Why Factory Outlets Aren’t As Good As You Think

Excess designer clothes from last season at a good price – that’s what you find in outlet clothing stores, right? Wrong. The little-known truth about outlet stores is that most of their merchandise was actually designed to be sold only at outlets:

Reports for Racked, Chavie Lieber spoke to some shoppers who weren’t worried that factory outlet clothes were substandard because they cared more about design and brand. But as Lieber noted:

The formula employed by these outlets – designers watering down their original concepts with inferior materials and production methods to get a lower price – wouldn’t seem so underhanded if shoppers knew what they were buying.

The thing is, most casual shoppers probably don’t know that outlet stores sell clothes that never sold in high-end retail stores. And that’s exactly what the brands wanted.

A class action lawsuit filed against Kate Spade & Co. recently shed light on the tactics used by fashion brands to fuel widespread confusion about the origin of clothing.

the complaint accuses Kate Spade of advertising false discounts at its outlet stores, tricking complainants into purchasing items they claim were significantly reduced from the original price:

[T]These purported starting “our price” prices and corresponding price reductions and savings were false and misleading, because the prevailing retail price for the handbag during the three months immediately preceding Plaintiff’s purchase of this item n was no higher than $142.00 and not the original $355.00. our prize’ represented by Kate Spade. Plaintiff would not have purchased the handbag but for Kate Spade’s misrepresentations.

Michael Kors installed a similar lawsuit last year, and TJ Maxx is also facing legal action after it became clear that the store staff were simply guessing what the items were worth at full retail price and marking off the discount from that estimate.

Watch the video above to learn more about ethically obscure tactics to watch out for when shopping.