Haggling Is a Lost Art in the U.S. - Or Is It Just Evolving?
Whether you're buying a rug in Turkey, a watch in China, or a bottle of Coca-Cola in Egypt, haggling is a common part of economy life around the world. It can be exhausting haggling over every soda, but it's a skill that's nearly ubiquitous in many foreign lands -- and one that would really come in handy with bigger purchases here.
In China, for example, it's common for merchants to hand a customer a calculator and ask how much they're willing to pay, says Douglas Olsen, an associate professor at the W.P. Carey School of Business at Arizona State University.
In the U.S., however, haggling is becoming a lost art on mid-level and small purchases. On big ticket items where you're either dealing directly with an owner (such as a home seller) or a highly empowered representative (such as a car salesperson), haggling is expected.
But walking into a business and negotiating a price is becoming less feasible, partly because you're less likely to know the owner, and partly because salespeople at retail chains face prices set by faceless corporations that are unlikely to give them room to yield much on price. "It's easier for them to lose business for their company than to lose their job," Olsen says on the subject of employees who are unable to negotiate with customers.
Internet and Apps Replacing Haggling
But comparing prices online is becoming common, which can give consumers room to deal, says Mitchell Weiss, an adjunct professor of finance at the University of Hartford Barney School of Business in West Hartford, Connecticut. "The Internet has taken the place of haggling," Weiss says.
Showing a store manager a competitor's price on a smartphone is now easy. That can be great for consumers, though less so for the brick-and-mortar stores that can't compete when comparison shoppers decide to buy online. Did you ever go into a Barnes and Noble (BKS) and look up Amazon's (AMZN) price of a book in your hand? If your local bookstore is out of business, you can at least partly blame this modern method of haggling.
Some retailers will match Internet prices, which is what got Olsen to check Amazon's prices on his cellphone when he needed a new valve for his pool.
The valve was $93 in the pool supply store and $39 online, but no store manager was available to make a decision on matching the price. He bought it online, knowing he'd have to wait at least a few days for delivery vs. getting it immediately. Realizing that they can't compete on price alone, some stores are focusing on offering better service, Olsen says.
How About Bargaining?
The big potential downside of shoppers comparing prices online is that too much price pressure is putting physical stores out of business. "The vast majority of customers don't think in the long-term," Olsen says. "They think in the short-term."
Some retailers may be put off by haggling, even if it's a request to match an online price, because it can be seen as questioning their judgment and integrity, Olsen says. "Bargaining" has a better connotation, Weiss says, though many people, especially millennials, view it negatively.
Young people may push a friend for a discount, "but it's a whole different thing to go into a store and ask a sales clerk for a better price," says Weiss, who has found millennials in general to be uncomfortable with making eye contact and asking for a better price.
A "have to have it now" mentality, especially among young people, has caused haggling to become non-existent, says Dennis Breier, president of Fairwater Wealth Management in Burr Ridge, Illinois. "The art of haggling is definitely lost," Breier says, "especially among young professionals. Our firm has encountered countless situations where a young person simply walks into a dealership and buys a car in an hour because they simply took the first price the dealer offered."
"We help young people negotiate deals frequently and have to remind them that we don't need to buy now," he says. "We need to buy at the best price."
How to Haggle Successfully
Twenty-five years ago when he was buying school clothes for his children, Weiss would easily spend $500 and would ask for discounts because he was buying so much. He'd regularly get the 10 percent discount employees received.
A mistake people make in negotiating prices is to make an offer and then keep talking, Weiss says. "You ask for what you need and then you shut up. You let them respond."
Meeting on price in the middle, even closer to the shopper's preferred price, has worked in the haggling that Josh Osbun, a 35-year-old communications director in Wyatt, Indiana, has done around the world and in the U.S. Osbun was in a shop in Turkey that sold hand-woven rugs, and he wanted to buy a small one for a friend. He asked what the price was and the shopkeeper told him is was $200. Osbun replied that he was looking in the $100 range, and the owner came back and asked for $125 and Osbun bought it.
When to Haggle
It's a good idea to have a reason behind your request for a lower price, says Edgar Dworsky, owner of ConsumerWorld.org. "If you're going to haggle, you should not just say 'I'm a nice person, can you do better?'" Dworsky says.
In addition to showing a manager better prices elsewhere, it can pay to ask that a just-ended sale be extended, he says. If you're buying multiple items at the same store -- such as a washer and dryer -- ask for a discount. Sears (SHLD) offers 5 to 10 percent off for such multiple purchases, he says.
If something is slightly damaged, ask for a lower price, he says. "You can haggle, even in a department store setting," Dworsky says.
When buying $900 worth of paint for his condominium association at Home Depot (HD), Dworsky asked for a discount because he was buying so much paint, and received a 10 percent discount at the store's courtesy desk.
When Haggling is Expected
Haggling is expected in some transactions, such as at flea markets, antique stores and car sales. It's especially expected at car dealers, though General Motors (GM) tried no-haggle pricing with its Saturn cars -- which didn't work out well in the long run. Haggling by car buyers is expected in part because dealers make up for it by charging for extras, says LeAnn Shattuck, who negotiates car prices for buyers at TheCarChick.com.
"The dealers don't make money on the cars that they sell anymore. They make it everywhere else," Shattuck says. People look at car dealers as the enemy, which only emboldens them to seek a lower price, she says.
%VIRTUAL-pullquote-If you think the art of haggling is dead or is too uncomfortable to try, consider bartering. %"You'd think the straightforward approach would be better," Shattuck says. "People expect to haggle. They don't like to haggle, but they still expect to get a good deal."
If you think the art of haggling is dead or is too uncomfortable to try, consider bartering. Michelle Schroeder, a writer in St. Louis who has a personal finance blog called MakingSenseofCents, says she bartered around $7,000 of her wedding budget in June. They included free DJ services and decorations, plus discounts on wedding planning services and a photo booth.
"I had to put my back into it all, but it was well worth it, and I made some lifelong connections with some of the wedding vendors I used," Schroeder says.
Gaining lifelong connections. If that's what haggling, bargaining, bartering or whatever else you want to call it accomplishes, that seems like a good deal for everyone.
Aaron Crowe is a freelance journalist in the Bay Area who specializes in personal finance.