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Liquidation sales: buyer beware
'Going out of business' sales are a big business but they may not be where you can get the best bargains.
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NEW YORK (CNNMoney.com) -- Everything must go! Going out of business sale! Those headlines are becoming a lot more common these days. But are liquidation sales really all they're cracked up to be? Here are the details.
1. Know the process
Typically when a large retailer goes out of business, like we've seen with Linens n' Things and Circuit City, a liquidator comes in and buys the excess merchandise. They may put their own staff in place. They hang the big signs and do the advertising. And they're trying to get as much money as they can from the sales.
A going out of sale business is big business says Anthony Giorgianni of Consumer Reports. These liquidation sales generally last a few months.
2. Buyer beware
Usually you're not getting as good a deal as you think.
First of all, you may find better prices online or at other retailers. Keep in mind that liquidators can raise prices that the original retailer already set. They can also get rid of any of any previously scheduled sales.
In fact, since ads that scream "going out of business" just attract consumers who assume they're getting a good deal, there is little incentive to actually give those big discounts says Giorgianni.
At first a liquidation sale may only give you 10% off. But the longer you wait, the more attractive prices get. Plus, when you buy an item from a liquidation sale, there's typically a "No Refund" policy. And that can be a big minus if you're buying electronics or a big ticket item.
3. Do your homework
If you are heading to a liquidation sale, make sure you comparison shop. Or, check with another merchant and ask how close they can come to matching the liquidation price. You'll get the advantage of having somewhere to return the item says Giorgianni.
If you do decide to buy something from a liquidation sale, check in with the manufacturer to see if the warranty will be honored. Before you purchase anything, make sure you have all the accessories and the instruction booklet. Always buy your stuff on a credit card.
And remember that in a liquidation sale, it may not be that retailer's exclusive merchandise. Left-over merchandise from similar store liquidation sales may be on display as well. So if you're at a high end furniture liquidation sale there could be furniture there that's from a lower-end store. 
