Closeout (sale)

"Clearance Sale" redirects here. For the Price Is Right game, see Clearance Sale (The Price Is Right).
Liquidation sale at Circuit City in Raleigh, North Carolina in February, 2009
Woolworths in Keswick on its final day of trading in December 2008

A closeout sale is the final sale of an item either by a retailer or sell off of a retailer inventory to a 3rd party company. It may be a given model of item that is not selling well, or in the case of the final closure of a retailer because of a relocation, a fire (fire sale), extra inventory or especially because of a bankruptcy.[1] In the latter case, it is usually known as a going-out-of-business sale, and is part of a liquidation. A "hail sale" is a closeout at a car dealership after hail damage. Often, when the store is shutting down, they let people know that this is their last chance to buy the merchandise. However, often it's companies that can't sell their inventory, inventors that had a bad idea or businesses that are looking for fast cash flow to pay their bills such as payroll, etc.

A closeout store is a retailer specializing in buying closeout items wholesale from other retailers and selling them at a discount. Big Lots is a well-known closeout store chain in the U.S., but other stores such as TJ Maxx, Ross Dress For Less, Marshalls, and Value City are also common, specializing more in clothing and housewares.

Some clearance merchandise is non-returnable at some stores, as the intent is of course to get rid of the items. This is especially the case with liquidation and store-closing sales. However, in many jusrisdictions such as the United Kingdom, consumers retain their usual rights during a sale, such as the right to return faulty goods (under the Sale of Goods Act 1979) and the right to return goods granted by the Distance Selling Regulations.

Rather than storing merchandise until the following year, almost every U.S. store also has post-holiday clearance sales now, sometimes starting even before the holiday (especially Christmas and Halloween). Early discounts are often around 25%, but range from zero to as much as 50%, particularly if the "regular" prices were deliberately inflated as some stores do. 50% is common just after the holiday, often followed by 75%, and sometimes even 90%, at which point there is very little if anything left to choose from. Often during after-Christmas clearance sales, they let people know that this is their chance to buy everything they didn't get for Christmas, or as the phrase goes, "everything Santa Claus forgot." Particularly in Canada, “Boxing Day sales” draw large crowds of shoppers seeking after-Christmas closeout deals.

Some stores do pack-up holiday merchandise after going 50% off for a week or so, but often fail to remove the items from shelves before going back to regular price, especially if the items are non-perishable. A few merchants actually get credit back from vendors if they do not sell certain merchandise (this, in turn, is more common with perishable merchandise, such as fresh food), who in turn may sell it to a closeout store at reduced prices.

Some customers take note of when specific retailers normally mark down merchandise further, showing up at the store on the very first day for the best selection. More general seasonal merchandise (such as winter clothing or summer patio furniture) is also put on clearance, but at more irregular times, making way for new fashions and fads.

Even thrift stores have "rolling" closeouts. In this case, all merchandise put out in a given week is given a colored tag, or a letter to indicate what color if the item is directly marked with a grease pencil. During the last week before the color is used again, everything marked in that color is discounted, usually by 50%. At the end of the week, all remaining item with that tag color are removed from the shelves. There are typically four colors, so that all merchandise is rotated every month or so. Some independent stores may use other similar systems, such as using more colors, and possibly marking down a color by 25% the week before it goes 50% off.

Clearance sales typically occur on clearance racks in brick-and-mortar stores. Stores typically place merchandise on a clearance rack and mark the price down until someone purchases the item. This clearance sale can be further enhanced by using banners and signs, both on the interior and exterior of the store. This process has been replicated on the internet. The defunct was the first clearance website to mimic a retail store clearance rack by allowing sellers to automatically mark down their items to a pool of consumers.


  1. "So What Really Is A Closeout Sale - H&J Liquidators and Closeouts, Inc". H&J Liquidators and Closeouts, Inc. 2013-12-05. Retrieved 2016-10-19.

See also

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