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Monday, August 10, 2009
Haggling Picks Up Steam During Recession
Even before the economy slid down the tubes, Leah Ingram found new religion in haggling at stores. She and her husband, Bill, went from a lifestyle of second mortgages and plentiful vacations to economizing on everything from dentist's office visits to leather chairs.
"I think it is like sport for me," says Ingram, a freelance writer who lives in New Hope, Pa. Shedding the old way of paying full price is like learning to eat healthy and exercise, she says. For her, researching and scoring deals has even become a pastime.
"It's fun to see how much I can save on something that I really need," she says.
To document her new, cost-conscious lifestyle, she started a blog called "Suddenly Frugal" to document the myriad ways in which she saves money. In January, she plans to release a book on the same subject.
Given the state of the economy and climbing unemployment, you'd think haggling is also on the rise. But most U.S. shoppers don't bother. A recent Consumer Reports survey showed only 28 percent of Americans haggle over prices. A separate report from market research firm BIGresearch found 45.1 percent of adults haggle for things other than cars and homes.
However, the Consumer Reports survey found that consumers who haggle succeed as often as 83 percent of the time in landing a better bargain. Buyers had the highest success rate haggling on hotel rates and clothing, followed by jewelry, new cars and airfare and appliances, the survey found.
Those who are practitioners, however, say they enjoy more success than ever in an economy like this one.
Michael Soon Lee, author of a book called Black Belt Negotiating says he negotiates for everything, including eating out. He estimates he saves $2,500 annually at restaurants by negotiating deals with eateries he frequents — getting $10 back on average with every $100 he spends. He gets his doctors to cut him a break on medical bills and dry cleaners to offer him loyal-customer discounts. Lee even got a local gas station to give him a discount for coming in on its slowest days.
"I've talked to many, many vendors all the way from Nordstrom to Best Buy to car dealers to real estate sales people. Everyone is haggling now because this gives you an instant raise," Lee says.
In some cultures, haggling on price is a way of life. For many others, it can feel potentially embarrassing or inappropriate. But Lee says that's a loser's mindset.
"Before you go into the ring, you can't be afraid," he says, comparing the negotiating process to martial arts. "If you are, you've already lost. And you've got to recognize, in haggling, there's really nothing to lose. If you don't ask for a discount, the answer is already 'No.'"
Lee has other recommendations, including doing background research. Figure out how much you spend at a place, and go in armed with statistics. Tell a dry cleaner, for example, what your business is worth to them before asking what they can do for you. Know what their competition offers, and use that in the negotiation. Talk to a manager, or someone empowered to make business decisions.
Also, be comfortable with silence during the haggling process, he says. Sometimes a vendor will fold if you let them think about it over a long period where no one speaks. It's also important, he says, not to counter with a set number, which can just limit the potential discount you might get. Lee says customers should also negotiate for things other than price, like free delivery, or an extra service or feature.
Finally, he says, a good haggler needs to be prepared to walk away artfully. Don't just stomp off in a huff, Lee says. Slowly withdraw, reminding the vendor how much your business means to them, and what a shame it would be for both parties to lose out.
BIGresearch's survey showed a slight decline in the number of people who said they haggle for better prices. The percentage fell to 45.1 percent in April, from 50.3 percent a year earlier.
But retail stores are heavily discounting already in a way they didn't last year, which might affect how consumers behave, says Pam Goodfellow, a senior analyst with BIGresearch.
"Consumers don't feel quite the need to negotiate on price, because they know they're getting a good deal," Goodfellow says. People research before they shop, and use coupons more than ever, she says, but many people have also stopped buying some things altogether. The percentage of people who say they haggle for furniture is down, she notes, but that could be because furniture sales are down dramatically overall.
During a recent trip to Roger's Electronics in Flemington, N.J., Ingram, the freelance writer, admits that finding a killer deal — $700 for a stainless steel refrigerator with an automatic ice maker — dampened her need to haggle as much. She still tried negotiating away the $75 delivery fee. But when she failed on that count, she still happily handed over her credit card.
"Inside, I'm jumping up and down," she says.
-excerpt from NPR