Ten tips

By LAURA T. COFFEY

© St. Petersburg Times, published May 13, 2001

Take steps to protect yourself when companies go out of business

Businesses often close, or announce that they're closing, with little warning. Customers may find that they're unable to get merchandise and deposits back or have gift certificates honored. They also run the risk of being duped by phony "going-out-of-business" sales. To protect yourself, consider these tips.

1. Be alert. Before doing business with a company, look around carefully. Are the shelves and showrooms fully stocked? Does the business site look temporary?

2. Research the business. Investigate the company's complaint history and pending lawsuits by calling the Better Business Bureau at (800) 955-5100 and the Florida Department of Agriculture and Consumer Services at (800) HELP-FLA (435-7352).

3. Ask around. Ask friends, relatives and co-workers if they know anything about the company. Determine whether the business belongs to an industry association that requires members to adhere to a code of ethics, and call the association to verify the company's membership.

4. Become a regular. Particularly if you've dropped off an expensive item for repair or left a large deposit, call or visit the store regularly to check on your repair or order. Be skeptical if you are told to wait more than 30 days.

5. Know how to proceed. If you arrive at the business location and find that it's closed, look for a sign providing information on how to contact the former management. If the business in question has multiple locations, contact the company's headquarters or another outlet for help.

6. Do some sleuthing. If the business operated out of only one location and it has vanished without a trace, try contacting neighboring business owners, competitors and the building's owner or manager. They may have a forwarding address or contact number.

7. Sometimes the company isn't going anywhere. Be aware that some stores run "going-out-of-business" sales on a regular basis or over several months, even though they keep stocking new merchandise. They hope to ring up big sales from customers who rush into the store with a sense of urgency, but doing this is illegal in Florida. Companies truly going out of business are required to get a permit from the county and must close within 60 days.

8. Those may not be bargains. Unlike authentic liquidation, bankruptcy and going-out-of-business sales, bogus sales often feature prices that have been slashed from ridiculously high levels. Examine that "half-off" price carefully; it may be higher than the normal retail price.

9. Understand fraudulent tactics. Some stores that claim to be going out of business simply reopen under a different name in a new location, or even in the same location, and then kick off another going-out-of-business sale. Other stores post signs for "going-out-for-business" sales, a deliberately misleading word change. Going-out-of-business advertisements must include a county permit number.

10. Take precautions. Check warranties to make sure the merchandise you're buying can be brought to a service center for repairs or maintenance after the store closes or relocates.

- Compiled by Laura T. Coffey.

Sources: Florida Attorney General's Office (http://legal.firn.edu/consumer/index.html); and the Better Business Bureau (http://www.bbb.org)

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