Sunday, October 6, 2019

How to Provide Macy's a Fully Collateralized Loan and Earn 60% Per Annum Plus

By Robert Wenzel

Forget earning around 2% in a one year CD, here is how you can book some serious return for some of your cash---100% protected.

It's the change of season and that means Macy's and other retailers have to get rid of summer stock and fast.

Short-sleeve polo shirts, boom they have to go.

White pants, boom they have to go.

Lightweight suits, sports jackets, bathing suits, they must go. It doesn't stop.

It just costs too much for Macy's and other retailers to pack and store seasonal items, especially when you consider they can mark the stuff down to cost, get rid of it, and use the cash to buy more winter items.

And so, you can often see markdowns of 60% or more at season changes. I took the pics above yesterday in the Macy's in downtown San Francisco.

Now in season, it is possible that these items may have been marked down by 15%, 20% or even 30% but not more--and you should always wait to buy from a large retailer when things go on sale. And everything goes on sale multiple times a year in season.

But the real trick is to buy off-season, when retailers have serious incentives to move product. That's when you get the additional discounts of 30% or more.

It's true, you won't use the items until Spring (March 19, 2020) the earliest and that's more than 5 months away but if you wait to buy at that time, you are not going to get the 60% plus discounts, max 30%.

So if you are getting something now at an additional 30% discount that you won't use for at least 5 months and "locking the money up" for five months, you are really getting an annualized return of 60% plus by buying now.

That is: Would you rather put the money in a money market fund and earn 2% until you buy your Spring clothes in March 2020 or buy them now at an added 30% discount?

It is really no different than loaning Macy's money at a 60% annualized rate with just about the best collateral in the world, the clothes that will eventually end up on your back. 

This, of course, applies to every season and key holidays. The best time to buy Christmas cards, ornaments and wrapping paper, for example, is right after Christmas.

Robert Wenzel is Editor & Publisher of EconomicPolicyJournal.comand Target Liberty. He also writes EPJ Daily Alert and is author of The Fed Flunks: My Speech at the New York Federal Reserve Bankand most recently Foundations of Private Property Society Theory: Anarchism for the Civilized Person Follow him on twitter:@wenzeleconomics and on LinkedIn. His youtube series is here: Robert Wenzel Talks Economics. More about Wenzel here.


  1. Wait, spring in March? You mean May 15th or so, right?
    We always buy stuff that way(8 kids), but not with as much thinking as you just put into it for us, which makes me even happier that we do.

  2. I always love a good sale. Besides, most of the stuff it not worth the retail price when it comes to long term use and durability.

  3. The wife was clothed by Neiman Marcus here whole life, buying the clothes for next to nothing that were for the season ending.

    I used some expensive retailers and really good clothes when seasons changed. I don't recall ever getting a discount on a Stetson though.

  4. I usually buy short sleeved shirts with button down collars to wear. If I wait until around Labor Day, I get them for almost nothing (relatively speaking). Shirts that normally sell for $50, I've picked up for $9.