FOOL'S EYE VIEW
The Best Ways To Pay Less!

By Cliff D'Arcy
May 12, 2005

As I've mentioned several times previously, I enjoy haggling. That's partly because I spent ten years working in sales and marketing departments before becoming a financial writer. Indeed, at its best, haggling can be rather fun – a bit like a good-natured tug of war.

However, negotiating does require both thought and practice to get right. If you're too soft, you end up paying over the odds, but if you're too forceful, you may be shown the door! Your aim is to reach the best deal for you, which sometimes means going elsewhere.

Anyway, enough waffle: here are fourteen tips, tricks, techniques and tactics to help you to barter better! I don't guarantee that all of these will work for you – it's up to you to pick and choose the methods that best suit your personality, personal preferences and ethics.

For easy reading, I've used the term 'salesman' but, of course, there are millions of saleswomen, too.

1. Know what you want

You have to decide on your own position before you begin haggling. So, if you see a table and chairs for, say, £350, set a maximum price which you're prepared to pay, plus the ideal figure that you'd like to pay. Your maximum price might be £300, which is a seventh off (14%), and your ideal figure might be £250, which is an ambitious 29% off. It all depends on how much you want the goods and how strong you think your negotiating stance is as to whether you pay your maximum price or walk away, which should always be one option.

2. Keep a level head

If your really, really must have that one particular item today, don't let on too much, or you'll badly weaken your hand! Instead, you have to tread the fine line between showing the salesman that you are a genuine buyer and being seen as disinterested. If the salesman knows that you've set your heart on this item, he hardly has to negotiate at all. If he smells that the sale's practically in the bag, all he needs to do is stonewall you and then wait while you reel yourself in!

3. Think about more than just price

It's crucial to compare like with like, so always look beyond the price and cost of delivery - or you could end up short-changed on service or after-sales care. For example, I bought my last television from good old John Lewis, not because it was the cheapest, but because it provided a free five-year extended warranty, which I considered to be a valuable benefit.

4. Shop around!

I'm a member of the 'Money SAS' – the Shop Around Savers! Over the years, I've learned that convenience costs, whereas 'doing the work upfront' – doing your research before buying – always pays off handsomely. You'd get at least three quotes from reputable firms for major home improvements, so why wouldn't you do the same when buying, say, a new oven?

By using price-comparison websites, also known as 'shopbots', even the most timid person can find substantial reductions online. So, if you're not bold enough to haggle, at least promise me that you'll do some online scouting around before diving into a purchase!

5. Always ASK!

As my mother always says, "Those who don't ask, don't get", and this is certainly true of haggling. If you don't ask for a discount, extras or free delivery, you certainly won't get any of them; it's as simple as that.

Some people – especially in southern England - feel that asking for a discount is cheeky, impolite, downright rude or 'not the done thing'. That's absurd. In fact, very wealthy people often politely ask for a discount on goods and services, which helps to explain why they hang onto their money so well. When I worked in sales and marketing, I was taught always to 'ask for the business', and the same applies to consumers. If you're too embarrassed to ask, you can't begin to negotiate and, thus, are doomed to pay list price forever. Ouch!

Of course, you don't want to get fleeced, and the salesman doesn't want to make a loss. However, a discount is there for the taking, if only you can grasp it. For example, I wrangled £400 off the price of a ring for my wife, simply by asking a few simple, direct questions of the jeweller. That's a handsome return for about five minutes of effort!

6. Ask the right person

Pick the wrong person to negotiate with and you've wasted your time. For example, the Saturday assistant in a local electrical outlet isn't a good person to parley with. In small outlets, aim to speak to the manager or his/her assistant. With chain stores, speak to the floor manager or the most senior person in the vicinity. The higher up the chain of command someone is, the more discretion they have to hand you a bargain!

7. Ask 'open' instead of 'closed' questions

This is a beautiful technique that all good salesmen know by heart. Asking 'closed' questions – ones that can be answered with a simple "Yes" or "No" is a bad move. Instead, ask 'open' questions, which force the other side to answer more carefully. Here's one simple example:

Compare: "Please can I have a discount?" – Answer: "No!" with:

"How much will you reduce the ticket price by if we shake on the deal right now?"

The answer to the second question will provide you with far more information about the salesman's stance, motives, and how much ground he is prepared to concede. Good open questions often start with How, What, When, Where, Who, and Why.

8. Try to justify any discount

There are loads of different ways to support your argument for a discount. Here are a few choice phrases that have worked for me:

"It's almost exactly want I want, but it's a bit out of my price range. What's the lowest price that I could take it away for today?"

"If I pay by credit card, you lose a few percent in merchants' fees. How about we agree to knock off, say, an extra 5% for cash? I have the exact amount right here."

"I think there's a new model being introduced later this year, so this one has a pretty limited shelf life. How about you knock off £50 and I'll take it off your hands today."

9. Ask for extras

Sometimes, you'll find that, despite your best efforts, your negotiations haven't gone according to plan. Fair enough - you can't win 'em all. If the salesman refuses to budge on price, try asking for a few extras to be thrown in. This horse trading can result in a prize as small as a set of batteries for an electronic item, but it might pay dividends. For example, one car dealer would hardly budge on price when my wife bought her previous car, but threw in air conditioning for free. By thinking about value instead of price, you stand more chance of striking a deal.

10. Mention the competition

Salesmen know only too well that they work in a competitive environment. They often have challenging sales targets to meet, so they'll only spend time and effort on genuine customers, not browsers. So, explain that you are keen to buy today, and that you've been to visit some of his rivals – or will be doing so later. This gives him a chance to win your business on the spot, plus get one over on his competition at the same time! However, give him reasonable hope that he can win your custom – tell him that you're visiting, say, three or four outlets, even if you plan to go to ten or more. In other words, make sure that the odds are good enough for him to join the game!

11. Play suppliers off against each other

Salesmen are players, and they hate to lose. One tried and tested tactic to exploit this is to claim that a rival firm has already beaten his offer. I did this when buying my wife's last car. When the salesman named his price, I looked disappointed and said that I'd found a very similar car in an online showroom for a grand less, which wasn't strictly true! I then explained that I liked him and wanted to buy from him, but how far could he budge on the price. Five minutes later and I had an extra £500 off. Easy as pie!

However, don't go endlessly back and forth between suppliers in an attempt to grind out a rock-bottom price, otherwise you'll be marked down as a time waster and a hair-splitter. Try to win the discount you want in one round, not fifteen! Equally, if a salesman names their best price, but then tells you to come back to him if another supplier beats it, ask "Oh, is that your best price, or can you still beat it? If so, why don't you cut to the chase and give me your final price now, to save time?" If he's not already given you his best price, then he's just being lazy, and you may well decide not take him seriously!

12. Show some closing signals

Salesmen want to close a deal quickly, win their commission, and move swiftly on to the next customer. So, you need to show some buying signals for him to seize on. Here's an example that I used when buying a car last year:

Me: "I'm happy to take away the car today, but there's just one little problem..."

Salesman [looking worried]: "What's up?"

Me: "I'll need a full tank of diesel, a year's Road Fund Licence, new floor mats and a professional clean inside and out, naturally."

Salesman [after a bit of to-ing and fro-ing]: "Okay, but that's definitely your lot!"

Me: [shaking his hand]: "It's been a real pleasure doing business with you, sir. Thank you."

Another way to show that you're serious is to name your conditions. In other words, be direct and tell the salesman exactly what he needs to win your money. For example,

"If you're willing to knock £25 off and can guarantee delivery by Friday, then I'll do the deal today. How does that sound?"

However, if he meets your conditions and you don't buy, then your credibility will be in ruins and, in all probability, the salesman won't budge another inch. So, deliver on your promises or don't make them!

13. Get the salesman on your side

Haggling is a friendly game of poker, not a fight to the death. Never be aggressive. By all means, be assertive, but you'll often find that the friendly, polite approach works better than any other. Your goal is to make the salesman feel like he's won, when, in fact, you've both done so. Equally, don't aim to score points off him, because you'll undermine his ego, make him feel like a loser and, therefore, someone less willing to compromise. By all means, get him to make a few concessions, but give him something back in return, even if it's only a smile and a thank you!

One technique that often helps is to mention that if you're happy with this deal, then you'll be back for more. Salesmen love repeat business from satisfied customers, because it's all pay and no work! By asking for a better deal today and promising yet more custom further down the line, you may just swing the odds in your favour. A good salesman will concede a little more this time if he knows that he's entering into a long-term relationship.

14. Put yourself in his shoes

Actually, a better phrase would be, "Put yourself in the other man's mind", because that's what you should be doing. Think about what's on his mind and what is motivating him. Perhaps he needs this sale to make his target and take home this month's bonus? What's more important to him: getting some extra cash flow or making a particular level of profit? Does he want to clear the shelves or showroom of some old stock so that he can bring in the shiny new models? By figuring out these triggers (or knowing about an industry's seasonal factors), you should make your haggling faster and more profitable.

That's it from me: happy haggling!

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