5 Secrets to Outlet Shopping

Special thanks to Escada and Le Crueset for making this video possible.

Outlet malls create an adrenaline rush. You've got all your favorite stores in one place at big discounts. But don't be fooled! This $25 billion-a-year industry is masterful at getting you to part with your money. Here are five secrets to outlet shopping, all to help you be a smarter shopper once you get there.

Some Retailers Create Merchandise Exclusively for Outlets

First, factory outlet stores started as a way for brands to sell irregular items or products left over from retail stores. Today, many companies create clothing lines specifically for outlet customers at cheaper price points. Brands such as Gap, Coach, Brooks Brothers, Ralph Lauren and J. Crew design clothing exclusively for the outlets and of a different quality.

Also See: Sales You Should Ignore

Items sold in outlets are still of decent quality except for a few minor details, says Tod Marks, senior projects editor for Consumer Reports. "Maybe a manufacturer used plastic instead of leather buttons. Perhaps there's not as much reinforced stitching along the sleeves or certain seams," says Marks. "These are little things that may mean something to you or I, psychologically, but not in terms of how well the goods are made."

Tags will sometimes have special markings or say "factory outlet." And in-season merchandise is typically from an outlet-only line. But if you're unsure of a product's origin, just ask an employee. According to Marks, outlet workers tend to be well versed in their store's inventory and can help explain the differences between items.

Also See: Turn Your Shopping Addiction into Cash

Price Tags Can Be Misleading

Next, don't be misled by price comparisons found on tags. Since some brands produce merchandise exclusively for outlet stores, you can't always trust the difference between the so-called "retail" price and the outlet price on the tag. Better to just focus on the look, feel and fit of the item to figure out whether it's worth it or not.

High-End Brands Offer Best Deals

Now for the greatest steals on the same merchandise found at retail stores, your best bet is to go to upscale. At high-end outlets like Gucci and Prada, for example, you'll find identical pieces from their retail counterparts, just a season or two behind.

Also See: Designer Trends at Knock-Off Prices

"Outlet shoppers are very savvy shoppers because they know the brand," says Marks. "They may be aspirational shoppers, someone who aspires to buy a particular brand maybe because of the status it coveys in their mind, but maybe they can't afford the latest, greatest, top-of-the-line stuff sold in regular retail."

Check Inventory at Favorite Outlets Ahead of Time

Another insider tip? Call your favorite outlet stores before making the trek to see if they have what you need or if they have any last-minute specials. For instance, we heard about one furniture outlet store that, without notice, received a truckload of overstock dining room tables from its main showroom -- and promptly sold them to lucky customers for more than 80% off.

Also See: When it Pays to Spend More

Outlets May Offer Fewer Services

Finally, keep in mind that outlet stores sometimes offer fewer services than regular retailers. For example, if you buy bulky items such as bed frames or tables, be prepared to arrange your own delivery. Also, since outlets generally operate independently, you probably won't be able to return something bought at an outlet to its retailer in the mall. Return policies are sometimes stricter at outlets, too. Make sure you understand the terms prior to making a purchase. Coupons or gift cards from your favorite retailer likely can't be redeemed here, either. But several large outlet mall chains offer exclusive coupons and bonus savings through shopper clubs. For example, at Woodbury Commons, free membership to their VIP Shopper Club gets you a coupon book on every visit and additional deals.

And, as always, we want to hear from you. What's the best outlet deal you ever purchased? Connect with me on Twitter @Farnoosh and use the hashtag #finfit

Financially Fit Feedback:Take our Survey »

Follow Shine


What extra baking essentials do you purchase?

Poll Choice Options


  • Bad financial habits to ditch in 2013
    Bad financial habits to ditch in 2013

    Don’t let these bad financial habits keep you from your long-term spending goals. Identify your weaknesses and start remedying them. …