Dollar stores might not save you the most

updated 4:44 p.m. ET Sept. 3, 2009

NEW YORK - Dollar stores, which now sell everything from beauty products and turtlenecks to peanut butter, soft drinks and ice cream, are increasingly popular and can be rewarding places to shop, but they also can be overwhelming.

Stores that offer most or all of their stock for $1 or less — the modern version of five-and-dimes, where most merchandise went for 10 cents or less — have picked up substantial new business as consumers seek bargains during the recession.

"Dollar stores have been establishing their credibility with a much wider range of brand names and household products," said Wendy Liebmann, chief executive of WSL Strategic Retail.

The stigma has lifted from shopping at chains like Dollar Tree Inc., Dollar General Corp. and Family Dollar Stores Inc., as well as local outlets like Jack's 99 Cent Store in Manhattan, said Cheryl Holland Bridges, director of the Center for Retailing Studies at Texas A&M University.

Customers with more to spend than dollar stores' mainstay low-income shoppers are flocking to them to buy products from Coca-Cola Co., H.J. Heinz Co. and other major manufacturers such as Bugle Boy. Bridges said even shoppers who still buy shoes at luxury department store Neiman Marcus will head to a dollar store for generic items like sponges.

But experts caution that not everything at dollar stores is a deal, and not everything costs $1: This week, Jack's 99 Cent Store was selling Lands' End cotton turtleneck shirts for $4.99 and Haggar corduroy pants for $12.99, both arguably excellent prices. It also had a Cuisinart seven-cup food processor for $99.99, computer cases for $39.99 and king-size 300-thread-count cotton sheet sets from J.C. Penney's Home Collection for $34.99.

Here are some tips on avoiding dollar-store pitfalls:

Beware the fine pint
Watch out for defective and outdated products, particularly food and over-the-counter drugs like aspirin and sunscreen, but also batteries. Many dollar stores buy directly from suppliers, but they also get merchandise from closeout companies. C. Britt Beemer, chairman of America's Research Group, advises shoppers to carefully examine edible products to make sure they are fresh enough to eat.

Shop around beforehand
Beemer says shoppers should know exactly what basic items like cereal cost at other stores before shopping at a dollar store because another store may offer a better deal.

"They can be an excellent value, or they can be no bargain at all," he said.

With a coupon, for instance, your favorite crackers could be cheaper at a local grocery store than the dollar store.

Read price tags
Despite their reassuring names, it's perfectly legal for dollar stores to charge more than $1. So check every price tag.

Stick to a list
Walk in with a list to avoid overspending.

"It's definitely an impulse buying place," Bridges said. "Unless you have a mission, you may be buying some more things that you hadn't planned."

Check store policies
Some dollar stores — including Dollar Tree, according to its Web site — consider all sales final so decide before you buy whether you're comfortable with your store's policies. Dollar Tree says it will exchange unopened items, if you have the original receipt and the items aren't seasonal. But it won't accept outright returns, and it reserves the right to limit quantities an individual consumer can buy.

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