5 things not to buy at dollar stores -Bargain basements need to balance brand recognition with price

By Quentin Fottrell, MarketWatch

Bloomberg

Dollar Tree’s (NASDAQ:DLTR)  announcement that it will buy Family Dollar Stores (NYSE:FDO)  for $8.5 billion shows that while dollar stores were once an afterthought in the retail industry, they have become an increasingly important player — for investors and consumers.

Big box discount retailers and so-called dollar stores (which are known for deep discounts but do price some items at more than $1), have been battling for years. Target Corp. (NYSE:TGT)  , Wal-Mart (NYSE:WMT)  and even Walgreen (NYSE:WAG)   have experimented with their own take on the dollar format.

With so many players slugging it out for customers, it’s hard to know where to find the best deals. MarketWatch spoke to retail experts, who advised choosing wisely on everything from vitamins to spatulas and paper towels and sunglasses.

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“When I shop at the dollar store, I stick to greeting cards, party supplies, movie snacks, puzzle books and seasonal décor,” says Kendal Perez, blogger for HassleFreeSavings.com. Light artificial maple syrup is a good buy, adds Edgar Dworsky, founder of ConsumerWorld.org. Bleach toilet tablets, alas, were hit and miss, he adds. When it comes to extension cords or power strips, always check for the “UL” international safety certification label, Perez says, while zinc-carbon heavy duty batteries don’t always have as much stored energy as name-brand or lithium batteries.

“There are often coupons available for the dollar store,” says Andrea Woroch, consumer savings expert with Kinoli, an online marketing firm based in Windsor, Colo. Check out the company’s own websites and apps such as CouponSherpa.com’s free mobile coupon app for online deals, she says. But dollar stores often don’t stock the best-known brands and some items need close inspection.

Here are five other items that may not be the best choice at a dollar store:

Bath towels

“Avoid bath towels,” says Brent Shelton, spokesman for deal site FatWallet.com. The brands in the discount stores tend to fade, shrink and curl faster than higher priced towels, he says. “Even the crazy towel deals from the big box retailers on Black Friday are a risk for getting quality towels,” he says. “Hold out for January White Sales when stores like Macy’s (NYSE:M)   move quality inventory at discount prices. In fact, a recent survey by TheSweetHome.com rated the 1888 Mills Luxury cotton bath towel ($19.99 on Amazon.com (NASDAQ:AMZN)  ) as No. 1 out of 10 tested based on price, drying time, absorbency and durability, and rated WestPoint Home’s Lasting Color No. 1 in the budget category ($5.99 at Bed Bath & Beyond (NASDAQ:BBBY)  ).

Children’s toys

A lot of toys that end up on shelves at dollar stores are from the last season or toys that didn’t sell so well in places like Toys “R” Us, says Christopher Byrne, content director of TimeToPlayMag.com. Water blasters from lesser known brands may be prone to leaking, lose power and are frustrating to play with, he says. After testing bubble solutions, he recommends two brands — Gazillion Bubbles and Imperial’s Miracle Super Bubbles. Dollar stores do have some good deals and often some decent quality stuff from established brands, he says, “but if you’re buying at a dollar store, your expectations should be in line with what you’re spending. Definitely stock up on small toys that are good for birthday party favors.” Be careful when buying toys anywhere, especially if it’s a brand or type you don’t recognize. They could be poor quality or pose safety hazards.

Shampoo and conditioner

Although these may seem like a good deal, dollar stores’ shampoo and conditioner selection is limited to just a few lesser known brands, Woroch says. “I’ve found the same product at Wal-Mart for less.” You are better off buying your hair-cleaning products at Target or Wal-Mart where you have a larger selection of brands and cheaper prices, especially since there is always one or two on sale plus coupons available,” she adds. Dollar Tree sells Silkience, Alberto V05, Hair & Scalp and Salon Selectives shampoos and conditioners at a unit price of $1 per bottle (as part of a 12-bottle case). Good Housekeeping rates Pantene Pro-V as the best overall hair thickener shampoo ($4.50 at Walgreens).

Food and drinks

While dollar stores obviously have bargain basement prices, soft drinks are often cheaper when they’re on sale or sold in bulk at grocery and big-box stores, says Jeff Yeager, author of “ The Ultimate Cheapskate’s Road Map to True Riches .” Dollar stores are not the place you’re likely to find San Pellegrino or Snapple. Dollar Tree has soft drinks like Shasta Cola and Stars & Stripes Cola ($1 per bottle as part of six-bottle case). Dollar stores typically sell frozen and tinned food rather than fresh fruit and vegetables, and they’re often obscure brands and packaged in small amounts for the $1 per unit deal, adds Holly Johnson, owner of ClubThrifty.com. A package of Oreo cookies (14.3 ounces), for example, costs $3.50 at Deals, which is owned by Dollar Tree, but sells for $2.98 at Wal-Mart.

Back-to-school items

Dollar Tree does have the pricing edge on some items like athletic socks and backpacks, says Will McKitterick, a retail analyst at firm IBISWorld, but buying in bulk is often cheaper at Wal-Mart. What’s more, Wal-Mart has a pricing policy that guarantees they will match any advertised price from any local store as long as it’s an identical item and the ad clearly states the price. Some instances where Wal-Mart beats out dollar store prices: A three-ring binder costs $1.91 at Wal-Mart, but $2 at Deals, 4-ounce glue (34 cents at Wal-Mart, $1 at Dollar Tree), and a 64-package of crayons costs $2.84 at Wal-Mart and $3.50 at Deals (if customers buy a minimum quantity of 12 packets).