With the holiday season nearly here, bargain hunters may be turning their attention to retailers promising the best markdowns.
While e-commerce is firmly entrenched, one old-fashioned route to perceived bargains remains popular — the outlet mall. If you like name-brand merchandise, you’ve probably found yourself at a nearby outlet complex hoping to score designer pieces at steep discounts.
Whether you’re shopping for mid-tier labels like Gap and Banana Republic or the pricier houses such as Coach and Burberry — outlet centers appear to be ideal spots to indulge without paying full price.
But are you genuinely getting massive savings at outlet stores? Sadly, the answer is often no.
Here’s the reality about outlet stores they’d rather you didn’t know.
Do Outlet Stores Deliver High Quality at Low Cost?
One incentive to buy from luxury brands (even at a dramatically reduced price) is their reputation for durability. Sure, part of the inflated price reflects the brand, but much of it is also due to superior materials and construction.
If you don’t mind that the Coach bag you purchased at an outlet is “a season behind,” you might expect it to hold up for several seasons and still look great, unlike trendy finds from big-box stores that may wear out in under a year.
Right?
Not always.
Many shoppers assume outlet locations are stocked with surplus inventory, end-of-season goods, or minor factory seconds (think: a tiny stitching flaw). In other words, the same items you’d find in full-price shops.
But in reality, a lot of outlet merchandise is discounted because its construction and materials are cheaper than the brand’s mainline offerings.
Welcome to an inconvenient truth: products made specifically for outlets.
As the Federal Trade Commission (FTC) notes on its Consumer Information blog:
“Many stores sell products at their outlets made exclusively for those outlets. These items may be of lower quality than what’s sold in the regular stores. For example, a jacket might not be fully lined, the stripes on a shirt may not match up at the seams, a t-shirt may be made of a lighter-weight fabric, and shoes might be made with synthetic materials rather than real leather. If top quality is important, you may want to shop elsewhere. But if it’s the brand, style, or look that’s key, you may be in the right place.”
This reality was so little acknowledged that four members of Congress asked the FTC in 2014 to probe what they called the “potentially misleading marketing practices” of outlet retailers.
And when outlet shopping was surging in popularity in 2017, Forbes pointed out that outlet malls often don’t provide genuine bargains because much of the inventory is specifically manufactured for those venues.
In short, luxury labels are effectively producing lower-cost versions of their own products and selling them to you — sometimes without your knowledge. When you buy a bootleg from a street vendor, at least you know it’s not authentic.
The Appeal of the Outlet Mall Experience
So perhaps the craftsmanship of outlet items doesn’t match what you’d find in a flagship store — yet many outlet operators emphasize the shopping experience as much as the logo on the tag.
That means you can still wear something bearing a brand you usually can’t afford and enjoy a lively outlet environment.
Retail Leader reports that outlet centers are outpacing traditional malls in terms of scale and assortment, and some outlet retailers are creating immersive shopping experiences designed to keep visitors engaged and spending.
We spoke with Richard Laermer, a PR expert and author of several books on marketing and bargain hunting, including “Trendspotting.”
“What does an outlet provide in a good way? Well, probably a good time,” he said. “It’s a great way to spend an afternoon, hanging with friends and buying cheap goods.”
But Am I Still Scoring a Discount at Outlets…Really?
Okay, so you may be buying items of potentially lower quality that might not even be produced alongside the brand’s full-price line. But surely you’re still getting the rush of a big discount, right?
Maybe.
Some outlet brands, like Dooney & Bourke, maintain a reputation for legitimate brand quality. We spoke with Catherine Koziol, a seasoned shopper who previously worked at a premium outlet mall in South Florida.
“Although prices may not be that much better, in terms of the bags, they appear to be the same as the ones on the regular website,” Koziol observed.
Her experience is that occasionally outlets receive “retail transfers” — identical brand merchandise of the same quality that was moved from regular stores and offered at a reduced price.
“But most of the stuff is ‘made for outlet,’ which means cheaper quality,” Koziol added.
Dooney & Bourke seems to be an exception, according to Laermer.
“As for Dooney & Bourke, this is a totally unique idea. It’s almost all online and that is really cool,” he said. “They also seem to sell more quality.”
What About Outlet Shopping Online?
If your goal is discounts rather than the relaxed, outdoor, wander-and-shop experience, why not look to online outlet stores?
Fact: Price comparison on the internet can reduce your spending. Especially when you avoid the temptation of spontaneous in-person purchases.
So if you make your outlet-mall habit digital, you’ll save on travel and still potentially uncover worthwhile deals, particularly at these 10 online outlet retailers.
- Amazon Outlet
- J. Crew Factory
- Best Buy Outlet
- 6pm
- Neiman Marcus Last Call
- REI Outlet
- Zales Outlet
- Reebok Outlet
- Nordstrom Rack
- Burkes Outlet
So Are Outlet Stores Worth Your Time?
While this information may sound a bit discouraging, there’s nothing inherently wrong with shopping at outlet malls — provided you do so with full awareness and a discerning eye.
“Most people go to outlet malls as sport,” Laermer said. “But just don’t think there’s a bargain in poor-selling old models of clothing and other goods.”
If you still enjoy the thrill of convincing your fashion-forward friends that a “luxury” item cost a fortune, go ahead. Your secret remains safe with us.
