Outlet malls are built around the thrill of a deal.
But a new report reveals that many items sold at outlet stores are made specifically for those locations — and are not the same quality as products found in traditional retail stores.
The nonprofit Consumers' Checkbook surveyed 40 outlet stores across the country, from Adidas to Zales, and found half of those retailers were producing merchandise made exclusively for outlet locations.
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"Their outlets were carrying nothing but things that were made especially for them," said Jennifer Barger, director of content at Consumers' Checkbook. "You pay less, but you're also getting lower quality."
Watch as Consumers' Checkbook shows what they found in outlet stores:
According to Consumers' Checkbook, some items may look like what you would find in a main retail store, but use different materials or lower-cost fabrics — such as a dress made with synthetic linen instead of cotton, or a men's jacket manufactured without lining.
How to identify made-for-outlet goods
Historically, outlets were known for selling overstock or slightly damaged items at deep discounts. For some retailers, that is still the case, especially high-end luxury brands that still use outlets to sell last season's merchandise.
"Burberry, Louboutin, Lafayette 148 — these really high-end brands — they often don't have a ton of outlets, and they often are operating genuine clearance centers," Barger said.
Home decor outlets are also more likely to sell original-store goods that are either discounted or slightly damaged versus made-for-outlet merchandise.
For other retailers, Barger said subtle clues can help identify items made for outlets versus goods from the original store.
At J. Crew, for example, outlet items carry a distinct label.
"They have two diamonds underneath them. Whereas if you were at a regular J. Crew, the label inside would just say J. Crew," Barger said.
Consumers' Checkbook also identified the following label clues in its survey:
- Ann Taylor Factory Store: Labels say "Ann Taylor Factory"
- Banana Republic Factory: Three small diamonds under "Banana Republic"
- Brooks Brothers: Outlet items have an "1818" label versus "Established 1818" tags from the regular store
- LOFT Outlet: Labels say "LOFT outlet"
- Talbots Outlet: Labels have three dots under "Talbots" and are white
For a number of other retailers, there is no way to spot made-for-outlet products, as the tags look the same.
Others, according to Consumers' Checkbook, use the words "comparable value" or "MSRP" price, then list a lower "bargain price."
Benefits to outlet stores
None of this is to say that outlets are a bad choice.
Brittany Bleich of Simon Property Group, which operates a large portfolio of outlet centers, said outlet stores frequently layer additional markdowns on top of already reduced prices.
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As of July 24, "Banana Republic Factory is 50% off everything right now in their store," Bleich said, "which you will not see at their full price stores."
Outlet malls are also convenient with dozens of popular brands in one place.
"I think they have great prices. It's fun to see all the different stores all at once," said shopper Laura Veitkus. "Especially when you have multiple kids. They have different things that they like, different styles."
Outlets are often a destination for deals during summer vacations or as students head back to school.
Bleich estimated about 60% of stores will offer back-to-school deals.
"An example is Adidas outlet offering up to 60% off," she said.
Tips for shopping outlets
Some shoppers say the experience of shopping outlets can be unpredictable. Shanna Lutton, who shops at outlets with her daughter, said the prices vary.
"It depends. Sometimes they're better, sometimes they are similar to what you'd find somewhere else," Lutton said.
Barger said the key to being a savvy outlet shopper is simply being aware of what you're buying. Consumers' Checkbook recommends the following steps:
- Know which stores offer only made-for-outlet merchandise
- Check prices of similar items currently for sale at the mainline store
- Familiarize yourself with a brand's hallmarks of quality
- Disregard tags labeled "compare at" or "MSRP"
If owning a true Coach or Kate Spade bag is important to you, Barger suggests confirming a product is from the original store with the staff.
For designer clothing and accessories for less, Barger also recommends comparing prices at a local consignment store or online resale platform like ThredUp, Poshmark or TheRealReal.
Bottom line: Outlets can offer real savings on designer brands — just know what you're buying before you spend, so you don't waste your money.
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