
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, July 26, 1990                   TAG: 9007250184
SECTION: EXTRA                    PAGE: E-8   EDITION: METRO 
SOURCE: Tammy Poole
DATELINE:                                 LENGTH: Medium

GOING-OUT-OF-BUSINESS SALES CAN COST MORE

Q: I went to an area store that is having a going-out-of-business sale, and noticed that some items have new price tags, marked with higher prices, placed over the original tags. It's very obvious, because the previous price sticker can be clearly seen under the new sticker. Is this legal? Also, is there a time limit to these sales? - T.B., Roanoke

A: "There's no law governing prices during going-out-of-business sales that I'm aware of," said Larry Poteet, president of the Roanoke Merchants Association. Buyers should beware, he added.

Selling items for a higher price during a going-out-of-business sale is a practice that Fred King, Salem commonwealth's attorney, said he understands. King suggested this hypothetical situation: "Assume your normal product is A-class widgets that you bought for $4 and sell for $5. If you're going out of business - in order to make a few extra bucks and cut your losses a little - you buy C-class widgets for $3 and still sell them for $5.

"It may be a little suspect as to what we hope people will do, but as I read the going out-of-business state statute, that practice is not illegal," King said.

The state statute does require that a company quitting business get a local permit for its final sale and provide an inventory of what is to be sold. The law forbids mixing other goods with the inventoried items. The permit, which costs about $65, is good for 60 days and is renewable for another 60 days.

But recently there have been two notable local exceptions to the law:

Ames department store did not have to obtain a going-out-of-business-sale permit from the City of Roanoke, according to the Commissioner of the Revenue's office. That's because Ames was ordered to go out of business by a federal bankruptcy court ruling, meaning the locality was not involved in the proceeding.

Stephenson & Aldridge, A Salem furniture retailer, initially did not have a permit because of a misunderstanding over what was required. Salem Commissioner of Revenue Max Brown said he had been unaware of the state law requiring the license, so the store owners were told they didn't have to have a permit. When the Better Business Bureau raised concerns that the store had not obtained a license for the going-out-of-business sale, the store was issued a permit.

by CNB