The Sacramento Bee - Editorial: Feds should look into how outlet malls operate

February 3, 2014
In The News

By the Editorial Board

Shoppers flock to outlet malls in search of bargains on brand-name clothing and other merchandise. But how great are the deals, really?

It’s well worth finding out, to make sure consumers aren’t being snookered.

Responding to a Sacramento Bee report, four members of Congress are urging the Federal Trade Commission to investigate whether outlet stores across America are intentionally promoting lesser-quality goods as items that were once on the racks of full-price retailers.

“It’s unfairly taking money from the purses and pockets of middle-class Americans,” said Sen. Richard Blumenthal of Connecticut, who signed the letter along with three other Democrats – Sens. Sheldon Whitehouse of Rhode Island andEd Markey of Massachusetts, and Rep. Anna Eshoo of Atherton.

As The Bee’s Richard Chang reported in December, outlet malls have become big business for well-known and upscale retailers, which often make separate product lines for their outlet stores. There are more than 300 outlet malls across the country, including ones in Folsom and Vacaville owned by Premium Outlets, the biggest player in the industry.

Outlet mall owners say that they are responding to public appetite for brand-name goods at deep discounts, and that it shouldn’t surprise shoppers that many items aren’t exactly the same as in full-price stores.

But it isn’t always clear that the shirt or sweater for 50 or 75 percent off at a factory store is not as well made as the version in a regular store. The FTC should take this case to determine whether that rises to the level of “deceptive pricing.”

Yes, it’s buyer beware, but shoppers should not be unfairly misled.

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