On haggling

2009-02-17

in Daily updates, Economics

Apparently, while the economy remains in the doldrums, haggling is on the up-and-up. The Economist reports that the proportion of American consumers who have used the tactic during the past four months is at 72%, compared with 56% last year. Key places to haggle include hotels, clothing stores, and electronics shops.

On XUP’s blog, an introductory guide to haggling was recently posted. It’s something I could probably make use of myself, given the very limited extent to which I engage in the practice. The only recent occurrence I can think of was when I negotiated a modest discount on a package of photo gear, purchased at Henry’s.

New economic times bring with them the need for different skills. The fact that haggling is increasingly among them is an indication of the continuing level of financial uncertainty in the world.

If any readers have haggling stories or tips, they would be appreciated. Have any house or flat renters been able to talk down their monthy payments, on the basis of falling housing prices and rents across the economy as a whole?

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{ 3 comments… read them below or add one }

Tristan February 19, 2009 at 12:33 am

I like haggling, it’s a very pure economic exercise about finding the margin.

“I’ll give you X, take it or leave it” – the merchant is forced to make a decision about whether the item is worth selling at that price, taking into account the opportunity cost (which includes the possible cost of others knowing they can haggle).

Unfortunately, it’s quite difficult to haggle at retail stores. No matter, I don’t shop at retail stores. Retail stores are a total unmitigated disaster, and will soon be replaced entirely by the internet. Which, since it is a much more pure arena for competition, is less in need of haggling.

oleh February 19, 2009 at 3:21 pm

I do not know how much I “haggle”. However, I do have discussions with merchants which result in better terms of purchase. I do so about once a month.

I have felt a sense of satisfaction and enjoyment when I have talked with a merchant about adding something more to a sale or reducing the cost for such particular reason. Part of the enjoyment is the dialogue and the connection with the person.

I avoid the take it or leave it as an approach as it can simply end the dialogue. The take it or leave it approach would box me into a corner. If I was prepared to pay the price the merchant proposes and I make an offer on a take it or leave basis, I may for reasons of ego feel constrained to accept the earlier offer. Also if the merchant does move, but not to my take it or leave it position, that either ends the dialogue or I have to rescind from that earlier position.

I have found that that what also works is
1. having this discussion with the manager or with someone with discretion or authority
2. having this discussion in a quiet moment or area after having established a connection with the person with whom I am dealing.

For example recently, last week the manager at Coast Mountain agreed to a $30 reduction in trail shoes after I openly told him that I prefer the more expensive ones but was drawn to the other model which was $30 cheaper.

On the other hand my effort this month to obtain a reduction on membership at Fitness World was unsuccessful and part of the reason I have not joined this already low cost fitness facility is that my efforts at getting a better deal were unsuccessful. The key here was the lack of authority to negotiate by the person with whom I was dealing.

I do not see being able to have nearly as much enjoyment on the internet.

I am somewhat surprised that this entry has not generated more comments. Perhaps we are just shy. I would like to hear the experiences of others.

Milan February 20, 2009 at 1:04 pm

Apparently, it is even possible for people entering government jobs to negotiate their salaries upwards on the basis of ‘asset qualifications’ like master’s degrees.

At least, one friend of mine has done so.

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