My mom still tells the story of my first outlet mall experience. I was fourteen, we were on a family road trip to Wisconsin, and I convinced my parents to stop at this massive complex just off the highway. “They’ll have all the good brands for, like, half price,” I promised, regurgitating what I’d heard from friends at school. Two hours later, my dad was pacing the parking lot on his cell phone trying to salvage what remained of our schedule, while I stubbornly refused to leave until I found “the perfect polo shirt” at a price that would justify the detour.
I eventually emerged with a royal blue Ralph Lauren polo that, in retrospect, was probably made specifically for the outlet and was roughly the same price as the ones at the regular department store back home. But I was convinced I’d pulled off some incredible feat of shopping wisdom, proudly explaining to my increasingly irritated family that I’d “saved over $45!” on a shirt that retailed for… wait for it… $85. Which no polo shirt on earth should ever cost, let alone one purchased by a teenager whose only source of income was cutting the neighbors’ grass.
Twenty-plus years later, I’ve learned a thing or two about outlet shopping. Mainly that it’s a fascinating psychological game designed to make you feel like you’re winning while you’re often just buying different merchandise at manufactured “discount” prices. Not always—there are legitimate deals to be found—but the system is built on a foundation of human cognitive biases and retail sleight of hand.
Let me break this down for you based on years of reporting on the retail industry, countless interviews with brand executives, and, yes, my own shopping adventures and misadventures.
First, the uncomfortable truth: the vast majority of merchandise at most outlet malls today was never intended for the regular retail stores. It’s made-for-outlet product, designed specifically to hit lower price points while still carrying the prestige of the brand name. This isn’t necessarily bad—the quality can still be decent—but it’s important to understand what you’re actually buying.
How can you tell the difference? There are a few telltale signs. Many brands use different labels for their outlet merchandise. For example, J.Crew’s outlet line is called “J.Crew Factory” and has a small star on the label. Brooks Brothers uses “346” for their outlet line. Banana Republic has “Banana Republic Factory Store.” These naming conventions aren’t accidental—they’re legally required distinctions that allow brands to produce different quality levels under similar names.
On a recent reporting trip to Woodbury Common (the Mecca of outlet shopping about an hour north of NYC), I spent a day comparing items at the outlets to their mainline counterparts. At one major American designer’s store, I found a shirt that looked nearly identical to one I’d seen at their Madison Avenue flagship. But upon closer inspection, the differences were clear: fewer stitches per inch on the seams, slightly thinner fabric, and buttons made of plastic rather than mother of pearl. Was it still a decent shirt? Absolutely. Was it the same product at a miraculous discount? Not even close.
My friend Derek, who worked as a buyer for a major American luxury brand for years, explained it bluntly: “We had specific designs and materials that were only used for outlet production. The outlet products would mimic the aesthetic of the main line but with corners cut in ways most consumers wouldn’t notice immediately. Different factories, different fabrics, different specifications.”
This explains how outlets can advertise those tempting “60-70% off retail” signs. The comparison price was never real to begin with—it’s what a hypothetically similar item might cost at the regular store, not what this specific item ever sold for.
But that doesn’t mean there aren’t real deals to be found. About 10-15% of merchandise at most outlet stores is genuine overstock from the main retail channels—last season’s items, overproduced styles, or merchandise that didn’t sell as expected. This is where the true bargains live, if you know how to spot them.
So how do you identify the actual retail merchandise amid the made-for-outlet products? Some strategies that have served me well:
Know the brand’s main line intimately. If you’re hunting for specific brands, spend time in their regular stores or on their websites first. Familiarize yourself with their current and recent collections, the quality of materials, construction details, and price points. This makes it much easier to spot the genuine overstock items.
Check the quality markers. Examine stitching density, fabric weight, lining materials, and hardware. For example, higher-end dress shirts typically have single-needle stitching (creating a clean, flat seam) while cheaper shirts use chain stitching (which looks like a tiny zigzag). Real leather has variations in texture and color; perfect uniformity often signals synthetic materials or heavily processed cheaper leather.
Look for irregular tags or markings. True overstock items often have small marks on their tags—a dot from a marker, a small cut in the corner, or an “irregular” stamp. These indicate merchandise that was redirected from main stores to outlets.
Research tier markings. Some brands use specific codes to indicate their quality levels. For Nike, look at the tiny number on the size tag—higher numbers typically indicate higher quality lines. For Ralph Lauren, the label itself tells you a lot—Purple Label and Black Label are their highest tiers, while Chaps and American Living are lower-end lines.
When I was working on a feature about American manufacturing last year, I interviewed Jason, who’d spent eight years as a manager at a major outlet center in the Midwest. His insider’s perspective was illuminating: “Monday and Tuesday are usually the best days to find the genuine overstock, right after they’ve done inventory and transfers from the retail stores over the weekend,” he told me. “By Saturday, the real deals are mostly gone, picked over by employees and regular shoppers who know the patterns.”
The psychology of outlet shopping is just as important as the merchandise itself. These places are engineered to trigger what behavioral economists call “the thrill of the hunt.” Those big percentage-off signs create a sense of urgency and achievement—you feel like you’ve won something even when the actual savings might be minimal.
I’ve experienced this myself. Last summer, I found myself bizarrely excited about buying a pair of chinos at “40% off the outlet price,” which was already supposedly “60% off retail.” Did I need more chinos? Absolutely not. My closet has an entire section dedicated to various shades of khaki pants that are functionally identical. But the layered discount created this irrational fear of missing out on an extraordinary deal. Only later did I realize the final price was maybe $10 less than what I would have paid for similar quality pants at a regular mall.
The layout of outlet centers also contributes to this psychological manipulation. Unlike regular malls where you can park near specific stores, outlets often use remote parking with shuttle services or require long walks between stores. This creates a sunk cost feeling—”I’ve come all this way, I should buy something to make the trip worthwhile.” Add in the limited access to food and comfortable rest areas, and you’ve got a situation where rational decision-making gradually erodes over time.
“We actually saw conversion rates increase the longer people stayed,” Jason explained. “After about two hours, people would start buying things they weren’t even particularly interested in when they arrived. After three hours, price sensitivity decreased dramatically.”
So how do you beat the system and find genuine value? Here’s my strategy after years of navigating the outlet landscape:
Go with a specific shopping list. Know exactly what you’re looking for before you arrive, which brands you want to check, and rough price points that would constitute actual value. This limits the impulse purchases that outlets are designed to trigger.
Set a firm budget. Decide in advance how much you’re willing to spend and stick to it. The “savings” don’t matter if you’re buying things you don’t need or spending money you haven’t budgeted.
Compare prices before you go. Check the brand’s regular website and major retailers to understand current pricing for similar items. Many times I’ve found that regular retail sales (especially end-of-season clearance) actually offer better prices than outlets for genuine merchandise.
Shop off-peak. Weekday mornings are typically less crowded, which means less competition for the genuine overstock items and a more relaxed shopping experience that allows for better decision-making.
Check return policies carefully. Many outlet purchases are final sale or have more restrictive return policies than regular retail. Nothing destroys the value of a “great deal” faster than realizing you’re stuck with something that doesn’t work for you.
Focus on timeless items. The best outlet purchases are classic pieces that won’t look dated quickly—think basic sweaters, simple shirts, well-cut trousers, and minimalist accessories. Trendy items are often made-for-outlet versions of what was hot six months ago.
A good test case is dress shirts. At a regular retail location, a high-quality American dress shirt from a premium brand might cost $125-175. At their outlet, you’ll find shirts for $49.99 with signs claiming “Compare at $135!” The outlet shirt looks similar at first glance, but examine the fabric closely and you’ll notice it’s lighter weight, with a different finish and fewer stitches per inch.
Is the outlet shirt a bad deal at $50? Not necessarily—it might still be decent quality for the price. But you’re not getting a $135 shirt for $50; you’re getting a $50 shirt with a fancier label than it might otherwise have.
The most egregious marketing trap I’ve encountered is the perpetual “Additional 40% Off Already Reduced Prices” sign. During a six-month research project on retail pricing, I visited the same outlet center once every two weeks. Certain stores had these “limited time” extra discount promotions running literally every single time. The prices never actually changed—only the signage suggesting urgency rotated.
So are outlets completely worthless? Not at all. I’ve found genuine bargains—a perfectly good Brooks Brothers overcoat for 70% off retail that’s still in my regular winter rotation five years later, a set of Wüsthof kitchen knives at a fraction of their usual price, actual mainline Allen Edmonds shoes with minor cosmetic flaws at substantial discounts.
The key is understanding that outlets are now their own retail channel with their own pricing structure and merchandise, not simply a clearinghouse for unsold main store inventory. They offer a different value proposition—access to brand names at more accessible price points, often with corresponding adjustments to quality.
If you go in with clear eyes, specific goals, and realistic expectations, outlet shopping can be worthwhile. Just remember that the greatest value isn’t found in the biggest advertised percentage off, but in the items that truly meet your needs at a price that represents actual savings compared to alternatives.
And maybe don’t drag your family on a two-hour detour for a single polo shirt. Trust me on that one.
