Clark Howard's Tips

Sept. 17, 2008

Businesses that follow the housing market -- such as furniture, appliance and mattress retailers -- are on the ropes as the market continues to reel. The Washington Post now reports that a regional mattress company called Mattress Discounters has filed for bankruptcy -- for the second time!

Clark recalls when Mattress Discounters first went bankrupt about 6 years ago. At that time, they were able to re-organize and got a second shot at life. Now they're looking to close some stores with the intention of re-organizing again for a third life!

The latest collapse of Mattress Discounters highlights an important point about buying furniture, mattresses or appliances. If you're going to pay a deposit up-front and take delivery later, you never want to pay by cash or check. Why? If the retailer collapses before delivering your goods, you'll be an unsecured creditor in a bankruptcy filing and you'll probably never see a penny of your deposit back.

You should only pay by credit card -- not a fake piece of trash Visa or MasterCard debit card -- so you can dispute the charge within 60 days if you don't get your merchandise. But beware, go one day over the 60-day limit and you'll lose your rights to dispute. Clark advises you start your dispute around the 55th day. You can always release the dispute if the goods show up.

In his TV work, Clark has done at least 10 stories standing in front of vacant furniture stores with the camera panning from empty wall to empty wall. It's always the same story: He interviews some poor soul who talks about how much money they lost on deposit. Don't be Clark's next interviewee; make sure you pay by credit card!

Consumer advice courtesy of