Weekend Recap – How good are “Liquidation Deals”?

So, you’re thinking about buying that new camcorder, television, Blu-Ray player or computer? And let me guess – you’re planning to go hit your local Circuit City to grab a “deal” on their going out of business sale?

Hang on a second there partner. Don’t run to your nearest Circuit City with a rolled up wad of hundreds or a recently paid off credit card. There’s a slight problem. Circuit City – like any retailer on its way out – needs to recover as much money as possible. So those “deals” might actually turn out to cost more than they did a couple weeks ago.

Consider this example. Last weekend, when the liquidation started with 10% off everything in the store (except Verizon Wireless products – they’re not going away anytime soon), I hopped in a car with my roommate to go look at a new big screen TV for the living room. Something shiny. Something LCD. Something 50” or more.

What we found was a 52” Samsung LCD television – not too gigantic by comparison, considering there’s a 200” projector in the media room – not too pricey either. A great deal by any standards – it was on sale at $1749, and the nice girl at the register wasn’t good enough at math to understand that she was only supposed to give us 10% off or the sale price, not 10% off of the sale price. So for $1575, there’s now a great new television in the house.

Flash-forward to this weekend. Back to the same Circuit City to peruse deals on computers, I happened to go over and look at exactly the same television. You know what? The price had gone up. When we first looked at it, it had a sticker reading “Original Price: $1999. Sale Price: $1749”. This past weekend, the sticker now read “Original Price: $2299. Sale Price: $1999”.

Now admittedly, CC has upped their discounts from 10% off to 30% off, so the final price ends up just about the same as it was two weeks ago. But that doesn’t excuse the fact that either Circuit City employees are so phenomenally bad at math that they can’t grasp the concept of prices going down in a liquidation sale (entirely possible – way to hire the best and brightest Circuit City!), or else the company is trying to recoup as much of their losses as possible, so they’re raising prices as they raise discounts as well to compensate.

Aside from the price switching, the other major problem with liquidations is warranties. We picked up a small component table this past weekend at the 30% off price to hold a surround sound system and cable box below the television itself. On the way out of the store, I asked one of the “cream of the crop” employees still working at this particular store about returns and warranties. Theory being – since I can’t inspect the product (there are “DO NOT OPEN PACKAGES” signs all over the store), how could we be sure that we’re not getting something that’s broken. And if so, since there are no returns, what recourse do we have.

The answer I got? Basically – you’re SOL. Supposedly GE and other companies are buying up the extended warranty coverages, but for products like furniture with no warranty on them, there is no recourse.

Sure enough, after getting home and opening the package, two of the pieces were broken. Both are easily replaced at Home Depot, and for about $5, but we were lucky.

With employees who no longer care about their jobs, and customers who are trampling over products on the floor to find the next great deal, liquidation sales often lead to purchases of damaged goods. And if you’re unlucky enough to buy something major with a flaw (like, say, a television with a bad bulb or a scratched screen), you’re on your own to replace it.

Add the repair costs to the “Deals” that aren’t really deals, and you’re more likely to be left with a headache than a happy ending.