Factory Store vs. Outlet: How to Avoid Getting Ripped Off at 9 Stores (2024)

Poor experiences with the quality of some outlet store items made me wonder if I was getting ripped off. Does anyone actually understand the differences between factory store vs. outlet items, anyway?

When I bought two polos at the Banana Republic outlet, I watched them completely deteriorate over the next year. That’s when I discovered that nothing in Banana Republic’s Factory Outlet actually came from the real Banana Republic manufacturer!

Most outlet stores sell mostly — or entirely — made-for-outlet clothing. That means you’re getting a cheaper imitation version of a brand-name product at a steep discount instead of the real thing. Basically, outlet stores see bargain shoppers coming a mile away and take advantage of your desire for higher-quality name brands at lower prices.

So how do you know what you’re actually buying?

I tracked down nine stores selling made-for-outlet wares under their brand names, plus the secrets that help you tell the difference between brand name vs. factory store vs. outlet store items.

Want to save money on real designer names? Download the KCL app for more money-saving tips, deals, and coupons. Or text HACKS to 57299 to get them sent straight to you.

1. Factory store vs. outlet: Only factory stores will have items from the original manufacturer.

What’s the most important thing to understand with the factory store vs. outlet debate? They are not the same thing.

Factory stores generally sell merchandise made only by that brand’s manufacturer, while true outlet stores are often owned by another retailer and will sell items manufactured outside that brand specifically for the outlet store.

In other words, outlets will sell mostly (or all) made-for-outlet items. Outlet malls have become so popular that people often think of them as a tourist attraction for bargain shoppers looking for high-quality brands at lower prices. This has led people to assume that the two store categories — factory and outlet 一 are the same thing, but that’s a mistake.

TIP: Factory stores have existed since the 1930s to sell slightly damaged or excess items at a lower price. Shop owners quickly realized customers were willing to purchase lower-quality items, just because of the brand name on the tag. Retailers saw these factory stores as an opportunity to capitalize on their brand, which gave us the outlet industry.

2. Outlet stores generally sell lower-quality items made specifically for outlets.

If you know you’re paying a bargain price for a lower-quality item, then by all means, keep shopping at your favorite outlets.

But if you’re only looking to purchase true high-quality branded items at a lower price, you need to know what to look for before making a purchase, which I’ll explain next.

3. Coach Outlets sell made-for-outlet bags — unless you see the authentic Coach stamp on them.

Coach Outlets don’t technically sell fake bags, but they do sell lower-quality, made-for-outlet items. In fact, Coach estimates that 85% of their Coach outlet-store merchandise was made for outlets.

True Coach bags have a special stamp on them that indicates they would never get sold at a Coach Outlet. But Coach Factory Outlet bags will have a little bullseye stamped on the interior leather tag. The paper tag on made-for-outlet bags will also have an “F,” which stands for Factory, followed by a dash and then the serial number.

Running across an authentic, stamped bag at a Coach Outlet is rare. You have a higher chance of getting a true Coach bag on sale from Coach or Nordstrom than you do in finding a true, high-quality Coach handbag at an outlet.

Related: We can teach you the ways to save on authentic Coach bags.

4. Three diamonds on Banana Republic tags indicate factory outlet items.

Banana Republic doesn’t sell any retail items in their outlets, so you can just assume everything you find at a Banana Republic Outlet has been made specifically for the outlet store (and probably of lesser quality).

When it comes to spotting the made-for-outlet items, just look for three diamonds on the tag. The three diamonds below “Banana Republic” on the tag indicate the item will never pop up in a real Banana Republic store.

Related: If you love Banana Republic but hate the regular prices, check out our top Banana Republic hacks to save.

5. Three squares on Gap tags identify Gap outlet store items.

Banana Republic and Gap are owned by the same parent company, so it’s no surprise that their outlet items are marked in a similar way.

Like Banana Republic, everything at a Gap outlet is made for them and never featured in the main Gap store.

These lower-end pieces are easy to spot since they have three squares underneath the brand name on the label. Real Gap items don’t have these squares at all.

Related: Learn more Gap secrets from a seasoned employee.

6. Shop for deals at Nike Clearance stores instead of Nike Outlets.

Nike Clearance stores are an entirely different beast compared to Nike Outlet stores.

Nike Clearance stores are full of real-deal merchandise, including excess inventory and items from past seasons. But Nike Outlets are full of mostly made-for-outlet products, which means lower quality, plus some items that didn’t meet manufacturing standards.

If you have both types of Nike stores in your town, skip the Nike Outlet entirely and head straight for the Nike Clearance store. You’ll get higher quality items at outlet prices.

7. Kate Spade bags with a hollowed-out spade logo indicate that they were made for the outlet.

Kate Spade sells made-for-outlet bags in two places: at Kate Spade Outlets and in the popular Kate Spade Surprise Sales.

Whether you’re visiting an outlet or shopping their online-only surprise sale, it’s important that you know how to spot the high-quality Kate Spade products.

Look for these details on items and tags to know if you’re buying a true Kate Spade boutique bag or just a made-for-the-outlet bag:

• Kate Spade Outlet clothing items will have an embroidered spade above the label name, and the tag stitching will be greenish instead of gold. Price tags show “like style” and “our price” comparisons, which do not represent a real discount.
• Kate Spade Outlet bags and wallets will have a few different logos like a square with a hollowed-out spade in the middle or a stamped spade. On legit boutique Kate Spade bags and wallets, the spade logo is attached as hardware with just the shape of the spade (no bordering square).

TIP: If you do purchase an item from an outlet store, be sure to give them your name and email so you can get the same one-year warranty as you’d get on items from their retail stores.

8. “Lauren” and “Chaps” are the lower-quality Ralph Lauren outlet items.

Polo Ralph Lauren outlets carry mostly made-for-outlet merchandise. The Chaps, Lauren by Ralph Lauren, and Polo Ralph Lauren brands are lower-end clothing lines and turn up most frequently in outlet stores. However, they can also show up at high-end department stores like Dillards, but at a lower price point.

Major tip-offs for cheaper imitations include comparison pricing that mentions “Value was” or “Our Price” (printed on the original paper tag) and the absence of an embroidered care label.

Authentic Ralph Lauren pieces will all carry an embroidered factory number, usually starting with RN, on the underside of the size label.

Keep an eye out for “Purple Label,” “Black Label,” and “RRL” brand items at outlets to score around 75% off legit Ralph Lauren merchandise.

9. Brooks Brothers tags with a “346” let you know it’s made for the outlet.

Brooks Brothers Outlets mostly carry made-for-outlet wares, but these items are easy to spot. Just look for the number “346” on the label — that means they made it for the outlet.

Some Brooks Brothers outlets only stock 346 items, but if you spy any pieces with “1818” or “Golden Fleece” on the label, you’ve found a gem from one of their main, higher-end lines.

10. Two diamonds on a J.Crew tag means it’s a J.Crew outlet item.

J.Crew outlet stores sell a cheaper outlet line called J.Crew Mercantile. But you should also keep an eye out for two diamonds under the “R” on the tag. Similarly to Banana Republic and Gap, these diamonds indicate made-for-outlet wares.

Another tip-off you’ll see on J.Crew blazers: The sleeve buttons on J.Crew outlet jackets are decorative and do not function — not so with regular J.Crew blazers!

Related: Find out more ways to get J.Crew for less if that’s your style.

11. When you see “Ann Taylor Factory” on labels and price tags, it’s an outlet item.

Ann Taylor and Ann Taylor Loft outlets carry mostly — or entirely — made-for-outlet clothing. On Ann Taylor and Ann Taylor Loft pieces, look for “Factory” to appear underneath the brand name.

On older or secondhand Ann Taylor and Loft pieces, look for two squares or dots underneath the label on the tag. These signify the cheaper outlet imitations.

Related: Just make sure you know how to shop at Loft like a pro, and you’ll always know you got the best deal.