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6 Ways to Tell If Your Appliance Store Is Going Out of Business

August 8th, 2023 | 7 min. read

By Steve Sheinkopf

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How to Tell When an Appliance Store Is Going Out of Business 

 wrote this article prior to the MA Tax-Free Weekend. Before making a full deposit at a store to save on taxes, it is crucial to exercise caution and carefully choose where you shop.

Recent events have demonstrated that you may never receive your purchased items or your money back, especially with the closure of a well-known store.

In this article, you will learn how to spot the signs of a store in financial trouble through reviews, store displays, and other prominent signs.

If there's one lesson to take away from this article, it's the importance of going into a store before making a major purchase.

Let's get started.

 

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Spotting Store Closures: The Latest Appliance Challenge in 2023 

Store-going-out-of-business

About 20 years ago, I walked into a competitor's showroom in Brookline. He wanted us to buy his inventory and assets. The once proud company was in absolute disarray - chaos was a better word.

The father was a solid businessman and well respected, but the son had no flair or talent for this business. It was 3 o'clock on a Saturday, and despite the stated business hours being until 6 PM, he said, "I am going home."

I stood in the parking lot incredulous. Fortunately, customers didn't lose their money as he went out of business without owing people their deposits or appliances, but this is not the norm.

People lose tons of money in store closings every year.

Recent Events

Photo Courtesy of WCVB-TV Boston

Two weeks ago, an appliance store went out of business, shutting down and taking millions of dollars. I feel awful for the customers. How would they know? This was a 55-year-old business, and the Google Reviews were pretty good as well.

You want to avoid this:

7/21/2023: "If I could give NO stars, I would! This company is horrible and unethical! We ordered $31,000 worth of appliances in March for delivery in June. Paid in full. Phone lines are now disconnected, and the windows and doors of the building are boarded up. They have our money, and we don't have the appliances or any information. No one will return calls or emails. Horrible."

I will show you some early warning signs, so you don't find yourself in the same situation.

Why You Will See More Store Closures

Home improvement surged during COVID-19 as people couldn't travel to restaurants or engage in other leisure activities, so money was spent at home.

However, costs increased as well, especially for appliances and warehousing (up 300% in ten years).

The percentage difference lost could be 10-20% if the store sold it before an increase but didn't deliver it until after.

Many stores didn't have a choice because they didn't own their own warehouse or didn't have enough space.

For example, we had to lease two more warehouses and are moving into a new warehouse on November 1, 2023.

 

6 Ways to Tell If Your Appliance Store Is Going Out of Business

1. They Don't Answer Phones, Texts, or Email

empty-office

When all communication ceases, that's a problem. Now the bar is set pretty low, as many stores don't answer the phones with general inquiries before you buy anything.

But that should change once they have your money.

Pro Tip: Typically, the salesperson will possess their own phone line extension. This is something you should aim for.

Our routine involves daily phone monitoring, where we keep an eye on screens displaying individuals in queue for assistance, along with tracking the average response time for picking up calls.

2. The Store is Closed During Open Times

Store-closed

This is a huge red flag. It raises concerns when the store's stated opening hours are from 10 AM to 6 PM, but the doors are locked as early as 3 PM.

Customers complained about the last store closure, saying the store was always closed.

3. Incomplete Displays

counter-depth-refrigerator-yale-appliance-hanover

When you see displays with tons of holes where appliances used to be, the store may not have enough money to restock or merchandise the store.

4. Bad Reviews

poor-reviews

This one is tricky You probably know the good stores from the bad ones by the overall rating.

However, it's much harder when a good store becomes bad because the older good reviews can cancel the more recent bad ones.

You should be interested in the more recent reviews.

Therefore, try this instead:

  • For Google Reviews, type in "latest." Then type in "delivery" to look at potential delivery issues.
  • On Yelp, type in "latest" and then search for delivery.

Also, look at store responses. No responses mean they probably did not address or fix the issue.

5. The Prices Are Ridiculously Low

appliance-sale-store-closing

Using appliances as an example, we all buy from the same sources.

Most quotes are a 2-7% differentiation at most because appliance margins are low compared to other industries.

When you see 10, 15, 20% differences, you must question their ability to deliver. It doesn't matter to the store about committing fraud; they aren't delivering your appliances anyway.

By the way, I am NOT saying I don't want you to shop for the best deal.

6. They Demand Full Payment for a Delayed Delivery

delivery-delayed

You will be asked for full payment by any store if you are buying for immediate delivery. However, asking for full payment for an order delivered far in the future is another red flag.

Look at the reviews of the store that just went out of business, and you'll see a pattern: low prices with full deposits.

We ask for a deposit and will hold your appliances for up to three months. That's a difficulty you are in now with Tax-Free Weekend because you do have to pay in full to save the tax.

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Tips for Smart Appliance Shopping

Shop in Established Stores

yale-appliance-hanover-showroom-front-desk

You have to believe Jordan's Furniture is not going out of business for furniture. They are run by the same family and owned by Berkshire.

Amazon is another good choice. You might doubt their execution, but Home Depot, Lowes, and Best Buy are too big to fail.

You will have at least one to three solid independent dealers in every geographic market. Find them by looking at their reviews and displays and speaking to their people.

You need to spend time vetting all your choices.

Schedule a Delivery Quickly

yale-appliance-delivery-truck-2023

If you are unsure of a store's fitness, take delivery asap to reduce the odds of losing money.

You can and should always claim a chargeback on your credit card with the first missed delivery.

Which brings us to a problem: Don't be pressured to make a purchase. Only make the purchase when you are ready.

Appliance sales happen every year at the same times - there's Black Friday, Tax-Free Weekend, Labor Day, Memorial Day, July 4th, and Presidents' Day.

It's like catching a train or bus. Don't worry, another train or bus will arrive at the same interval, so don't be distressed you missed the last one.

Read More: 6 Odd Yet Effective Tips to Choose an Appliance Store

How Do You Recoup Your Money When a Store Closes

You would think the bank would just refund your money. I thought so too, but that is not the case, according to the ten articles I read online.

Most of the time, you will lose money, but here is the painful process you want to avoid:

  • For Chargebacks: Reason for Chargeback: To initiate a chargeback, there must be a valid reason, such as non-delivery of goods, defective products, or fraudulent charges. If the reason for the chargeback is legitimate, it improves the chances of winning the dispute.
  • Evidence and Documentation: Providing strong evidence is crucial in a chargeback dispute. This includes order confirmations, invoices, receipts, correspondence with the store, and any attempts to resolve the issue before the store went out of business. Documentation should demonstrate that the consumer made a good-faith effort to receive the product or resolve the matter.
  • Time Limit for Chargebacks: Credit card companies have specific time limits for initiating chargebacks. Generally, it is advisable to initiate a chargeback as soon as the issue arises or becomes evident. Delaying the process may reduce the likelihood of a successful chargeback.
  • Credit Card Company Policies: Each credit card company has its own policies and procedures for handling chargeback disputes. Some companies may be more consumer-friendly and may provide better protection in these situations. Understanding the credit card company's policies can help build a stronger case.
  • Purchase Protection Policies: If the credit card used for the purchase offers purchase protection or extended warranty coverage, it may provide the consumer with an additional layer of protection. Check the credit card's terms and conditions to see if such coverage applies.
  • Merchant Processor or Insolvency Proceedings: In cases where a store has ceased operations, it may have used a merchant processor to handle credit card transactions. Sometimes, the merchant processor might be held liable for chargebacks if the store cannot fulfill its obligations. Additionally, if the store has filed for bankruptcy, consumer claims may be considered in the insolvency proceedings.
  • Contact the State Attorney General's Office: In cases where a store has closed down due to alleged unfair or deceptive practices, consumers can file a complaint with the State Attorney General's office. They have the authority to investigate and take legal action against businesses that violate consumer protection laws.
  • Class Action Lawsuit: If multiple consumers have been affected by the store's actions, they may consider joining forces to file a class action lawsuit. This allows a group of consumers with similar claims to seek compensation collectively. Consulting with a consumer protection attorney can help determine if a class action is feasible and appropriate in the given situation.
  • Bankruptcy Proceedings: If the store has filed for bankruptcy, consumers may be able to participate in the bankruptcy proceedings as creditors. However, in most cases, consumer claims are prioritized lower than secured creditors and may not receive full compensation.
  • Fraudulent Conveyance Claims: If evidence suggests that the store's owners transferred assets or funds to avoid creditors, consumers might have a fraudulent conveyance claim. This would involve alleging the owners wrongfully transferred assets intending to hinder or defraud creditors.
  • Insurance Coverage: Depending on the circumstances, the store's closure might trigger certain insurance policies that could cover consumer claims. For instance, if the store had liability insurance, it might offer coverage for consumer claims arising from its actions. Consult an attorney who can evaluate the situation and explore available legal options. An attorney will be familiar with the state's consumer protection laws and can guide the consumer through seeking restitution or compensation.

It's important to act promptly when dealing with a store that is no longer in business, as statutes of limitations may apply, limiting the time frame within which legal action can be taken. 

Key Takeaways 

You must perform your due diligence. That advice works for some poor-performing stores not going out of business and those that will.

Check reviews, call the company a few times during the day, meet with the salesperson, and ask a few questions. Call and see the responsiveness.

Don't pay in full and use a bank card; not that it will give you tons of protection. Sometimes, the deals are too good to be true. Lastly, be prepared to walk away.

Additional Resources

Download the Yale Appliance Buying Guide covering all topics of appliances. Over 1 million people have read a Yale Guide.

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Steve Sheinkopf

Steve Sheinkopf is the third-generation CEO of Yale Appliance and a lifelong Bostonian. He has over 38 years of experience in the appliance industry, and he is a trusted source of information for consumers on how to buy and repair appliances.

Steve has also been featured in numerous publications, including the New York Times, Consumer Reports, The Boston Globe, Bloomberg Radio, the New York Post, The Wall Street Journal, and Entrepreneur, for his knowledge of how to buy appliances and appliance repair.

Steve is passionate about helping consumers find the best appliances for their needs, and he is always happy to answer questions and provide advice. He is a valuable resource for consumers who are looking for information on appliance buying, repair, and maintenance.

Despite being the worst goalie in history, Steve is a fan of the Bruins and college hockey, loves to read, and is a Peloton biker. The love of his life is his daughter, Sophie.

A Note About Pricing

Pricing on this blog is for reference only and may include time sensitive rebates. We make every attempt to provide accurate pricing at time of publishing. Please call the stores for most accurate price.