Clearance sales are held during different times of the year when retailers try to do several things: Sell any overstock still taking up too much shelf space, sell items that are soon to be on the clearance list, turnaround gift returns/exchanges (both opened and unopened), sell through old display models, and sell old products that have been to service.
This is where the consumer can get a good deal, depending on how desperate the store is to clear out shelf space. Overstock items are usually those loss leaders, such as those $29 DVD players, $79 Blu-ray Disc players, $299 LCD Televisions, and $249 budget home theater packages that are still new and in sealed boxes. Here you know that they haven't been opened, returned, or used.
These may not always be the best known name-brand models, but can be a good value, as long as they are available. These items are usually the first to go, especially in an after-Christmas sale, so get to the store early the day after Christmas for the best chance of grabbing one of these products.
This is my favorite bargain-sale category, especially in the January and Spring timeframe. Here is the "scoop". Every January, the CES (Consumer Electronics Show) is held in Las Vegas in which all the consumer electronics manufacturers from around the World unveil their products for the coming year.
These products start to hit shelves in February and continue into the Spring and Summer. Needless to say, buyers from the big consumer electronics retail chains to small regional and home town independents flock to this show in order to place orders for new products.
However, in order to beat the competition in placing these products on store shelves, the retailers must clear out current products targeted for replacement from their warehouses and stores as quickly as possible.
This is where the consumer can benefit. If a retailer made the "mistake" of over-estimating the demand for a particular AV receiver, for instance, and has lots of stock left by February, it will be more difficult to move the older model as its competitors, who didn't over order stock on the old model, sell the newer model when it arrives.
So, in order to "get rid" of the currently overstocked model, retailers will often place notice of a significant price drop on the older model.
However, many consumers don't react well to the word "clearance", which gives the connotation that the product may be, in some way, inferior to a newer model (that may or may not be the case in reality). Therefore, the promotion for the old model often carries an AD notice of a "Price Drop", "Instant Discount", or "Instant Rebate" or even "Special Purchase". Also, an additional indicator of a clearance item is in the fine print; check for the phrases "While Supplies Last" and/or "No Rainchecks".
If you are bargain hunting, this could end up being a great deal. The retailer gets rid of a product that will soon be discontinued and the consumer gets a great price.
If you don't need the latest and greatest, and the "clearance" product has everything you really need, this could work out well. The key is to make sure the product meets your needs by checking out the features ahead of time on either the manufacturer's or store's website, if possible.
When it comes to returns and exchanges, stores want to turn these around as quickly as possible. A great example is a $29 DVD player. You wake up on Christmas Day and find out that you got a $29 DVD player from your significant other and another $29 DVD player from your parents. Of course, politically you have to decide which one you take back, but, without opening the box you take one back and exchange it for something else. However, you are not the only one. When you arrive at the store you are in line with ten other people coming back to exchange the same DVD player.
Obviously, this presents a minor problem for the store. They don't mind you returning the DVD player and exchanging it for something else. However, the store is getting stuck with something they thought they sold permanently, and now that the item has been returned it is beginning to take up store real estate that needs to be devoted to other products that can be sold at a higher profit margin. The answer, send it back to the department that sold it and turn it around quickly at a 5% to 15% percent discount, depending on whether the product was returned open or closed.
Once again, the consumer can make out, however, there are a couple of points to be aware of. The item may have been opened by the customer or by the store returns dept to check to contents. In this case, make sure you do four things:
ONE - Check for a discounted price sticker made by the store on the box and confirm with a sales person or store manager that the open box price is indeed a discount price over the same item brand new.
TWO - Check the contents of the box yourself, together with a sales person or store manager. Make sure there is an owner's manual for the product and all accessories for the product are present.
In addition, note how the accessories are packaged. Are the cords, remote, and manual in their original packaging (which may indicate the product may not have been used), or are they obviously repackaged (which would most likely indicate the product was used for a period of time)?
Lastly, if anything is missing, negotiate for a lower price that would realistically make up the price of the missing items.
THREE - If the box has been opened, ask to see the item plugged in and working before you leave the store.
FOUR - Also, check to see if there is a date code on the open box label or price sticker. This won't tell you how old the product is, but it does tell you how long the item has been sitting on the shelf as open box item.