In tough economic times, shoppers take haggling to new heights

Stephen Popick of Alexandria, Va., doesn't take sticker price for an answer. From steaks to bicycles, he always knows how to get the best deals. Join him on the hunt for an iPod touch and pick up some tricks from the haggler's handbook.
By Michael S. Rosenwald
Sunday, January 31, 2010

The price tag on the smooth pair of Cole Haan loafers at Macy's said $148. I considered that a fair opening bid. Standing across from the salesman and the cash register, I said, "Can you knock off 25 percent?"

The salesman said, "Can't do it." But I pressed on: "I'll get them on the Internet or at one of your competitors, so let's just do this here."

Salesman: "Geez. You're like the second person who has tried to do this today."

We stared at the shoe box. I liked what was inside. The loafers fit well, but they would feel even more comfortable with a discount.

Macy's blinked first. "Ten percent off," the salesman said. "That's the best I can do." I sensed an advantage and counteroffered: "Let's do 20 percent." I then sensed annoyance and settled for the 10 percent.

My first attempt as a haggler saved me almost 15 bucks and placed me at the center of "the biggest sea change of consumer behavior since the end of the Second World War," as Nancy Koehn, a Harvard Business School retail historian, calls it. In a country that has long shunned haggling outside of car dealerships and mattress stores, my behavior may have once appeared unseemly, even crass. That is, until the Great Recession. Firms are desperate for revenue, Americans are feeling broke, and the aisles from Best Buy to Macy's and even your neighborhood Giant -- as well as the 1-800 numbers at Comcast and Verizon -- have become venues for let's-make-a-deal.

A recent Consumer Reports study found that 66 percent of American consumers had haggled at least once in the preceding six months, with an 88 percent ka-ching rate on gadgets, clothes, furniture and steak. "People like this," Koehn said. "They are not going to go back to giving their money away. Why would they?"

The recession merely popped the lid off a retailing shift that has been brewing for a decade. EBay gave millions of consumers dealmaking training wheels (top bid for a "Goonies" DVD: $3.50). The Internet offers instant pricing data (do a Google search on "Lucky jeans and deal and DC"). And don't forget Priceline, which lets consumers name their price for flights, hotels and rental cars (thank you, William Shatner).

For consumers like me who have spent decades shopping at full retail, getting a deal on previously no-deal items is liberating and invigorating, as I found out during a recent week I spent haggling. At first, my wife and friends asked me if I was crazy, but when I reported saving $3 on steak at Giant and $50 a month on our Verizon bill, they asked only one thing: How?

I had help. I met Stephen Popick, a government economist, for coffee one day. Popick is a well-paid guy -- he can afford things. But he looks at price tags merely as suggestions. (Call him cheap, and he'll thank you for the compliment.) For years, Popick has haggled down prices on ground beef, videogames, beer, bicycles, magazines, satellite TV and even the his-and-her plastic reindeer that adorned his front lawn for Christmas.

"I've always wondered why more people don't do this," said Popick, who lives with his wife in Alexandria. "This is your money. It would be wasteful not to do this, right?"

Until the recent recession, Popick was a checkout pariah. Americans, according to economic historians, had not really haggled on retail goods since the Great Depression. Long before that (we're talking frontier days), we haggled over everything. But the Industrial Revolution brought fixed price tags. Rowland Macy, the founder of Macy's, played a key role in the trend, heavily advertising prices that he wouldn't budge from.

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