The rise of haggling
Let's make a deal

Feb 5th 2009 | NEW YORK
From The Economist print edition
Cash-strapped consumers are haggling their way to big savings

THE Baccarat chandeliers and gleaming marble floors of New York’s Plaza Hotel would appear to have little in common with the cramped stalls of a Yemeni market. But in both, bargaining can lead to a better deal. The bad economy has made the Plaza more flexible, and if the price of a room sounds steep, would-be guests can negotiate it down. The hotel may even throw in free cocktails to sweeten the deal.

The hotel business is reeling as firms and families cut their travel budgets. But it is not the only industry that has become more willing to grant discounts to confident hagglers. Clothes and electronics shops have become particularly eager to move their merchandise, and consumers, aware of their desperation, have grown bolder. According to America’s Research Group, a market-research firm, 72% of American consumers have haggled in the past four months, compared with 56% a year earlier. Britt Beemer, the firm’s chief executive, estimates that they are successful 80% of the time.

Hunting for a bargain may be rooted in the American shopping experience, but haggling is not. Now that even big department stores such as Nordstrom will listen to customers trying to cut a deal, however, haggling is becoming more accepted, at least for as long as the recession grinds on. Even if they cannot get a discount, shoppers can ask for another item to be thrown in, or for the retailer to pay the shipping costs or the sales tax.

Haggling works best in hard-hit industries: car dealers are more willing than ever to hammer out a bargain now that sales have slumped, and property brokers will cut prices and fees when pushed. But the trend is spreading. Providers of phone and internet services are willing to cut monthly rates to keep customers from cancelling or switching. Richard Zeckhauser of Harvard Business School expects prospective students to negotiate more financial aid from universities. If they have the strength, patients can also haggle over medical bills.

Credit-card companies are being more flexible with customers who want interest rates reduced or late fees waived. Curtis Arnold, author of “How You Can Profit From Credit Cards”, says more companies are creating “hardship programmes” that they tell consumers about only once they try to haggle.

In the long term, firms may suffer if American consumers get used to the idea of all this horse-trading. But in the short term, it could prop up sales. In New York’s deserted shops, a haggler is better than no customer at all.
[Edited 2/7/09 20:49pm]

We always haggle for big ticket items it's like a game

I'm not too good at haggling, usually, if I'm the seller, I would lose.