SEO: Redirecting an incoming link to a discontinued product to a very similar product

Question

We run an e-commerce site where products sometimes get discontinued. There are some links from other websites that points to one of our products (A) that doesn't exist anymore, but we have a very similar product (B) that either came out later or replaced the previous discontinued product.

Questions:

1. Is it OK to internally 301-redirect a permanently discontinued product to a similar newer product?

2. How about when there are no comparable products available and we want to save this incoming link? Would a category page work?

I've read some articles and posts and it seems to be OK to do 1, but I want to check with the StackExchange community as well. I also know some e-commerce sites prefer to leave discontinued items on their site in an effort to preserve points earned from them, but we are not doing that for a few reasons, which is irrelevant to the questions asked here.

Some things I read about the topic at hand:

http://moz.com/community/q/401-redirect-to-product-page-or-category

http://ecommerce-blog.nexternal.com/301-302-3-0-who-never-discontinue-a-product-or-category-without-reading-this/

Answer 1

If the page has been deleted then the correct response would be to return a 404/410 status. (and perhaps on a friendly error page, link to similar products)

Returning a code other than 404 or 410 for a non-existent page (or redirecting users to another page, such as the homepage, instead of returning a 404) can be problematic. Such pages are called soft 404s, and can be confusing to both users and search engines.

Redirecting to other pages is not a recommended practise and could end up with your redirects marked as 'soft 404' errors in Webmaster Tools. Examples here and here.

Answer 2

I often redirect pages to something similar or to a category page. Showing users something similar is usually much better for the user than showing an error page. When 301 redirects are used, the search engines can follow the chain and assign value from the old page to something current.

The counter argument would be that a 301 redirect is somewhat deceptive to search engines. A "303 see other" redirect status would be more appropriate than a 301.

You could also argue that a user should see an error message and also the similar product or category listing.

Google sometimes doesn't pass value across redirects if the target is not related to what the original page was about. They have even been known to penalize for egregious cases such as buying lots of old domains and redirecting all the pages to spam. But if the new page is a good replacement from the user's perspective, I don't worry about it.