Understanding Outlet Store Practices

Outlet stores began as places to buy discounted high-end products, often excess or damaged goods. Today, many items are specifically manufactured for outlets, leading to misconceptions about discounts. Brands may use tactics to make consumers believe they are getting a deal, but often the products are of different quality and not part of the original collections. Ethical concerns arise from misleading pricing, as seen in legal cases like Michael Kors. Consumers should be aware of these practices and understand what they are purchasing.

What was the original purpose of outlet stores when they first started in the 1930s?

• To serve as a testing ground for new products

• To provide exclusive collections to employees

• To offer excess or damaged goods at a discount

• To sell high-end products at full price

What is a common misconception about the discounts offered at outlet stores today?

• They are always cheaper than regular stores

• They offer the same products as regular stores

• They provide steep discounts on all items

• They sell only returned or unsold items

What percentage of merchandise in outlets was estimated to be specifically manufactured for them, according to a 2014 letter to the FTC?

• 85%

• 50%

• 95%

• 70%

What was the main ethical concern regarding the pricing of outlet store items?

• Products are not available in regular stores

• Discounts are not applied at checkout

• Labels falsely suggest a higher original price

• Items are priced higher than in regular stores

What tactic do brands use to make shoppers believe they are getting a better deal at outlet stores?

• Offering free gifts with purchase

• Using third-party vendors to produce items

• Providing lifetime warranties

• Advertising exclusive collections

What change did Michael Kors agree to make after a lawsuit regarding misleading pricing?

• Lowering all prices by 50%

• Using 'Value' instead of 'MSRP' on tags

• Offering refunds to all customers

• Closing down several outlet stores

What does Neiman Marcus's vice president say about the quality of products made for outlets?

• They might use different fabrics and buttons

• They use the same materials as regular stores

• They are designed by the same team

• They are always inferior in quality

Why might consumers not be concerned about the quality of outlet products?

• They trust the brand name

• They are unaware of the differences

• They prioritize price over quality

• They are always cheaper

What should consumers be aware of when shopping at outlet stores?

• The limited return policies

• The potential lower quality of items

• The exact origin of each product

• The exclusive designs available

How can consumers identify items specifically manufactured for outlets?

• By looking for specific brand signals

• By checking the price tags

• By asking store employees

• By comparing with regular store items