Governor's Office of Consumer Affairs Cracks Down on Illegal Going-Out-Of-Business Sales

June 3, 2009

ATLANTA, GA – Joe Doyle, Administrator of the Governor’s Office of Consumer Affairs (OCA), has announced that the agency has entered into settlements with three different companies who allegedly held going-out-of-business sales that were not in compliance with Georgia law. 

“What we see occurring,” says Mr. Doyle, “is companies that have no intention of closing up shop holding going-out-of-business sales as a strategy to increase store traffic.”  Not only has the agency seen going-out-of-business sales linger on for many months, but some stores have even augmented their inventory during a “liquidation sale”. According to Georgia law, a going-out-of-business sale may not last longer than 90 days, and at the end of that 90-day period the store may no longer conduct business of that nature at that location. 

OCA has entered into settlements with the following companies for allegedly holding illegitimate going-out-of-business sales:

  • Shinco Trading International, Inc. d/b/a Cyrus Fine Rugs operated a retail rug dealership in Atlanta. Before shutting its doors, the company allegedly conducted a “going-out-of-business” sale for nearly 6 months.   In settlement of this matter, the company has agreed to cease operating its retail business and to reimburse OCA $25,000 for administrative expenses.
  • Furniture World of Dallas, Inc.,a retail furniture store in Dallas, Georgia, allegedly ran a going out of business sale for over 4 months.  OCA further alleged that the business advertised a “TOTAL LIQUIDATION CLOSEOUT”, while at the same time augmenting its inventory with furniture from an affiliate store.  Per the terms of the settlement, the company is required to cease doing business and to reimburse the agency $10,000 for administrative expenses.
  • Ben Haverty’s Furniture-Xpress, LLC located in Chamblee, Georgia has also been the subject of an OCA investigation.  The agency alleges that the company ran a going-out-of-business sale for longer than 90 days; that when investigators put the business on notice, it reopened the store as an “outlet” but continued to use the word “liquidation” on receipts and other literature; and that it conducted deceptive sales price comparisons, including wording such as “Emergency Liquidation Was $___, Now $___”, when the original prices referred to were not the actual former prices.  The company has entered into a settlement with the agency, in which it has agreed to modify its sales practices to comply with the Fair Business Practices Act and to reimburse OCA $5,000 for administrative and legal expenses.

“When companies hold illegal going-out-of-business sales, they hurt ethical businesses by drawing away customers who are responding to false promises of price reductions and time-limited bargains, “ says Mr. Doyle. “And consumers are victimized because they end up paying higher prices for merchandise that they believe has been greatly discounted.  The Governor’s Office of Consumer Affairs will continue to take action against companies who conduct these illegitimate sales.”

To avoid being taken advantage of by illegitimate going-out-of-business sales, the Governor’s Office of Consumer Affairs recommends that consumers conduct their own price comparisons to be certain that they are, in fact, getting a discounted price.  If you notice that a company has been conducting a going-out-of-business sale for more than 90 days, contact the Governor’s Office of Consumer Affairs at 404-651-8600 or 800-869-1123.