Buyer Should Be Wary of Banners, Labels

These are the red flags of retailing: “IRREGULAR” stamped on the collar, “SECOND” across the package, “AS IS” scribbled on the label. Everyone knows they’re warnings.

There are others, only suspected, because they seem not warnings but come-ons: Closeout, Clearance, Liquidation, Discount or Off-Price. Even Regular, Original, or Usual price. And sometimes: “Wholesale.”

But none has uniform or official definitions. They are words of art, not law, and their application follows retail custom rather than rule. Unfortunately, this makes it difficult for the consumer to read them, and retailers who use them aren’t eager to discuss them. Clearly, their use demands attention.

SECONDS, or “factory seconds,” are not first quality and are therefore pulled off the line at the factory. Usually, goods so labeled have only minor, barely perceptible flaws.

There are flaws, for example, that make garments “not perfect,” says Joseph Siegel, vice president of merchandising at the National Retail Merchants Assn. in New York, “but don’t affect wearability.” It could be a dye lot mistake, or a “slub”--a thickening in the weave due to a doubled or tripled thread--or perhaps “an uneven pattern,” says Edgar Dworsky, spokesman for the Massachusetts Executive Office of Consumer Affairs, “or the stripes on a pocket not lined up with the stripes on a shirt.”

IRREGULAR is sometimes synonymous with seconds, sometimes applied to everything below seconds (“thirds” and “fourths” within some industries), and sometimes to all imperfect goods. Thus, irregular sheets and towels could look flawless or have a foot-long tear.

Some stores avoid the words, coyly posting sale prices and noting, “If perfect, regular price would be . . .” Filene’s Basement, Boston’s famous markdown specialist, labels all irregular goods “Nearly Perfect.”

AS IS, a warning sometimes accompanied by a pin or tape marking the flaw, is the flag “one should pay most attention to,” says Gary Walker, spokesman for New York’s Consumer Affairs Department. Usually, as-is merchandise was damaged, says Siegel, “while in the retailer’s possession.” Often the actual damage is unknown, as in a demonstration model that has been on display for some time.

Some retailers think “As Is” serves automatic notice that goods are not returnable. But this is neither justified nor customary at good stores; New York City, for one, requires specific warning that an item can’t be returned.

Generally, the law--federal, state or local--doesn’t dictate the terms for less-than-perfect goods but requires disclosure. It’s deceptive to pass off as brand-new, first-quality merchandise something that’s second-hand, used, defective, seconds or blemished.

OFF-PRICE vs. DISCOUNT: As labels, they’re pure connotation: “What do you want to call yourself?” says Siegel. Originally, he says, discounters “were hard-goods stores, selling name brands at minus-list prices,” and later, chains selling “basement goods” at low markups. “Off-price” stores, a mid-1970s concept, paid low prices for quality name-brand and designer garments that had been overproduced, then sold them “off-price.”

“Off-Price” still sounds tonier to most shoppers, if less than it did. So one New York chain, says Siegel, now says it’s not a discounter, not even an off-pricer, just a “very aggressive retailer.”

SPECIAL PURCHASE describes goods the retailer “doesn’t normally carry,” says Dworsky, “but he got a good deal on the item”--for buying in volume, odd colors or maybe out of season. In other words, at another time, under other circumstances, and on other goods, the store would charge more. Big deal.

CLEARANCE means a retailer wants to get rid of a whole line, or several lines, and has drastically cut prices; the stuff never moved well, or its season is over. But there are stores, says Gary Walker, that deceptively advertise “ ‘Clearing out all merchandise!’ and they’re just referring to what everyone would like to do every day.”

CLOSEOUTS may be goods a manufacturer discontinued, ostensibly selling them cheap, or items that the retailer will no longer be carrying. A retailer could also be closing out or liquidating his whole business--the ultimate clearance, implying the ultimate in bargains.

If the liquidation (LIQUIDATION!) is real, says Gary Walker, one must remember “that the store will disappear along with the inventory, and (dissatisfied) buyers will have nowhere to complain.” Some liquidations are deceptive: There are retailers who “liquidate” selected stock, at supposed sale prices, every month. Municipal ordinances may require licenses for going-out-of-business sales, checking that the retailer actually closes down, but surveillance and enforcement is impractical, if not impossible.

REGULAR price, as in “Regularly $100, now $59.99!” is supposedly the price at which regularly carried merchandise is regularly sold, even after the sale. But it could also be the price at which it is briefly listed between sales or the price at which it would be sold if it could sell at normal markup, or just a bogus high price marked on the ticket so $59.99 can be called a $40.01 saving.

ORIGINAL price, similarly, is supposedly the price at which something was first offered. It may have been for only a minute, and may never have sold at that price, or may have been marked down to $89.99 and $79.99 in between, but there it is: “Original price $100, Sale Price $59.99.”

USUAL price is the price supposedly asked by competitors. It may be asked by only one competitor, or may be a “composite” price of similar or comparable goods. No matter: “Usual price, $100, Our price, $59.99.”

There have been periodic efforts to regulate comparative price advertising--setting the number of days a price must prevail to be called “regular,” or the number of sales made at that price, or the number of competitors selling it for that. But no definitions have been precise enough for retailers to follow with impunity, or general enough to be easily applied, leaving everyone time to get other work done.

Finally, there’s WHOLESALE TO THE PUBLIC, “a come-on,” says Dworsky, “that implies prices as low as wholesale and isn’t true.” Anyone selling to the public is retailing and is unlikely to sell goods at exactly his cost.

Obviously, there are common warnings sounded by banners and flags alike, not least of which is that all of them raise questions. One should ask them.