How to Negotiate With Retail Stores

Everyday Bargaining With Merchants

Jul 29, 2009 Jacqueline Trovato

The prices of many everyday items people buy at retail stores like furniture, jewelry, appliances, mattresses, antiques, electronics, and clothing-are negotiable.

Even those who acknowledge that retailers will bargain, or who have friends or family members who are devoted dickerers, often say they'd be too embarrassed to do it themselves. They believe it's undignified. Retailers have exploited this forever. Whoever coined the expression "If you have to ask the price, you can't afford it," must have been a retailer. There is no benefit to paying full retail for anything a consumer can get with only the slightest additional effort to negotiate.

Some retailers will flat-out refuse to bargain. Others will bargain only occasionally, or only in special circumstances, or only with great reluctance. Price flexibility is most common on the purchases that are least common: expensive things. The risk-to-reward ratio makes retail bargaining a no-brainer. The downside-that a consumer will be told "no"-is negligible. The upside-saving a slew of dollars, having some fun, and reinforcing negotiating skills-is outstanding. The inescapable conclusion: It makes sense to ask.

Markup Leaves Room for Negotiation

The standard markup from wholesale to retail is 100 percent! That means a $1,000 sofa might have cost the store $500; and a $50 shirt cost $25. Luxury items are marked up even more. As a very general rule, the more the markup, the more flexible the price will be. On the other hand, high-volume retailers (grocery stores and discounters like Wal-Mart) thrive by moving huge quantities of goods at very low markup. These are less likely-but by no means impossible-venues for bargaining. Retailers of every stripe agree on one thing: All markup is good markup.

Negotiation Tips To Get the Best Deals

While there are no special tricks for negotiating retail purchases, here are some suggestions that may help.

Do the homework. Try to learn what other local retailers are charging. Check the Internet or newspaper, call or drop by a few stores. Study the price guides for antiques, other collectibles, and cars. The single most persuasive-and, for the consumer, most comfortable-argument for a price cut is that the same item is being sold elsewhere for less. Merchants never want to admit they're uncompetitive. Many will match or beat the competition's price-some even guarantee it-if that's what it takes to make the sale. Be knowledgeable and truthful-but not unnecessarily specific-about the other prices.

Be nice. Retailers are no exception to the rule that people concede more to people they like. The nice consumer gets more concessions than the screamer.

Lead with a krunch. A gentle krunch is the perfect opening: "It's wonderful, but just so expensive!" This requires no preparation, avoids opening-offer angst on both sides, and lets the consumer keep his options open. Remember: No one knows how low the merchant will go.

Ask about the sale price. "Sale price" krunches-asking when the item will go on sale, and what the sale price will be-are comfortable and effective. If the consumer likes the merchant's answer, they should offer to buy it now at the future sale price. If the item's already on sale, or it's a "special purchase," the price is even more negotiable. A sale price is a signal that the store wants to move the item out, quickly. No matter how attractively it may be priced, "special purchase" merchandise-things the store bought especially cheaply-almost always carries a higher profit margin than regular merchandise.

Ask for a volume discount. Whenever buying more than one item, and especially if buying multiples of the sale item, consumers are entirely justified in asking for a volume discount. "How about 10 for the price of 7?" Respond to the proposed discount with a nibble ("I'll pay the price if the store throws in a box of widgets."), a counteroffer, or a krunch ("I was hoping for a better deal."). If they consumer is not having any luck, they should try dealing with the manager.

Exploit all flaws and problems. It's easier for everybody if the consumer can find a pretext for the merchant to give them a deal. Look for the tiniest defect-a scratch, a loose thread, a ripped seam-and exploit to the fullest the bargaining leverage possible. Regardless of its condition, if the item is a display or a demo model, a discount is called for. If the merchant is out of stock on a particular model, it's time to get a discount on the more expensive model.

Time is money. The more time spent with a salesperson, the more the store has invested in the deal, the more it stands to lose if the purchase doesn't go through, and the more flexible they will likely be.

Deal with the manager. Don't fool around attempting to negotiate price with a sales clerk. This is wasting everyone's time. Only managers have pricing authority. Ask to speak with a manager as soon as politeness permits. The smaller the store, the easier it will be to reach the ultimate decision-maker: the owner. Consumers usually have a better chance of bargaining in a smaller establishment.

Don't forget to nibble. Whether or not a price concession is given, it's appropriate to sweeten the deal on things like delivery, assembly, alterations, installation, batteries and speaker cable. Or ask the merchant to take care of the sale tax.

Cash has clout. When charging purchases, merchants instantly lose 2 to 3 percent through a merchant fee to the card issuer. This means that if he's still willing to take plastic at the end of the deal, he's still got room to move. If paying cash is an option, leave the cash-or-credit payment issue open during the negotiations. At the end, offer a credit card, then hesitate and ask, "What's your merchant fee on this? Three percent? For two percent I'll write the store a check."

The copyright of the article How to Negotiate With Retail Stores in Personal Budgeting/Finance is owned by Jacqueline Trovato. Permission to republish How to Negotiate With Retail Stores in print or online must be granted by the author in writing.

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