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What is the Difference Between a Sale and a Clearance?

Sale or Clearance

If you are unfamiliar to the terminology of retail marketing, you likely are aware that a sale and a clearance are both terms to describe products being sold at reduced prices, but that is pretty much it. Whenever customers see discounts for certain items, they are tempted to check the products out more to determine if they can be of use to them at the lowered price.

Some people think that the terms “sale” and “clearance” can be used interchangeably, but they are in fact used for two different occasions in retail.

What is a sale?

A sale is a promotional tactic created by companies or store owners, used to attract more customers and attain a high turnover rate. When you notice a sale, you will happen to notice a popular item that has a reduced price, or other offers in effect (ex: Buy 1, get 1 free.)

Store-wide sales are orchestrated for many occasions throughout the year, including the holidays, back to school shopping, and before the summer. These sales usually only last for a limited time, before the retail price tag on certain items go back up. So if you see a shirt on sale for $15 at a department store, it could be priced at $25 a month later.

This is a scheme to tell customers that they should take advantage of sales in order to spend less, and not wait until the price of a certain item or items go back up. Sales are used to attract customers to stores at certain times of year, and companies hope for customers to buy more products while they’re in the store, rather than to save money on just one.

What is a clearance?

A clearance is a special type of sale that might attract more customers than traditional sales. This is due to the store trying to get rid of certain items for one reason or another. The store might be going out of business, the items are going out of season, or there is not enough room in the store for new items.

Some stores actually have a space in their shopping area specifically for clearance items. For example, if you visit a clothing store in April or May, you may happen to find winter coats on clearance, as there is no reason for consumers to buy winter clothes during the summer. Items on clearance will be priced on their retail price tags even lower than traditional sales, as they tend to be for items that no shopper is willing to buy, unless it is for a bargain.

Unlike a sale, the price of an item on clearance will not go back up. The longer an item is up for clearance, the lower the price tends to go before the store decides to pull it from the inventory. Stores won’t advertise clearances in print or in media like they would a sale, however, unless they are going out of business.

Here are the differences between sales and clearances:

  • Sales are only in effect for a period of time, whereas clearances are in effect indefinitely until the item is sold or puled form the market.
  • Sales are meant to attract customers to the store, whereas clearances are meant to help sell unwanted inventory to make room for new inventory.
  • Sales are put on items that are widely popular, whereas clearances are put on items that are most likely seasonal and/or outdated.

Now that you have a better understanding of what sales and clearances are, you now know how to utilize both terms accordingly.

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