Negotiating Strategies…When Haggling Makes Cents

In many cultures, haggling is a time honored tradition. In modern day America, however, it's been less commonplace with the exception of yard sales or big ticket items like autos or real estate. But more often, whether due to a weakening economy or an ever- increasing blending of cultures, people are starting to view any business transaction as an opportunity to negotiate.

Most people confine their haggling to goods rather than services, although in recent years, the cost of services has gone up more than the cost of goods. This means you're better off cutting a deal on the cost of a brake job, rather than trying to bargain down the price of a new lawn mower. But regardless of the type of purchase you are considering, your best chance at getting a great deal is in adopting the attitude that “It never hurts to ask.”

You'll never know if you don't ask.

Hockey great, Wayne Gretsky said “You'll always miss 100% of the shots you don't take.” When it comes to haggling this is definitely true. Unless you ask for a discount – you're going to pay the ticketed price. If haggling makes you uncomfortable, try dropping some hard to miss hints, such as asking when an item will be going on sale. Once you're ready to haggle in earnest, try these tips to increase your chances for success:

• Never Pay Retail - Keep in mind, when you see Manufactured Suggested Retail Price (MSRP), it's usually the maximum manufactures want a retailer to sell their product for. So unless, it's a “hard to find” item that's in high demand, MSRP should be where the negotiations begin, not a final price.
• Do Your Homework – Knowing what an item costs at a rival store, or what you would pay on the internet can greatly increase your chances of getting an item for a lower price. Bringing the actual ad and asking them to beat the price is your best bet.
• Talk to the Decision Maker – When trying to get a better deal, you're always better off talking to the boss. Even if salesperson has the authority to give you a discount, they probably can't give you the best available deal.
• Timing is Key – Don't try to strike a bargain while the store is busy. Most managers will not want to work with you in earshot of other customers.
• Offer to Pay Cash – If it's an option, offer to pay cash. Many merchants will welcome cash upfront to avoid credit card transaction fees and the possible risk of later disputes over charges with credit card companies.
• Silence is Golden – Silence usually works in your favor. It shows you're on the fence, and that you may just need a little incentive to push you over.
• Be Prepared to Walk – In a firm but pleasant manner, you want to give them two options: either they give you a better price here, or you'll find a better price elsewhere.

Where to Haggle

It's been said that at the right time and the right place everything is negotiable. So conceivably you could haggle anywhere, but some places you're more apt to be successful. Places and situations where you might consider haggling could be:

• Hotel Rooms – If the hotel isn't fully booked and they're not the only show in town, a manager may be receptive to giving you a reduced rate or extra night for free, rather than face the prospect of an empty room.
• Auto Repair – Most independent shops set their own rates, so get a few estimates and use that information to negotiate the best rate. You can also ask if they'll throw in a free oil change, or tire rotation since they have the car up on the rack anyway.
• Real Estate – Unless you are in a really hot market and available homes are scarce, most sellers expect to negotiate and will generally set their price higher than they're willing to accept as a final offer. Other than price, another area buyers can look for concessions is in having the seller pay for any repairs that are needed based on a home inspection.
• Car Purchase - With new or dealer-certified used cars, it makes sense to request quotes from several dealers. It's also helpful to know that according to The National Automotive Dealers Association, dealerships typically operate on a 2 to 3 percent profit on new vehicles and used car markups are usually $1,500 to $3,000.
• Furniture – Traditionally, furniture is marked up at least 60%, so there should be room to get a better deal especially if buying more than one piece. And with that kind of mark-up, you should always ask for free shipping.
• Health Care Providers - Many people think a medical bill is written in stone. However, these days many are willing to negotiate payment, especially on large bills, instead of spending time and money trying to collect on unpaid medical bills. This is becoming more common due to the rising cost of health care and the rising number of people without adequate health insurance.

With medical bills being the cause for many people's financial woes, it's interesting to note, that according to a Wall Street Journal poll conducted by Harris Interactive, while only 9% of people reported trying to negotiate a lower hospital bill, 70% of those that did reported being successful. Even if you are not in a position to pay the bill outright, being forthcoming with the billing office, instead of making them chase you down, can go a long way with their willingness to negotiate a bill down and agree to a reasonable payment plan. If you aren't comfortable handling the negotiations yourself, consider electing the help of a patient's advocate.

You Deserve a Raise

If you are reluctant to haggle, keep in mind that more merchants and service providers expect it these days. And think about it, to be better off financially, you either need to make more money, or spend less money. So every time you strike a bargain, it's like giving yourself a well deserved raise!