State of New Mexico
Office of the Attorney General
Gary K. King
Tuesday, October 28, 2008
Contact: Phil Sisneros 505-827-6792 Lynn Southard 505-222-9048
AG: Going Out of Business Sales Not Always a Bargain
(ALBUQUERQUE)---Attorney General Gary King's Office today issued a warning to
New Mexico consumers who shop "Going Out of Business" sales...compare prices
before you buy and do your homework first.
In the past year, many large, nationwide businesses have filed for bankruptcy protection.
Several have been large chain stores that are closing their doors and are advertising
merchandise at seemingly huge discount prices during what they call Going-Out-of-Business
(GOB) sales. At present, Linens ‘n Things and Mervyn’s are conducting GOB sales in New
Mexico. Others may follow.
GOB sales are intended to sell as much of a store’s inventory as quickly as possible, to
maximize value for its owners and creditors. Customers are drawn to GOB sales with the
idea that they are buying at bargain prices. This idea can be abused. Sellers may increase
prices before advertising mark-downs, or bring in new inventory purchased elsewhere at
rock-bottom bulk prices, which they then try to sell at closer to normal retail. The New
Mexico Distress Sales Act forbids this sort of consumer manipulation and exploitation.
However, the Distress Sales Act does not apply to sales conducted under the supervision of
a bankruptcy court. For example, a bankruptcy court in Delaware, supervising the
liquidation of a 600-store retail chain, may not be aware that an unscrupulous GOB
specialist is trying to increase sales proceeds in New Mexico by changing list prices or
bringing in cheaply acquired merchandise.
New Mexico consumers should take time to compare the quality and prices at GOB sales to
those at other stores before they buy. Don’t assume that a half-price sale is a great deal.
There are other concerns. GOB sales are usually final. Buyer’s remorse in not an option.
Once you’re past the cash register, you can’t return the purchase if you find a better price
elsewhere. Keep in mind that the store is soon going to be out of business, and there won’t
be any place to return defective items. Know what you’re looking for before you go to a
GOB sale. Know its normal price range. Decide if you’re getting a bargain on the basis of
your own knowledge, not what the sign says. Be sure that the advertised bargain is really a
There can be bargains at GOB sales, but New Mexicans should be alert to the possibility that
what a store sign says is a slashed price might not be a better deal than they can get at
another store down the street.