Are Outlet Mall Bargains Really Bargains? What Shoppers Should Know Before They Buy

Summer road trips, family vacations and back-to-school shopping often come with a stop at the outlet mall. But shoppers may not always be getting the deal they think they are.

Nonprofit Consumers’ Checkbook recently launched an undercover investigation into outlet stores across the country, looking at prices, labels, merchandise quality and store practices. The investigation found that many popular outlet stores sell items made specifically for outlet locations, while others offer a mix of outlet-only goods, regular-store clearance items and genuine markdowns.

Jennifer Barger, a former Washington Post fashion editor who led the investigation for Consumers’ Checkbook, said the group wanted to better understand what shoppers are actually buying at outlet malls.

“I think a lot of us are outlet shoppers,” Barger said. “And I think that a lot of people just don’t really know what they’re carrying.”

Barger said the team visited 40 outlet stores and found that about half were carrying only goods manufactured specifically for outlet locations. She said that was especially common among some mid-level mall brands, including J.Crew, Gap and Banana Republic.

The idea of an outlet store once meant shoppers were buying overstock, past-season merchandise or goods from a factory store. But Barger said the demand for deals has changed the outlet mall business model. Some brands now produce separate lines just for their outlet or factory stores.

That does not mean every outlet purchase is a bad deal, Barger said, but shoppers should know what they are looking at before they buy.

One tip: look closely at the tags. Barger said shoppers should be cautious with labels that say “compare at” or list an MSRP, especially at department store outlets. Those labels may signal that the item was never actually sold on the floor of the regular department store.

She also recommends comparing prices before making the trip. For example, if a shopper is looking for a specific pair of sneakers, they should check prices at other retailers or online first. Sometimes, Barger said, the outlet price is not much better than what shoppers could find elsewhere.

There are still places where shoppers can find real savings. Barger said clearance centers, including those operated by Chico’s and Talbots, are more likely to carry merchandise from regular stores. Home decor outlets, such as Pottery Barn and RH, may also offer genuine markdowns on past-season items, returns, floor models or slightly damaged goods.

Higher-end designer outlets may also be more likely to carry merchandise that originally came from regular retail stores. Barger said her team found examples at brands such as Burberry, Prada and Lafayette 148.

Still, she said shoppers should pay attention to quality. That means checking materials, stitching, construction and whether the product feels comparable to what the brand sells in its regular stores.

For families shopping during summer travel or preparing for back-to-school season, Barger said the key is to be informed.

“Look for natural fibers, look for good stitching, and look for just things that you like,” she said. “It doesn’t mean that everything you buy at the outlet mall is terrible, but you really just want to know what you’re getting.”

Consumers can learn more about the investigation and shopping tips from Consumers’ Checkbook.