Going Out of Business Sales

Have you ever noticed how certain retail establishments, according to their signs or their ads, have been “going out of business” for an extended period but still seem to manage to hang on?  If so, it is likely they are violating Georgia’s Fair Business Practices Act (FBPA), O.C.G.A. 10-1-393(b)(24).

This law prohibits conducting a going-out-of-business sale for more than 90 days.   After this time limit has expired, it is against the law to do business in any manner contrary to representations that were made about the nature of the sale.  Excluded from these requirements are:

• Estate sales by an authorized agent of the deceased, according to law or by the provisions of the will;
• Sales of property conveyed by security deed, deed of trust, mortgage or judgment, or ordered to be sold according to the deed, mortgage, judgment or order;
• Sales of all agricultural produce and livestock arising from the labor of the seller or other labor under the seller´s control, on or belonging to the seller´s property, and not purchased or sold for speculation;
• All sales under legal process;
• Sales by a pawnbroker or loan company selling or offering for sale unredeemed pledges of goods, as provided by law; and
• Sales of automobiles by an auctioneer licensed under the laws of the State of Georgia.

In all other business situations, the use of expressions such as “Public Notice,” “Selling Out,” “Inventory Liquidation,” or “Emergency Sale” would be considered unlawful unless such representations are true, advertised for no more than 90 days, and in no respect misleading as to the retailer’s intention to discontinue operation or discontinue or permanently reduce the price of certain merchandise.  Those terms carry the implication that the sale is court-ordered; yet usually the seller is not, in fact, going out of business or liquidating a line or model.

If you have observed a business in apparent violation of the FBPA’s provisions, please inform the Georgia Department of Law's Consumer Protection Division so that we may monitor the situation.

In addition to the requirements of state law, some local jurisdictions (for example, the City of Atlanta) have ordinances regarding going-out-of-business or “continuance” sales and require a permit in order to conduct such a sale.  A complaint about violation of a local ordinance should be directed to the respective city or county.