The art of haggling abroad

By Sarah Efron on January 30, 2014
Estimated reading time: 4 minutes

Canadians feel uneasy negotiating prices in foreign lands but with the right tactics you can get deals and insight into the culture.

My first experience haggling over prices in a foreign land was a miserable failure. During a trip to Mexico, I was in a stall eyeing a woven Mexican blanket. I asked a young vendor how much it cost, and he responded with a price in pesos, around CAD$20. When I agreed, his eyes widened with shock. He could not believe this naive gringo had agreed to the first inflated price he offered. It was too late to change course, so the money was handed over to the euphoric vendor. For years, the brightly coloured blanket remained in my apartment, a visible reminder of my lack of skill in negotiating prices. Haggling for goods or services is not something Canadians excel at. We lack experience and tend to favour fixed, clearly labelled prices. We can also be uncomfortable with the confrontational aspect of haggling, and feel guilty about wrangling lower prices from merchants who live on less than we do. Some travellers, however, are outraged if they’re charged even a penny more than a local. Here’s how you can negotiate fair prices during your next southern holiday.

Slow shopping

“The first thing people don’t realize is that first and foremost, bargaining is a ritual social behaviour,” says John Zada, a travel writer and journalist who has lived and travelled extensively in the Middle East and Asia. For starters, you’ll do better if you go shopping when you aren’t rushed and can make conversation with the merchants. Chatting about the merchandise is a good opportunity to reveal any knowledge you have about the product, something sure to earn you respect from the seller. “You need to be friendly and genuine,” says Zada. “The more you engage at a social level, the more willing they’ll be to come up with a better price.” Before heading out to the market, get some information about the typical price of the item you desire. “Ask a bunch of people who have no vested interest how much it would cost if they bought it,” says Matt Kepnes, an American traveller who blogs at nomadicmatt.com. “Ask at your hotel, or ask the waiter at the restaurant. If a local can buy it for a dollar you’ll probably pay more than that, but you don’t need to pay $5 or whatever they would charge you. You’ll never pay the same price as a local, but you can get closer to what locals pay.”

Compare the options

Make sure you’ve researched possible alternatives to the item you want, says Kevin Tasa, an expert in negotiations and associate professor at the Schulich School of Business. If you know three other companies offer snorkelling trips to a nearby island, for example, you’ll be empowered to negotiate for a good rate. Finally, before any negotiations, pause for 30 seconds to think of the maximum price you’d be willing to pay. “If you don’t think it through, you might get caught up in the moment and continue to let the price escalate when you may need to just walk away,” says Tasa.

The mechanics of a deal

While most people prefer to let the merchant name the first price, buyers are usually better off throwing out the first number. “Making the first offer takes advantage of a psychological concept called anchoring,” says Tasa. “Numbers that are almost pulled out at random or written on a piece of paper actually serve as anchors in both parties’ minds. If we’re trying to explain outcomes in a situation where people are haggling over price, the opening offer accounts for 80% of explained variance in the actual outcome.” But where do you price that first bid? If you’ve learned from the locals that a certain type of jewelry never sells for less than $5, don’t offer $5, says Tasa. Start below that amount—say at $4.50—to give yourself room to move up. If you’re not able to get the price at or below your predetermined maximum price, walk away. And don’t forget, if you buy several items at once, vendors will likely give you a better deal. Negotiation is best thought of as a fun game, so don’t take it too seriously. “I would caution you about haggling over the equivalent of a buck or two,” says Kepnes. “Do you really want to haggle for 30 minutes over $2 when goods are already so cheap? I say let them have the extra dollar—it’s worth more to them than it is to me.” And while Canada isn’t as open to bargaining as most of the rest of the world, there are ample opportunities to haggle over big-ticket items like automobiles, mortgages, electronics and cell phone contracts. “People don’t realize you can also negotiate over things like the price of jeans in a store if you’re willing to take the energy to ask to speak with a manager,” Tasa say, “In fact ,if you have time, you can negotiate over almost everything.”