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Outlet malls have exploded in popularity in recent years, becoming one of the fastest-growing segments of American retail. For many shoppers, this siren song of bargains and high-quality designer merchandise at a low price is too irresistible to avoid, and they simply must stop to shop. But beneath all the fancy sparkle and fresh spackle of the countless outlets popping up all over the country, do they really deliver all they promise? It turns out that outlets have a few sneaky ways of tricking us into thinking we're getting a much better deal than we actually are.
The Merchandise Isn't What You Think
The original outlet and factory stores sold overstocked, discontinued items, and imperfect merchandise unfit for retail sale; that's what made the prices so cheap. But nowadays, the majority of common outlet stores supplement their stock with merchandise created especially for outlet-store sale. These lines carry the brand name, but they're made with lower-quality fabrics and cheaper construction techniques. The companies depend on customers' inability to tell the difference between the quality of real designer merchandise and the lower-quality knockoffs carrying the same label. The knockoffs may be cheap, but that cheapness comes at the expense of quality.
It's All About the Marketing
Merchandise at outlet stores usually comes with a price tag that prominently displays both the retail and the outlet price: "Manufacturer's Suggested Retail Price $100, Our Price $25." The tags lead customers to believe that they're getting a huge discount. But the truth is that the listed MSRP is whatever the store wants it to be-there's no guarantee that the item is really worth that much, or that it was ever listed for that price at a retail store. This trick, called "reference pricing," is widely used to assuage shoppers' anxieties and loosen their purse strings by convincing them that they're saving more money than they've spent.
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