Price reductions in clearance sales are only allowed in a limited number of cases. These circumstances typically involve situations where a stock or range of products needs to be sold quickly, for example when the seller retires or dies.

During a clearance sale, the company is required to reduce its selling prices and may sell goods at a loss. Only goods that were already part of the company's stock before the start of the clearance sale may be sold.

A clearance sale may last a maximum of five months, except in the case of retirement, where the period can be extended to one year.

Except for clearance sales resulting from a court decision or a disaster, the clearance sale must occur at the point of sale where the goods were originally sold before the sale began.