Advertisements

Home improvement do-it-yourselfers will have one less hardware store to frequent. Lowe’s announced today that it is shutting down their Orchard Supply Hardware (OSH) subsidiary by February 2019.  If you have a gift card you want to use, an item to return, or want to get a head start on the liquidation sale, here’s what you need to know.

Gift Cards

“All stores will continue accepting gift cards and merchandise credits in stores; however, we will not be issuing new gift cards,” said Lowes Spokeswoman, Jaclyn Hartzell.

Returns

Merchandise purchased prior to the store closing sales, which will begin on [Thursday] Aug. 23, may be returned to stores through Sept. 5,” said Hartzell.

Liquidation Sale

The historic west coast hardware retailer says their stores will be operating as normal today. Starting tomorrow, August 23, OSH will begin its liquidation sale.

“During the store closing sales, all sales will be final and receipt will be marked “Final Sale,” said Hartzell. “The liquidation will be handled by Hilco Merchant Services.”

As 2MF has covered before, you’ll need to go into liquidation sales with your eyes wide open. While we don’t know the specific about the OSH liquidation sale, it will probably resemble other sales Hilco has handled previously.

Items will likely be marked up to full retail or manufacturer suggested retail price. Then a small discount to start; like 30%. Every few weeks or so, Hilco will likely increase the discount in 10% increments until either all the inventory and fixtures are sold or they reach the end of OSH’s fiscal year (February 2018).

For some context, Hilco and its competitor, Gordon Brothers, are well known for being the go-to liquidation specialists. They help companies like OSH with how to close down the stores or they’ll actually buy the inventory themselves.

While we don’t have any indication which is the case here, it’s likely that Hilco is assisting in the shutdown rather than buying out the inventory. That’s because OSH will be honoring their gift cards.  It’s also likely that Lowe’s will absorb any left-over inventory after the liquidation sale is over.

All of this means that the liquidation discounts may not be as aggressive as you may have seen when other retailer shut downs.

Future of OSH Employees & Associates

“We are working hard to make this transition as smooth as possible for our associates and our customers. We will be retaining our associates through the store closure process and are encouraging them to apply for open roles at Lowe’s stores, where they will receive priority status. Associates will receive job placement assistance, and we will be providing eligibility for severance,” said Hartzell.

Bottom Line

Hurry up and spend those OSH gift cards before you forget about them. And if you have a return, be sure to take them back to the store in a hurry.

Unlike the case with a retailer’s total liquidation or bankruptcy, I would wager that the liquidation sale at OSH will not be as valuable for consumers compared to similar sales. Discounting may not be as aggressive, but at least OSH is still honoring existing returns (for a time) and gift cards.

As with any liquidation sale, a credit card with robust purchase protection benefits is your key to protecting yourself.

If you bought with a defective item from the final sale/liquidation, first, take it back. Most managers are reasonable enough to take an item back if it’s defective or at least let you exchange it. If they won’t accept it, take advantage of the extended warranty benefits on your credit card. Just beware that the benefits administrator may not honor the item because of it’s “Final Sale” nature. Just check the card’s terms and conditions for more information.

If you want to buy an item from the final sale/liquidation and not sure if you’ll like it, be sure to use a credit card that offers return protection.

If you buy an item and you’re worried that you’ll find it for sale at a lower price somewhere else, be sure you use a credit card that offers price protection.

Personally speaking, the closure of OSH is a sad end for a retailer that got its start as a co-op in San Jose, Calif. It has been my go-to hardware store for many years, thanks to the knowledgeable associates that can help you figure out how to accomplish a home improvement project.

The biggest loss will be for its associates.  It sounds like they’ll be room for associates to work at the parent company, Lowes. Let’s hope they can all be accommodated there.

(Featured photo credit: “DSC28613, OSH Orchard Supply Hardware, Sunnyvale, CA” by Jim G is licensed under CC BY 2.0.)

Advertisements

Become Money Smart!

Sign up to hear the latest news and advice from 2MF about your money.