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3 On Your Side: Are Outlet Malls Not All They Seem?

By Jim Donovan

PHILADELPHIA (CBS) -- They offer big savings on brand name products.  But are outlet store prices too good to be true?

Some lawmakers think so and believe shoppers are being misled!

3 On Your Side consumer reporter Jim Donovan heads to the outlets with our undercover cameras to find out.

From J. Crew to Coach, Lane Bryant to Gap, most shoppers head to the outlets for a bargain.

But Connecticut Senator Richard Blumenthal isn't quite so sure.

"I'm very concerned that outlet stores may be misleading the consumers," said Senator Blumenthal.

Senator Blumenthal is among a group senators asking the Federal Trade Commission to look into claims that merchants may be selling lower quality items produced specifically for outlet stores without properly informing consumers.

"There's a lot of evidence that people shopping at outlet malls or at outlet establishments have no idea that goods and merchandise are made specifically for outlet malls," said Blumenthal.

So 3 On Your Side went undercover shopping to check for ourselves.

While we didn't see any misleading prices or sale signs one thing was confusing, we couldn't tell from the price tags or garment labels whether an item came from a retail store or was made specifically for the outlet.

So we asked store personnel and found the answer varies.

For example at the Tanger Outlets in Atlantic City, items sold at Banana Republic, J. Crew and the Gap, are made specifically for the outlets.

While Michael Kors, Coach and Lane Bryant offer a combination.  They sell items from retail stores along with items made for the outlets.  Lane Bryant even posts signs to direct cost conscious consumers.

Still, Tod Marks of Consumer Reports says outlet customers are often savvier than the average shopper.

"Outlet shoppers tend to be very brand conscious they know what a brand stands for.  They're willing to accept whatever sort of accommodations made or whatever sort of short cut if you will is taken in order to achieve a lower price point.   They know it might be slightly different but it doesn't mean it's inferior.  In terms of fit and finish and overall quality we rarely find, in fact, that there's any significant compromise in quality," said Marks.

And savvy shoppers were quick to point out, you're still getting the brand you like.

And just because a store is in an outlet complex doesn't mean it's an outlet location.  That was the case when we visited the Old Navy.  It's just like any other Old Navy. Same prices and same merchandise.

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