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Fallout: The Financial Crisis

Bargaining during the recession

Ashley Milne-Tyte Mar 20, 2009
Fallout: The Financial Crisis

Bargaining during the recession

Ashley Milne-Tyte Mar 20, 2009


TESS VIGELAND: And have I got a bargain for you! Personal finance advice on sale. No? Not a deep enough discount? Well, maybe I could talk with my manager and get an even better price. Still not enough? You want a free tote bag, too? Let me guess, you learned those bargaining skills at the mall. These days, it’s definitely possible. Ashley Milne-Tyte has our story.

ASHLEY MILNE-TYTE: Eulalia Brooks is a careful shopper. She always checks prices online before heading to a store. These days she has good reason to be frugal: her employer, a New York nonprofit, has made her job part-time. Until recently she’d never tried haggling with a retailer and wasn’t entirely sure how to do it.

EULALIA BROOKS: Method number one was very much similar to the girl method of getting free drinks. Of just, just saying please and smiling a lot.

It turned out retailers weren’t as open to all that smiling as the guys in college. But she soon embarked on a more ambitious strategy. In January, Brooks had her heart set on a hard drive for her computer. She headed to an electronics store, part of a New York-area chain. They didn’t have her item on sale. Still, she was determined to get 20 percent off. She approached a friendly looking sales guy and began her offensive. Did he know if her hard drive would be discounted any time soon? Could he possibly use his employee discount to sell it to her?

BROOKS: The thing that was really telling for me was even though he didn’t have all the answers, he was willing to stay with me, cause he wanted to make the sale, which, I was like, oh, he probably works on commission. So he wants this sale really badly.

She asked if she could talk to a manager, then told the woman the item was cheaper online, whipping out her iPhone to prove it. After several minutes of back and forth the manager offered her a 10 percent discount. Then the original sales assistant rang up the purchase.

BROOKS: He gave me an additional 10 percent off on top of that, which was his employee’s discount, so I got the 20 percent off overall, and so I got it at the sale price that I wanted.

Triumph. But Dan Butler of the National Retail Federation says shoppers shouldn’t expect to get that lucky too often.

DAN BUTLER: At most retailers it is illegal for you as an employee to give your friends your discount. And at most retail companies, it’s grounds for termination.

He says stores have markdown budgets, and they can’t go beyond them. Also, many states and counties have laws about price integrity. But retail consultant Wendy Liebmann says in this economic environment, stores are often more flexible than they care to admit.

WENDY LIEBMANN: The reality is today shoppers should ask everywhere they go, whether it is Niemann Marcus or it’s Wal-Mart.

And, she says, they are. And they’re not ashamed of it. Her company surveys shoppers all over the U.S.

LIEBMANN: We are seeing that anywhere from six out of 10 people, and higher in some cases, are saying I am proud of all the little ways I’ve learned to save, whether they’re high income or low income.

Bargainers have traditionally had more luck in smaller neighborhood stores where the owner runs the place and is willing to bend on price. Alison Houtte owns vintage clothing store Hooti Couture in Brooklyn.

Alison Houtte: Hi Ashley!

MILNE-TYTE: Hi Alison.

Houtte: How are you?

Since she buys used merchandise Houtte has more leeway than other retailers to bargain with customers and still make a profit. And she doesn’t object to shoppers angling for a better price. But she says etiquette applies no matter where the haggling takes place. I ask her what works.

MILNE-TYTE: So say I was a customer and I came in here today, and I looked at this coat, and I said, you know, I really — I like that coat, but it’s too expensive. What would your reaction be?

Houtte: Well, if you said that straight to my face, like, oh, it’s too expensive. You as the customer don’t wanna insult me. Because once you insult you’re getting yourself in trouble, because you’ve closed the door on the relationship.

Houtte says instead…

Houtte: Your approach needs to be gentle, warm, and, uh, realistic.

She says start by asking if there’s any flexibility on the price. And don’t forget to smile and maintain eye contact as you wheel and deal. But can you grin and bargain as stores everywhere shut down and lay off workers? Shouldn’t we all be paying full price to keep retailers in business? Eulalia Brooks doesn’t think so.

Brooks: If you’re respectful, and they don’t mind, they’d rather me actually shop, buy something smaller, buy something a little less over the duration of the time, versus not seeing me for months on end.

In a way, she says, she sees bargaining as doing her small part to keep the economy afloat.

In New York I’m Ashley Milne-Tyte for Marketplace Money.

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