From health care to groceries, haggling is hot. A recent survey by the American Research Group found that 72 percent of consumers report recently trying to negotiate a lower deal on retail products other than cars, and that 80 percent of these attempts were successful [source: TIME]. But haggling isn't always easy. "It's very hard to walk into a store, see something on a shelf, and haggle over it," says Rick Doble, author of the book "Cheaper: Insider's Tips for Saving on Everything." Instead, it pays to do your homework inside the store and out.
First, think about a seller's motivation to discount -- supply, demand and deadline being high on the list. In other words, look for an item or service that no one's buying and that the seller would like to get rid of. Is it going to spoil? Is it taking up needed space? Would paying any amount for the item or service give the sellers more than they would otherwise get?
Then apply the rules of haggling success, developed by Teri Gault, CEO and founder of thegrocerygame.com:
- Be polite and positive.
- Deal with the store manager or someone who has the power to adjust prices.
- Go during a quiet time.
- Do your homework so you know beforehand what a good deal is.
- Offer lower than what you expect to pay, and be willing to walk away.
Specific items require specific haggling techniques. Keep reading to learn how to haggle your way to savings, even on items whose prices seem set in stone.
Haggling on a car is not unusual. But what about the tires?
There are three things that make tires an especially nice target for haggling: wide availability of the same product, inconsistent markup and the presence of extras and services that aren't included in the asking price. First, a set of tires selling for $700 at one store might sell for $500 down the street and $450 online. Do your homework, and even print out an Internet price. Then be up front with the store of your choice about the prices you've seen elsewhere, and ask if they'll match the lowest price.
So far, this is simply comparison shopping on an item with high store-to-store price variation. But the art of haggling sometimes lies in the extras. Getting a new set of tires from the store to your car requires mounting, balancing, stems and possibly a disposal fee for your old tires. Will the dealer cover these fees? What about an extended warranty?
To bargain for extras, try sticking with the comparison-shopping approach you started with -- find out what extras other shops are willing to include, and then ask the shop of your choice to match them. Note that these extras (and shipping) can make buying tires in person cheaper overall than that rock-bottom price you found online.
There are two places to haggle for lobster: the front end and the back end. The back end is obvious -- if you can find lobster nearing its expiration, you've found a ripe deal (no pun intended). Spoiled shellfish isn't worth its space in a dumpster, so feel free to offer a rock bottom price.
That said, if shellfish of questionable freshness isn't your thing, consider going to the front end. The Maine newspaper "Working Waterfront" describes the markup on lobster, from the first buyer at the dock, to the trucker who transports it, to a large wholesaler who grades it, to a small wholesaler who sells to markets, and finally, to markets that mark it up to the price you see on shelves. Each step adds to the cost.
If you can't walk onto a dock and offer to buy your lobster straight off the boat, try going online to get as close to the dock as possible. When searching for a seller, include "coop" in your search terms, which will lead you to fishermen cooperatives that sell direct from the boat. If you can figure out how many steps removed the company is from a lobster pot, you can figure out how much to offer.
But even a break-even price on lobster is dependent on finding someone willing to pay it. Lobster is a luxury item, and in tough economic times, people simply don't buy. So anywhere in the markup chain, you may find desperate sellers looking to unload lobster at any price, even if it means selling for a loss.
"Most people don't realize they can bargain for jewelry, but they really should," Gault says. The same is true of clothing and accessories. This is because, after taking into account the base price of diamonds or materials, much of an item's price is due to the idea of what's in style at the moment. So basically, the asking price of jewelry is largely an opinion.
In a jewelry store, Gault suggests finding two items you like. Start by haggling on one item until reaching a final price. "Then make the salesperson think you're switching to the other one," she says. Once you've negotiated two independent, rock-bottom prices, ask the salesperson for an additional discount if you buy both.
In a department store, ask about discount cards. "I went to Nordstrom's to buy my wife a Valentine's Day gift, and I picked up a store credit card worth 15 percent off my first purchase," says Herb Cohen, author of the book "You Can Negotiate Anything." He also recommends offering to pay in cash instead of using a credit card, for which merchants have to cover a transaction fee. On a $1,000 tab of clothing and jewelry, these percentages add up.
Once the boat sails, any empty room is money lost, especially when you consider that room cost is only a portion of the money a cruise hopes to make from a customer. Even if you pay nothing to stay and eat, the cruise hopes you'll spend money on drinks, onboard shopping, on-island tours, extras like photo processing and, most especially, in the casino.
So, as sailing times near, haggling gets more productive. Ideally, you'd show up at the dock with your bags packed. Barring that, it's worth asking a phone operator for last-minute deals. Then be aware of the extras. Start by asking for a free room upgrade -- putting you in an empty window room costs the cruise line no more than putting you in the ship's interior. Then ask if the price includes a certain amount of onboard spending, coupons, tours, etc. Tacking extras onto the purchase price can turn a good deal into a great one.
The techniques for haggling over the prices of large appliances also apply to most big-ticket items you might find in a showroom, including mattresses, furniture or home fixtures. Start by exploring the floor. Can you find blemishes? Even if you can't, consider the fact that eventually, everything in the store will be on sale. Work your way up to a manager and ask him or her to give you a sale price now. Generally, new models arrive in February, so you might find extra wiggle room in January as stores try to clear space. Or make an offer on a floor model.
In some situations, like buying a car or a house, you might also find quota and commission on your side. If a salesperson has to meet a quota by a certain deadline, he may be more willing to work with you. And commission means that your $200 savings may only cost the salesperson $10, so he'll still earn a hefty chunk on the sale. If negotiations come to a stalemate, you might try giving the salesperson your card instead of taking his. Then, when a quota comes around, or if the salesperson is looking for a quick commission, he may give you a call to make a quick deal.
Any time there's a contract, there's room for negotiation, especially when the contract is for a menu of services over time. And like any contract, it's worth reading the fine print. What exactly are the benefits offered in a nursing home or assisted living contract, and what could they be if you asked? Try talking your way into increased benefits for the same price.
Like long-term contracts for cell phones, cable and internet, you might find a discount for monthly direct withdrawal from your bank account, for locking in a long-term contract or for bundling services. Similar to a cruise, a nursing home that sails along with empty beds is throwing away money. In a nursing home with low occupancy, you might find more room for a deal. In one recent case, a Florida woman successfully haggled to cut her father's $3,875 monthly room cost in half [source: TIME].
Economists have shown that people overestimate the amount they will use an annual gym membership by an average of 70 percent [source: DellaVigna & Malmendier]. Assuming you're paying based on how much you think you'll use a gym, you're overpaying by the same 70 percent. It costs the gym very little to add a new member, and a gym membership is a long-term contract with lots of options. As with buying a new appliance, the fact that gyms run specials opens the door to exploring discounts at any time of year.
First, start by being honest with yourself. How much will you really use the gym? Then figure out how much each workout is worth to you. If you can't haggle the price of a monthly membership down to that amount, consider a pay-as-you-go card, or look into buying home gym equipment (both of which are negotiable!).
Unless you can find hidden discount codes, you're unlikely to change the price of tea on the shelf. But experts Rick Doble, Herb Cohen and Teri Gault all point to three places in the grocery store where you can bargain your way to savings: the meat and bakery sections, and anywhere there's already a clearance.
First, in the meat and bakery sections, sellers are working under the gun. If they don't get rid of an item before it expires, it goes in the dumpster out back. This is especially true in the bakery section, where shelf life might be only a matter of hours. This is why many bakeries and grocery stores already have sections for day-old baked goods. At the end of a workday, consider offering the day-old price for any baked good that would be discounted in the morning anyway. The same is true of meat and seafood (or anything else near expiration).
This works even better if you're willing to buy in bulk. "In the closeout section, look for 10 or 20 items of the same thing," Doble says. "You can almost always negotiate a lower discount."
When you see rent quoted on Craigslist, in the paper or on a community message board, it's just that: a quote. This is the landlord equivalent of a buy-it-now price on eBay -- the top end of what you could pay for the space.
And like on eBay, whether or not you pay the buy-it-now price depends greatly on supply and demand. Simply, how much housing is available and how many people want it? Every month an apartment sits vacant costs the landlord a significant amount of money, so by recognizing a rental without a long line of prospects lining up at the door, you immediately bargain from a position of power. Consider making an offer at the end of a month, with the ability to move in immediately. On the flip side, if you're renegotiating an existing lease, do so well before the lease is up so that both you and your landlord know that you have time to find another place if negotiations don't go your way.
Then consider the fact that by stating a price, the landlord offers this price to anyone who meets the rental criteria. If you have references showing that you're a clean, responsible renter, that may be worth a cost reduction.
Take a look at your next medical bill. Most show a breakdown of the prices the hospital charges for services alongside the "negotiated prices" that your insurance company agrees to pay. That's right: By having health insurance, you hire someone to do your haggling for you.
But that doesn't mean you can't do it yourself. Like shopping for a pair of tires, you can comparison shop for medical care. Before scheduling a procedure, check sites like HealthCareBlueBook.com to see the going rate. Then (and this is the step medical consumers so frequently forget is possible), ask your provider what they charge. If it seems high, shop around.
Remember: Due to the expected haggling of insurance companies, hospitals are used to receiving a final amount that's much lower than the quoted price. Open your bidding very low. This also means that in hospital haggling, cash is your friend. Offering to pay cash up front not only removes the hospital's paperwork headache, but also locks in a price. When CBS News tried to bargain with 16 healthcare providers nationwide, only one refused to play ball, and bargains included reducing a knee MRI from $1,800 to $600 and cutting the cost of a mammogram by 60 percent.
Read on for links to more great tips on haggling and negotiation.
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- CBS News. "Haggle your way to lower health care bills." July 7, 2010. (Oct. 20,2010) http://www.cbsnews.com/stories/2010/07/07/earlyshow/contributors/susankoeppen/main6654097.shtml
- Cohen, Herb. Author of "You Can Negotiate Anything." Personal interview. Oct. 16, 2010.
- Dinsmore, Sandra. "Deciphering mysterious world of lobster pricing." Working Waterfront. Sept. 2008. (Oct. 20, 2010) http://www.workingwaterfront.com/articles/Deciphering-mysterious-world-of-lobster-pricing/12621/
- Doble, Rick. Author of "Cheaper: Insider's Tips for Saving on Everything." Personal interview. (Oct. 15, 2010)
- Gault, Teri. Founder and CEO of thegrocerygame.com. Personal interview. (Oct. 16, 2010)
- Gregory, Sean. "In the Recession, Shoppers are Becoming Hagglers." TIME. Aug. 10, 2009. (Oct. 11, 2010)http://www.time.com/time/magazine/article/0,9171,1913774,00.html
- Kadlec, Dan. "Recession Shopping: 10 Things to Buy Right Now." TIME. April 16, 2009. (Oct. 11, 2010)http://www.time.com/time/specials/packages/article/0,28804,1891519_1891520,00.html
- Myers, Marc. "Haggle Like a Pro: 5 Lines that Work." Reader's Digest. June 2005. (Oct. 11, 2010)http://www.rd.com/home-garden/how-to-haggle-like-a-pro/article15096.html
- Ritter, Bill. "Haggling 101: Finding Hidden Deals." ABC News. April 11, 2008. (Oct. 11, 2010)http://abcnews.go.com/Business/story?id=4610552&page=1
- Rosenwald, Michael. "In tough economic times, shoppers take haggling to new heights." Washington Post. Jan. 31, 2010. (Oct. 11, 2010)http://www.washingtonpost.com/wp-dyn/content/article/2010/01/28/AR2010012803512.html
- VandeBerg, James. "Looking for a lease: Learn how to haggle." Daily Illini. Feb. 10, 2009. (Oct. 20, 2010) http://www.dailyillini.com/special/spring-housing-guide-2009/2009/02/10/looking-for-a-lease-learn-how-to-haggle
- Vander Broek, Anna. "How to negotiate your rent." Forbes.com. April 21, 2009. (Oct. 20, 2010) http://www.forbes.com/2009/04/21/pay-less-rent-personal-finance-young-money-landlord-tenant.html