What is a Clearance Sale?

R. Kayne

A clearance sale is intended to reduce inventory by providing customers with deeply discounted merchandise. A clearance sale can be storewide or limited to particular departments, products, product brands or models.

Discontinued products are often sold at clearance prices to make way for replacement stock.
Discontinued products are often sold at clearance prices to make way for replacement stock.

Seasonal clearance sales are quite common for clothing retailers who need to make room for new stock. Summer closeout sales can be the best time to buy shorts, bathing suits and tank tops in preparation for the following year. Sticking with solid colors and basic designs that don’t go out of style will ensure you aren’t left in the cold, come the new year. Having a store of standard items means you can buy fewer clothes when summer rolls around, filling in your wardrobe with a sprinkling of the newest styles.

A store may run a sale on hair-care products and cosmetics that are approaching their expiration date.
A store may run a sale on hair-care products and cosmetics that are approaching their expiration date.

Designer closeouts also prompt clearances sales. Styles are continually evolving and what's in one minute is considered out the next. Jeans go from tight fitting to "relaxed," from stovepipe to peg leg, from high rise to low rise, and all points between. Stone washed, acid washed, ripped, mottled, new or faded just right, a store might have a clearance sale to blow out clothes that are on the verge of being replaced by a new style or look, or to move a line that has stagnated on the shelf.

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Lowering prices is a common method of increasing demand for clothing at the end of the season.
Lowering prices is a common method of increasing demand for clothing at the end of the season.

Personal products like makeup and crèmes are also often put on clearance sale, particularly when the line has new products coming or has reformulated the existing product. Products that have an end of life date, such as certain shampoos and treatments might also be put on clearance to move the stock before it must be taken off the shelf.

Autumn and winter sweaters might be sold at the end of winter during a clearance sale to make room for spring clothing.
Autumn and winter sweaters might be sold at the end of winter during a clearance sale to make room for spring clothing.

Discontinued products are often sold at clearance prices to make way for replacement stock, sometimes at a higher price point than the original item's standard price. Electronics, for example, that have been improved with new features or expanded capability routinely replace older models that might be blown out at close to cost. For those who don’t want or require the newer features, a clearance sale can provide a rich opportunity to get great prices on personal gadgetry.

A vendor might also use a clearance sale to get rid of returned merchandise that is non-defective but can no longer be sold as new. This is often referred to as "open box" merchandise. In some cases a product might have been a demonstration model. Open items might not have the same guarantee that comes with new merchandise, so read the fine print before buying.

A going-out-of-business sale can be the best opportunity to get great merchandise at fantastic prices. Even current, popular brands are often available at close to, or under cost.

Note that clearance items are sometimes nonreturnable, even if defective. Also, clearance items that are returnable are sometimes only eligible for store credit. Check store policy before purchasing, and if the policy is unclear, ask a representative.

Clearance sales allow customers to buy highly discounted merchandise.
Clearance sales allow customers to buy highly discounted merchandise.

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