A man and woman walk into an electronics store in Toronto's Chinatown. The man is looking to buy a watch. Not a nice watch, just any old watch. He settles on an average-looking Citizen. "What's the best possible price you can give me?" he asks. The tension immediately amps up. The sales clerk jabs some numbers into a calculator and shows the revised figure to the man: "This price is special." Here, the watch-buying man throws the salesman a pitch. "What if I buy a watch for me and one for my wife? What price can you give me?" he asks. Out comes the calculator again, and soon there's a new, lower, very special price.
But then comes the curveball, a tactic so shrewd that it made me vow to change the way I buy stuff. The stranger says, "Now, I want you to give me that price for one watch." The clerk begins pleading with the man, but he's having none of it, and makes a move for the door. The clerk has one last tactic: the wife. "She is so beautiful," he says. "She deserves a nice present." The man feints toward the door, this time actually opens it. Finally the salesman relents and makes the sale.
Haggling. This is how all transactions were meant to be done. Ten thousand years ago, no self-respecting caveman would attempt to buy a new spear without saying something along the lines of, "Five elk hides? You gotta be kidding. I'll give you three." These days, though, the grand dialogue that is capitalism has become one-sided. Sellers still have plenty to say about price-"Only $39.99!", "$14.99 for a limited time!", "Don't pay a cent until 2009"-but buyers are silent. We just hand over our credit cards. It's a wonder we don't apologize when it's all said and done.
I decided to do something about this.
First attempt: Health club Health clubs always offer deals. At the very least, they will waive the initiation fee. The waiving of the initiation fee, you might say, is the initial ritual. But armed with what I had seen in the watch store, I was pretty sure I could do better.
I called up Diesel Fitness, arguably the swankiest health club in town and the kind of open-concept temple of narcissism that's swarming with clientele so hot it can induce a panic attack. Just my luck, there was a membership sale. Over the phone, the perky saleswoman told me that the regular price was $1,299 for a year, but she was willing to let me in for $1,099. Oh, and they would be happy to waive the initiation fee.
"What if my wife joins, too?" I asked. "I could give it to you for $805 per person." Not bad. "How about $750?" "I can honour that." While everyone on those elliptical trainers was paying $100/month, I had got it for a cool $62.50/month. Payday.
I know what you're thinking: Why didn't I paint my wife out of the deal, like the man in the electronics store? The answer is fear. The saleswoman's voice was getting tight, and I was getting nervous, scared of pushing her any further. In truth, I just wanted the whole experience to be over.
I don't have the faintest idea why this is. After all, it's not like the saleswoman was selling a piece of herself-watercolour paintings or soapstone carvings of her cat. She was hawking a product and being paid, I assume, a decent salary to do so. Why should she be offended? And yet, it felt like I had broken some unwritten code. Haggling is offensive, rude, improper and uncivil. It may even be unCanadian.
But if there's one thing the health club experience illustrates, it's that while we're busy being decorous and polite, we're paying more than we need to. How much more? I put the question to a friend of mine who works for a major potato chip company. I asked him because he is the only person I know who can tell you the margin on what he's selling. A small bag of All-dressed costs the corner store about 91 cents, he said. They turn around and sell it for $1.29. That's a 30% markup. On a bag of chips.
Second attempt: Haircut I needed one. So I paid a visit to Lid, a salon in Yorkville run by a woman named Vanessa, who has been cutting my hair for more than a decade. Yorkville, we all know, is famous for disgustingly high prices. But I have a frizz-prone Jewish Afro that only a stylist of considerable skill can tame, which is why I have been unwaveringly loyal to Vanessa. Still, did I need to pay the same margin on a trim as Yorkville dudes who can afford to pay full price for Armani?
A haircut with tip is normally about $53. I counted out an even $45, slipped it into my back pocket and walked in. Just as Vanessa began snipping off the first round of curls, I made my move. "Vanessa, I don't know how to say this, but I'm going through a cash-flow crisis. I have $45 in my pocket right now. Are we cool?"
I lied. Everyone lies. Capitalism is predicated on an unending series of lies. Is Juicy Fruit really going to move you? Is Dominion really "fresh obsessed"? For that matter, is Taco Bell really thinking "outside the bun"?
Vanessa's face took on an uneasy look. It was clear she felt sorry for me, which made both of us uncomfortable. But I held my ground. She said, "Mark, I think I've known you long enough that I can treat you to a haircut."
"I have $45 in my pocket. Really, it's no problem." But she insisted and abruptly changed the subject as she continued to snip away. Forty minutes later, my hair looked great and I had learned another lesson: Don't haggle with friends. More important, don't lie to them.
Third attempt: New suit With my charity-cut completed, I reasoned that retailers might be more willing to deal with a handsome, clean-cut man. I strolled over to Harry Rosen and rode the escalator to the second floor, planting myself in the Ermenegildo Zegna section. As I was rubbing textile thoughtfully between my fingertips, a salesman approached. He didn't like the cut of Zegna on my frame and put me into a Canali instead. I appreciated the honesty. We talked necklines. We talked about why Armani suits are cut so darn long, and soon enough I was trying on a charcoal two-button number. That's when things got down to brass tacks.
"How much?" "The suit is $1,750." "Can we do $1,500?" "The price is non-negotiable." "How about $1,600?" "I'm sorry, but this suit is not on sale." "Okay, $1,650," I said, staying the course. I had never sweated in a suit I didn't actually own. "You don't understand," he said. "This is a major corporation. If I gave you a different price on the suit, I could lose my job."
This was a painful and awkward episode. But it shed more light on the death of haggling. Major corporations, with their teams of bean counters responsible for setting prices, aren't concerned with what you're willing to pay for a product. They're concerned with what a supplier is willing to sell it for. The price isn't determined in the marketplace; it's tabulated inside some massive supercomputer that can calculate costs and work out the most acceptable margin, all without ever looking a customer in the eye.
My friend the chip guy knows this all too well. He refers to it as "the world of mass merch." The best example: Wal-Mart. This is a company that actually sells certain items below cost as a loss leader to lure in customers. There's no haggling at Wal-Mart, and there never will be. The company has pre-empted the entire process by reducing prices to the lowest possible level. The place may as well be called "My Final Offer."
The scary thing about Wal-Mart is that Karl Marx sort of predicted it. He envisioned the inevitable breakdown of capitalism for economic reasons, to be replaced by communism. Amidst Wal-Mart's thousands of square feet of gleaming retail space, all markets are mature and all returns are flat and predictable. In a sense, the proletariat takes advantage of Wal-Mart's "always low prices" and, in the process, usurps the bourgeois supremacy of mom-and-pop specialty stores looking to fleece consumers. But here's my problem with this post-industrial paradise: You may walk out of Wal-Mart thinking you got a good deal, but you will never believe you got a better deal than the guy behind you.
Fourth attempt: New fridge I still wanted to haggle for something big ticket. I was ready to nitpick with a total stranger over hundreds of dollars. My problem: I can't afford anything big ticket at the moment. Fortunately, my friend Dave just bought a house, and he's throwing wads of dividend money at a reno. He needed appliances, and so we took a trip to Caplan's appliances, where I had purchased all of mine. At the time, I had told everyone I got the best deal in town, and that was without haggling.
My only true success so far had taught me that sellers love volume. So we went for everything at once: Viking fridge, Thermador range and a dishwasher by Bosch with hidden controls so guests never suffer the indignity of spying your machine's buttons. Just as the salesman began tapping the order into his computer, I threw out my opening salvo: "What can we do on price?"
He began gesturing with his hands in a manner that indicated his reasonableness. All the models we picked were from the discount section, he explained; they were as cheap as we were going to find. He had a point. The Thermador range was priced at $4,199, while the appliance joint just down the road was selling it for $300 more. It was a good deal.
But I pushed, and with only a little resistance, the salesman knocked another $300 off the range, $150 off the fridge and $50 from the dishwasher. The new total was $9,629.58.
"Can we do it for an even $9,600?" He paused and, for two-10ths of a second, looked annoyed. "I'm not going to argue over $30." Boom.
Final Attempt: Bag of chips I began thinking again about those convenience stores raking in that 30% margin on chips. What kind of sucker did they take me for? So, the next day, I grabbed my coat and walked over to my local store, a wonderland of overpriced Doritos and Lay's. I grabbed two small bags of salt-and-vinegar chips and a pack of Excel gum. "I'll give you $4 for the lot," I said to the cashier. He looked stunned. "Four dollars," I repeated. Just like the watch salesman had done, the cashier produced a calculator, punched in some numbers and held it up to show me: $0.18. "This is what you can bring with you next time," he said. "I'm not sure there's going to be a next time," I shot back. "I'm going out of town, for a very long time."
"That's okay," he said. "Bring it with you when you come back." It had come to this: He would pretend to "loan" me the money, and I would pretend that I would pay him back. For a moment, I considered resisting, but it hit me: All prices are pretend. The only real price is what someone is willing to pay. This guy knew it, too. He was willing to part with a few cents so long as it was clear I was squeaking through on a wink, a loophole, an out-of-court settlement. He might have salvaged his pride, but I got the deal.