBS4's undercover crew.

The liquidation company based in Chicago told CBS4 they didn't change the prices. They say the retailer likely did before the liquidator became involved.

About 20 percent of Circuit City stores are closing, while the rest remain in business. One might think the liquidating Circuit City would have better bargains. Inside, with CBS4's hidden camera one employee at the liquidating store had a warning.

"Some of these things you can probably get cheaper."

"So shop around, is that what you're saying?" CBS4's Jodi Brooks asked.

"Yup," he said.

CBS4 compared TVs at the liquidating store and a Circuit City that remains in business. One TV at the liquidating store was priced at $2,079. The same TV at the regular Circuit City was selling for about $100 less.

Here's what an employee at the liquidated Circuit City told CBS4.

"That computer there is $300 more expensive than the one over at the other circuit city."

"Why do they do that?" Brooks asked.

"Because they think they can make money that way, which they can because people come in and they see all these signs, and they're like 'Oh! deal.' So I don't sell anymore. I tell people the truth."

Some things were cheaper at the liquidated Circuit City. But on Thursday in the newspaper, you might see that Circuit City is having a sale Friday and Saturday. Those deals are not honored at the Circuit City stores going out of business.

The liquidated Circuit City and the other Circuit City locations are essentially competitors now. They're operated by two different entities.

The liquidators are not the owners of these stores. They say they are agents appointed by the bankruptcy court. They say their job is to manage the discounts of the merchandise in the stores.

(© MMIX CBS Television Stations, Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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