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How to Shop Department Stores and Not Be a Chump

Can you find a bargain at a department store anymore? We asked high-level insiders for the inside dope

Facing an average of one sale a week from most major department stores and enough promotions and gimmicks to make you forget why you went shopping in the first place, we asked a top-level retail executive, a buyer for a big department store with a national presence, and various random sales associates to explain and decode. With their personal shopping secrets for saving time and money in hand, you'll shop smarter than ever.

* How long should I wait for that cute wrap dress to go on sale? If it's selling at the healthy rate—about 10 percent a week—it should be on sale after six to eight weeks on the floor. Don't hesitate to ask a sales associate when the dress came in and how well it is selling.

* What items never go on sale at department stores? Lingerie and cosmetics. They are not based on seasonal trends and don't fluctuate in style the way apparel does.

* What items should I never buy at full price? Men's suits. They go on sale at major department stores usually twice a year, and the size you want will always be there.

* What should I avoid? When you see more than six or seven of the same item clumped together on a sales rack, don't even bother trying one on, because even if it looks good, there is something wrong with it. Plenty of people have already tried it on and didn't buy it because of a manufacturing or tailoring flaw or some other error.

* Am I ever going to buy something cheaper than the department store bought it for? No. Many people believe that department store prices are still based on the formula of doubling the wholesale cost. No longer: Today's average markup is 50 to 80 percent. You will almost never beat the house.

* How does something end up at a discount store like Marshalls or Loehmann's? If something doesn't sell at a department store, even after it's been picked over, marked down, and offered on the floor during a big sale, the department store buyer sells the item to an apparel industry "jobber," who then sells it to a discount store. Sometimes clothing ends up with jobbers simply because it is out of season—for example, a winter coat left over until the middle of summer—in which case, the discount store will hold on to it for a year and put it out when it's back in season. Items that are offloaded this way sometimes suffer from tailoring flaws or other problems with the material or fit of the garment.

* What about outlets? Outlets are a way for full-priced retailers to capture the shopper who wants  brand-name labels for a good price but doesn't want to spend time searching for them. Make no mistake— these are profit-making enterprises, not just a place to minimize write-offs. Nordstrom Rack, for example, buys a significant portion of its goods new for that part of the business, meaning not everything you see at a Rack store has trickled down from the department store.

* Why are some price tags marked down physically and others only electronically? A sticker-on-the-price-tag markdown—or "hard" markdown—is a signal that the retailer is trying to get a poor-selling item off the floor as quickly as possible. An electronic markdown is when you see clothing under a rack that says, for example, "20 percent off," with the actual sale price showing up when you check out at a register. This often is a gambit to get customers to buy more than they intended to, in two ways: First, let's say a person wants a pair of jeans. She may leave with jeans and a top, because the top that goes with the jeans is positioned nearby on a rack under a 20-percent-off sign. Also, many shoppers don't realize that well-selling items are sometimes put on sale because they've been reordered. Retailers want the first batch out completely before the next arrives. This is where you may find a coveted item on sale.

* Why are there so many sales now? I don't remember it being like this. Fifty years ago there weren't as many sales, but the state of the business has led to an average of one sale a week for some time. In the late 1970s and early '80s, the department stores began to consolidate. Players got bigger and stronger. For example, Macy's today comprises probably a dozen other department stores, including The May Company, Marshall Field's, and Robinsons. As a store's inventory gets bigger, volume becomes as important as, if not more important than, the percent markup. More sales equal more volume.

* I only have time to shop online, but I feel like I miss out on sales.  When ordering online, check the Web site retailmenot.com, which posts promotional codes for major department stores.

* How are prices set? Ultimately the consumer sets the price by deciding what he or she is willing to pay. In modern retail, computer software is mainly responsible for establishing prices and determining when and by how much they come down. The mathematical modeling programs are smart, but they're not perfect. Executives are putting pressure on buyers to obey the computer pricing models because they provide predictable results. Still, many buyers set their own prices because, unlike a computer, they can factor in advertisements, promotions, market competition, and intangibles such as shopper psychology and mood.

* Have you seen people shopping less with the downturn in the economy? Unfortunately, yes. For some people this means they'll buy less; for others it means they'll shop at different places. Will some women still pay an ungodly amount for this season's "it" handbag? Yes. Will that same shopper buy three this year? Probably not. In response, department stores are buying less. The trick is to balance having less in inventory with maintaining the image of always having many brands and many styles.  

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