BETTER BARGAINING

Correction
CORRECTION ON 02/26/08 -- A quote from Peter Reilly, an associate professor at the University of Nevada, Las Vegas’ Boyd law school, in a Tuesday Living story about haggling should have read that asking a salesman about paying a sale price for an item is “a signal that you’re not excited about this price.”

Once, while shopping at one of those big electronics stores, Steve Budin saw a TV set that he liked.

The price tag said the TV would cost $500. But Budin had another idea: He told the sales clerk that he'd buy the floor model for $350.

Long story short: Budin walked out with a TV for $150 less than most of us probably would have paid.

Granted, as a certified financial planner and president of The Budin Group, Budin is more conversant than most of us with the give and take of the marketplace. But the tactic he employed -- haggling, bargaining, negotiating, call it what you will -- is something anybody can do, and with greater success than many consumers might imagine.

Last year, the Consumer Reports National Research Center surveyed more than 2,000 U.S. households about their bargaining habits. Tod Marks, a senior editor at Consumer Reports, said the survey asked respondents about their experiences haggling for such things as furniture, medical care, home electronics, appliances, bank and credit card fees, jewelry, cell phone plans, collectibles and antiques.

According to the survey, more than 90 percent of those who said they haggled scored a lower price on at least one purchase during the previous three years.

According to Marks, the survey also revealed that men were more likely to haggle than women, that women "didn't really like the process as much" as men, and that men and women "were equally successful when they tried negotiating."

Even though 46 percent of respondents said haggling made them uncomfortable, Marks adds, "the beauty of it was, the majority of people who tried haggling were successful."

How successful? Asked for their biggest score, most said they saved $50 or more while, in the case of cell phone plans and medical fees, more than 25 percent of respondents saved at least $100.

If haggling can save consumers money, why don't more of us do it for purchases beyond houses and cars? Embarrassment. Fear of rejection. Maybe even the suspicion that haggling for a better deal would be pointless.

"I just think people are afraid of institutions that seem so much bigger and meaner than they are," Marks says. "I believe there's a real intimidation factor at work." Yet, now is as good a time as any for consumers to reacquaint themselves with the fine art of marketplace negotiation. With a softening economy, "a lot of businesses are in competition for your dollars," Marks says, "and as long as you have options in place -- you can go to alternative shopping venues -- you do have some semblance of power. You're not a victim here."

Haggling is based on a simple economic premise: that, Budin says, the actual value of any object or service is "only what you and I agree it is."

Consumers already are used to negotiating for cars and houses. And, Budin says, "definitely your second-hand places -- if you ever go into a consignment store and see a couch sitting there, those are always negotiable -- and, I know, some of the electronics stores."

But there probably are more opportunities for haggling out there than many consumers imagine.

"Even in a big store, where you think you can't haggle, you can," says Peter Reilly, an associate professor at the University of Nevada, Las Vegas' Boyd Law School and director of negotiation training for the Saltman Center for Conflict Resolution.

Once, at a major department store, Reilly asked the salesman if he'd accept a lower-than-listed price for a pair of shoes. While the salesman claimed he wasn't authorized cut a deal, he was willing to throw a few shoe trees into the deal at no cost.

There always are possibilities for negotiation in the marketplace, Reilly says. "Everybody has been programmed to read the (price) ticket and to think that's the final price. But that's, in reality, an offer. They're throwing out an offer. You figure out: Do you accept this or not?"

Not every retailer or service provider will be open to negotiating with a prospective customer. "There are many things you cannot haggle," Reilly says. "You cannot go into a restaurant and say, 'I want this steak for $15 not $29.95.' "

But many other businesses and retailers will at least be open to hearing your offer, while others that may not normally do so will be willing to haggle under certain conditions.

For instance, consumers have a better shot of haggling successfully at independently owned stores, rather than chain stores. The trick, Budin says, is to seek out the owner or manager, either of whom generally will have the authority to depart from the listed price.

Also good potential haggling targets are stores that are slated to close, because "they want to move the merchandise," Budin says, and stores that are trying to clear out old merchandise -- seasonal merchandise, for instance -- for new.

Even in a grocery store -- a type of store not noted as a haven of negotiation -- a manager might be willing to accept a lower-than-marked price for items that are "nearing the end of their shelf life," Marks adds.

However, effective haggling can require homework. Before asking for a price break on a new TV, for instance, a consumer might see what the TV is selling for at other stores around town. Then, armed with that information, the consumer can leverage one retailer against the other, increasing the chance that a deal can be made.

Larry Alterwitz, chief executive officer of Walker Furniture, says haggling isn't common at his stores because his company focuses on large volume and everyday low prices. But, Alterwitz continues, no businessperson ever wants to lose a sale.

"So if someone comes in with that approach and says, 'Someone else has this item at this price. Do you want to meet this price?' then it's simple to say, 'You bet I want to meet that price,' " he says.

However, Alterwitz adds that a consumer might want to be wary of a retailer who's a bit too eager to haggle. That, he explains, could be a sign that the retailer's asking prices already reflect an unreasonably high markup.

Some retailers "set their prices accordingly so that they can haggle," Alterwitz says. "And you've got to remember that these people have a strategy. They (haggle) 365 days a year, 12 hours a day, and they're going to be way better at it than the average consumer."

In just about every instance, however, the hardest part of haggling will be the first step: simply gathering up the courage to ask a retailer if he or she would be willing to discuss that listed price.

A retailer "can always say no," Budin says. But, on the upside, "they can't kill you. They can't shoot you."

The key thing, Marks agrees, is "just having the chutzpah, if you will, to ask. And if you don't fear rejection, you can certainly come away a winner."

Contact reporter John Przybys at jprzybys@reviewjournal.com or (702) 383-0280.

 

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