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Toys R Us: Does ‘Everything must go!’ always signal huge bargains?

Here's what you need to know about getting your money's worth at liquidation sales.
Credit: Jack Taylor/Getty Images
Closing down signs sit outside Toys R Us on New Kent Road on February 19, 2018 in London, England.

Liquidation sales can offer great deals to shoppers hunting for a bargain, but be careful.

Toys R Us last week became the latest chain to announce that it will liquidate, selling or closing all of its U.S. stores, after it failed to successfully reorganize its operations in bankruptcy.

The chain is hoping to start everything-must-go sales at most of its U.S. stores on Thursday, and complete those sales by the end of June. The toy store's moves follow a rapid succession of other major chains over the past couple of years that decided to close their doors and sell remaining goods at rock-bottom prices.

But before shoppers dive in, there are five important points to take into account to get the most out of the bargain bonanza.

1. Don't necessarily expect great deals in the early days.

Retailers know that consumers believe they can score outstanding discounts as soon as liquidation sales begin. For that reason, sales aren't always extraordinary in the early going.

"Sometimes, at the beginning of a liquidation sale, a retailer may charge full price until inventory clears out," according to Consumer Reports.

In fact, better deals may still be had elsewhere.

"Just because a business is advertising that it is closing does not mean they are offering the lowest prices on merchandise," according to the Better Business Bureau.

2. Watch out for merchandise that's not typically sold at the store.

Retailers often hire liquidators that specialize in winding down operations. Some cart in extra merchandise from other sources to supplement liquidation sales. Unsuspecting consumers may not know the difference.

"To avoid these items, check the tags to see if they differ from the retailer’s usual tags," the California Society of CPAs advised. "If they do, consider carefully the quality and value of what you’re buying."

3. The best sales might be available at the end of the process, but don't wait too long.

Inventory dwindles rapidly toward the end of a liquidation sale. If you're concerned that the store will run out of your desired product, don't let the perfect deal be the enemy of the good discount.

"In the case of product markdowns, managers often discount heavily at the end of the liquidation process in order to achieve 100% sell-through of inventory, with the belief that leftover product is a clear sign of poor performance," according to the Harvard Business School.

4. Understand the return policy.

There's a good chance you won't be allowed to return a product from a liquidation sale after a purchase. Make sure you understand your options before proceeding with a purchase.

For example, one retailer that recently liquidated, HHGregg, limited returns on items purchased during the liquidation to seven days and only on items "having a latent defect" that couldn't be "reasonably" identified by the buyer, according to a court filing.

5. Use gift cards.

Retailers often ask and receive a federal judge's permission to honor gift cards during liquidation sales.

But after the company is gone, your gift card is almost certainly useless. In the bankruptcy of bookstore chain Borders, for example, many people who failed to use their gift cards while the company liquidated were stuck with useless plastic after it was over.

Toys R Us said last week that it planned to honor its gift cards for the next 30 days.

"Use those gift cards ASAP," the Better Business Bureau said. "Businesses that have entered into the liquidation process will not be around for very long and BBB advises consumers who are holding gift cards spend them as soon as possible or risk getting stuck with a worthless piece of plastic."

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

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