Outlet malls may sound like a shopper's delight and you may be able to find deep discounts on coveted brands, but not all deals are equal and some aren't deals at all.
"The fact that it's at an outlet doesn't necessarily mean that the merchandise is cheap," said Max Levitte, co-founder and chief executive of Cheapism, an online site that helps consumers find the best buys on products and services.
To be sure, there is plenty of cut-rate merchandise at the outlet malls, whose typical lineup of retailers could include Gap, Coach, Calvin Klein, Columbia Sports, Le Creuset, Calphalon, Samsonite and, increasingly, relative outlet-newcomers like Kate Spade, Restoration Hardware and L'Occitane.
Much of it might be last year's fashions and unsold merchandise that can't find a buyer no matter how many markdowns there are because of odd colors or sizes. But there is a growing trend to stock outlet centers with branded goods that were made less expensively and exclusively for the outlets.
"In some cases, the manufacturers do take shortcuts. They may replace leather with plastic or not have extra stitching," said Tod Marks, a senior project editor with Consumer Reports who recently finished his second exhaustive comparison of purchases at outlet malls versus regular retail stores for the magazine. "Most of the time, those tweaks don't compromise quality."
In Marks' research, he said it was tough to find seconds and leftovers at most outlet retailers, with the exception of Le Creuset, which offered discounts of 35% or more on cookware with small chips. He said that clerks at several shoe stores, most notably Adidas and Nike, said the outlet malls "no longer sell B-grade stock," but make shoes specifically for the outlets.
"For the most part, you're not really sacrificing much and the savings may be well worth it," he said. He called the quality differences "little things that really aren't going to be deal breakers unless you're the most absolutely finicky person."
Gap and Banana Republic stores are quite open about the difference in merchandise between the regular retail centers and outlet malls. "Virtually everything you see in those stores never saw the light of day in a regular retail stores," Marks said.
Though they carry the Gap brand name, the T-shirts tend to have less stitching and a lighter fabric. Jeans might be plainer and could be missing a seam; sweaters may be shorter with cheaper buttons.
The apparel even has a three-diamond icon stitched into the fabric to designate its outlet destination.
Some retailers, such as Under Armour and Coach, carry a mix of unsold products from regular stores and product made specifically for the outlets, according to the Consumer Reports study.
Among its other findings: Lands' End carries year-old inventory, clearance items and returns. Sunglass Hut also offers both regular and outlet merchandise, though the prices are not necessarily lower than at regular stores.
Harry & David sells a lot of the same things at the outlet stores that you'll find in the catalog or online, though the promotions may differ. And Dress Barn sells exactly the same merchandise but at different price points.
Though retailers often advertise that their outlet prices are as much as 65% off the manufacturers' suggested retail price, that's certainly not the case on every product.
More from MarketWatch:
Consumer Reports found savings of 15% to 61% on an assortment of goods, while Cheapism's comparison-shopping trips yielded saving of 30% on average, Levitte said. Value Retail News, a trade magazine, reports that the average savings at outlets are about 38%.
Moreover, the discounts are based on the manufacturer's suggested retail price, which is rarely what people pay. And though Banana Republic's suggested price for a T-shirt will be the same for outlets and regular retail stores, it's not an apples-to-apples comparison, Levitte said.
"That retail price is irrelevant in many cases, because those items were not available at retail and were always meant for outlet stores," he said.
"Sometimes products are the exact same price and the exact same product in both mall and outlet stores," Cheapism's Levitte found. His best example: a Kate Spade iPhone case.
"One of the brands told us that they see outlets as just another place to display their merchandise," Levitte said. "They don't think of it as a cheaper place but as another venue."
Given that, he encourages consumers to shop department store sales and coupons before heading to an outlet mall for things like jeans, shoes and leather goods. Do twice-yearly outlet shopping for socks, underwear, T-shirts and other clothing necessities.
"The selection is much bigger at retailer malls, and many retail stores will give you a better value" when sales and discounts are factored in, Levitte said.
He points to Samsonite suitcases, which are often better quality at Macy's retail stores than at outlet malls, making them a better value at Macy's if they're on sale.
Still, there are tricks to making your outlet shopping a positive, money-saving experience, according to Consumer Reports:
- Be strategic about your shopping. Go to the outlet's website to map store locations so you can park and shop without walking for miles.
- Contact the mall's management office and ask about any sales beyond the ones found online or in circulars. Some malls also offer deals for seniors and members of the military.
- Get price breaks through exclusive promotions and rewards programs. Premium Outlets offers a free VIP Shopper Club registration and the Tanger Outlets Club has one for $10. You can also sign up for email alerts and become a fan on Facebook for bigger savings.
- The early bird gets the best deals. By shopping early in the day, you avoid the crowds, and the merchandise is at its freshest for the day. Avoid noon to 3 p.m., when crowds are at their peak.
- Shop on Tuesdays, Wednesdays or Thursdays, and stay away during the holidays.
- Shop for summer things in the winter and winter things in the summer. Off-season goods typically come at bargain-basement prices.
- Remember that what you buy may not be returnable. Many regular retailers won't take returns from outlets.
- If you're unsure about the mix of products at your favorite outlet mall, just ask. The clerks who spoke to both Consumer Reports and Cheapism were very candid, the two said.
More from MarketWatch:
