Buyer beware at liquidation sales

Hester said his company told customers of the merchandise mix. "When you walk in, there are signs that show what is original Oskar Huber inventory and what is being supplemented," he said. "And there is a different sales tag on each thing. We don't want anyone to be misled."

Pricing is another way liquidators make money for a company either in bankruptcy or just closing down after a good run.

Giorgianni visited a Manhattan Circuit City store on the Sunday after the company went into bankruptcy liquidation two months ago. He held in his hand a Sunday circular that had been stuffed into newspapers before the company announced it was going out of business. The circular would have gone into effect that Sunday, but was not being honored.

The store, packed with shoppers, was filled with sale prices above what had been advertised in the pre-liquidation circular, he said.

A 50-inch Panasonic plasma TV on sale in the store that day for $1,799.99 had been scheduled to go on sale - according to the circular - for $1,499.99, he said. "I found it at another retailer [online] for $1,364.96 with free shipping," Giorgianni said.

Guitar Hero, however, proved to be a good deal.

To help consumers, Pennsylvania passed a law in 1937 that was amended in 1963 requiring, among other things, that a business apply for a license from the local municipality where such a liquidation sale will be held.

The goal, according to the statute, is to prevent such sales from misleading and defrauding the public.

In the Oskar Huber case, the law is irrelevant because a bankruptcy judge approved the company's request to waive it.

State officials have received few consumer complaints about liquidation sales in recent years, but they urge shoppers to do their homework, said Nils Frederiksen, spokesman for the Pennsylvania Attorney General's Office.

"You may be better off going down the street," Frederiksen said, "or you may end up with a fantastic deal."

Lowdown on Liquidation Sales

Deal Hunting

Comparison shop. From the store, call and have a friend search online for what you see on the shelf.

Leave the store and do research. Don't buy on impulse.

Prices in the first weeks may be higher than at competing stores.

Discounts improve toward the end, but at the expense of selection.

Dangers of "As-is"

Check over a product thoroughly before buying. Are there scratches? Dents?

Plug it in. Does it work?

Open the box. Are all accessories there?

Warranty alert

Consider buying the same product somewhere else if the prices are competitive. It could get you a warranty.

Use a credit card. That might help if the product is defective when you get it home.

SOURCE: Consumer Reports Money Advisor associate finance editor Anthony Giorgianni

Contact staff writer Maria Panaritis at 215-854-2431 or mpanaritis@phillynews.com.