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'Is that the best you can do?'

A sluggish economy gives consumers more reason to haggle over prices.

By Neal Learner Special to The Christian Science Monitor / April 23, 2001


Savvy shopper Lyndsay Heitmann knows exactly how to get the best deal from a typical street vendor. When she stumbles across something hot, the California resident plays it cool.

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"First you show some interest, and then you put it back and start to walk away. Trust me, they'll come after you," explains Ms. Heitmann, who stopped in Washington's busy Georgetown commercial district recently to peruse a sidewalk stand filled with handbags.

"Usually I try to go at least $10 below what they're asking. But sometimes they laugh at me if I go too low and they say, 'Are you kidding, I'm not going to make any money off of this sale.' "

Haggling a few dollars off the price of an imitation designer purse can reward the novice with a small twinge of satisfaction.

But when it comes to big-ticket items with flexible pricing - like cars, antiques, and oriental rugs - a consumer armed with knowledge and a bit of skill can knock hundreds if not thousands of dollars off the original asking price. And an economic slowdown in the US has only helped make bargains easier to find.

The common perception is that Americans do not like to haggle and simply lack the moxie for it. But they do, in fact, know how to bargain in their own quiet manner, says Fernando Cruz-Conde, sales manager at the J&J Oriental Rug Gallery in one of Washington's Virginia suburbs.

"They say things like, 'Well, I don't want to spend a lot of money right now. I don't have the budget. Let me think about it,' " notes Mr. Cruz-Conde, an expert in interpreting such signals. "They're not as aggressive as foreigners, but they have their ways."

If a rug buyer fails to transmit such a message, he or she could end up paying a royal ransom. Many shops mark up rugs anywhere from 10 to 2,000 percent, Cruz-Conde says. Rug buyers should always bargain for at least 20 to 30 percent off, he stresses. "But if they really work hard, they could even get up to 50 percent most times."

Women generally have a more natural ability for this process, notes Joshua Nabatkhorian, co-owner of J&J Oriental Rug Gallery. "Men are not as patient," he says. "Women are more patient and love shopping, and are willing to go back and forth. Men are much easier to sell to."

Others concur. A sales associate at a large electronics chain in northern Virginia said women frequently ask him for discounts on items, while men pay the asking price, and "just want to get out of the store."

For men and women alike, there is little wiggle room when negotiating for a new automobile, despite perceptions to the contrary, says David Hyatt, spokesman for the National Automobile Dealers Association. The new car business has a very low profit margin of about 2 to 3 percent, he says.

Although some car dealerships, like Saturn, offer "no haggle" pricing, most still rely on time-honored negotiating methods. These days, however, buyers of both new and used cars are increasingly driving the bargain, primed with reams of information gleaned from the Internet, right down to the vehicle's invoice price.

"There is a tremendous advantage for the consumer to negotiate," Mr. Hyatt notes. "When you go in to buy a car, you don't know ahead of time how long the car has been on the lot, how much pressure the dealer feels to move the car."

"From the dealer's perspective, it's an advantage to have an informed consumer because it actually saves time in the sales process," he says. "Each party knows they've reached a good deal because it's based on solid information."

Information, of course, is the juice in any negotiation. And it is vital for buyers trying to secure the best price on goods that require a high degree of specialized knowledge, including cars, homes, art and antiques, says Emily Chamlee-Wright, a professor of economics at Beloit College in Wisconsin.

In fact, such specialized items are among the few things in our retail economy subject to negotiation and "price discrimination," she explains, noting this is not a pejorative term. Rather, "it suggests that if you know the market, you will get a better deal."

Otherwise, haggling seldom takes place at the retail level, Ms. Chamlee-Wright says. In most cases, this is to our advantage. "Bargaining takes time, and time is a resource we value highly," she notes. The practice, however, goes on full-bore at the wholesale level.