How to Negotiate the Best Retail Price: Baylor Expert Shares 11 Tips

Oct 22, 2018

6 min

Confidence in retail negotiations can lead to confidence in salary talks as well, management expert says

In today’s retail climate, where stores struggle to keep up with online competition and customers can compare prices with the ease of their smartphones, the price tag is just a starting point for negotiations, said a negotiation expert at Baylor University.

“No longer do you need to pay sticker price for everything you buy. The customer is now empowered to have a say in pricing, and even hourly retail workers are often empowered to give price discounts when requested,” said Emily Hunter, Ph.D., associate professor of management in Baylor University’s Hankamer School of Business, and an expert in negotiation and conflict management.

Hunter said negotiations – whether in a retail setting or in the workplace – require confidence.

“Many people are hesitant to negotiate because they don’t know how or they are worried about the other person’s reaction (Will they think I’m greedy?),” she said. “But practice can increase your confidence in your ability to negotiate. Rejection is less common than you fear, and retail stores especially are often willing to work with you.”

She offered the following tips to increase the chances of greater deals at the check-out counter.

Be nice.

First and foremost, always be kind and polite when asking for a discount in retail settings, Hunter said. You are much more likely to be successful if someone wants to help you out, as opposed to demanding a discount or raising your voice to puff up your sense of power. It’s not a power play. Instead, negotiating is a matter of give-and-take.

Find defects.

It is easier to negotiate an item if you can find something wrong with it. Most stores have a policy in place that allows cashiers and salespeople to offer a moderate discount (typically 10-15 percent), but when they offer it, be persistent and politely try to push them for more.

“I’ve negotiated a rug because it was on the sales floor and had frayed edges, a metal cabinet with a dent in the back (Who will ever see that? It’s in the back!), and clothing with a slight stain,” Hunter said. “Point out the defect to the person you are negotiating with and ask for half off.”

Look for mark-downs.

If an item is marked down or “open-box,” then ask for further discounts, Hunter advised. Remember, the store already acknowledged that the item is worth less than original price and they are likely desperate to be rid of it quickly.

“Borrow” a coupon during check-out.

When making a purchase, Hunter said she is often asked the question: “Do you have a coupon?” Instead of saying no, she said it might save some money to consider another reply.

“Whenever I’m asked this question at check-out, I reply, ‘No, do you have one I could use?’ This works more often than you might think and can result in sweet savings. No clipping required,” she said.

Prepare yourself – quickly.

When you see an item that could be a good opportunity to negotiate, Hunter said it’s best to prepare quickly with three steps. First, set a strong goal for yourself, usually in the form of a steep discount you will request. Second, set a “redline” price, the highest price you are willing to pay. Third, consider your best alternative – which might be purchasing the same item online for less – if negotiations fail.

Find a BATNA.

“In negotiation lingo, we call your best alternative your BATNA – Best Alternative to a Negotiated Agreement,” Hunter said. “In retail, it’s extremely important to shop around both at other stores and online to see if the same or a similar item is offered elsewhere for less. This can be your bargaining chip to ask for a discount.”

She explained that most big-box stores now have a price-matching policy, but it’s worth trying to go beyond the price match and ask for an additional 10 percent discount, particularly if you agree to purchase at that moment.

“Think about it from the store’s perspective,” she said. “They want to keep you from buying from major online retailers, so they might agree to a discount.”

Ask for a higher discount than you’re seeking.

Let’s say you’re seeking $200 off the price of a refrigerator. Hunter said it’s not wise to start your negotiation by asking for $200 off, because you are almost guaranteed to get less than that.

“In negotiations, both sides expect some give-and-take, and the retailer is unlikely to accept your first offer,” she said. “Start by asking for $500 off the fridge and see what they say. Even better, back up your offer by pointing out a defect, a cheaper price online for the same product or evidence of a sale at the same store that just ended.”

Pretend you own the business.

Think from the seller’s perspective, Hunter advised. Consider what the seller wants from you, the customer.

Besides the obvious answer of higher sales and profit, simply offering to write a review online could be very helpful, especially for small businesses.

“I once got a great deal on a tool cabinet because I offered to write a positive review on the customer experience survey (you know, the one you get on your receipt that few people fill out?). The manager said that would be wonderful because his store performance is assessed partly based on those customer surveys and he really needed a good review that quarter,” Hunter said.

Always negotiate furniture.

Hunter said the markup on furniture is often extremely high, as much as 80 percent, and that makes furniture a target for negotiation.

“I always negotiate when buying everything from mattresses to sofas to end tables,” she said. “Ask for big discounts at first, as you never know how desperate they are to rotate their stock. And try asking for steeper discounts if you buy multiple pieces, or buying a sofa set and getting the coffee table thrown in for free.”

Choose your opponent wisely.

When you choose to negotiate, make sure you’re dealing with the people who can make the decisions, Hunter said. Sometimes the clerks on the floor might not be the best option, so jump straight to the cashier or the manager to work with someone who has the authority to make a pricing decision.

Remember the ultimate goal.

Negotiation is not just about saving a few dollars, Hunter said. Instead, it’s about building negotiating skills.

“Negotiating in retail settings can be a helpful practice to build your confidence to negotiate more important items such as salary and work projects,” she said. “While negotiating salary and other relationship-based issues at work differs quite a bit from the strategies described here, the first step is having the confidence to ask.”

ABOUT EMILY HUNTER, PH.D.

Emily Hunter, Ph.D., associate professor of management in Baylor University's Hankamer School of Business, teaches negotiation and conflict management. Her research on employee work-family issues, workday breaks and deviant behavior has appeared in academic journals such as Journal of Applied Psychology, Journal of Management and Journal of Organizational Behavior. She is also the co-author of "Organized Innovation: A Blueprint for Renewing America's Prosperity."

ABOUT BAYLOR UNIVERSITY

Baylor University is a private Christian University and a nationally ranked research institution. The University provides a vibrant campus community for more than 17,000 students by blending interdisciplinary research with an international reputation for educational excellence and a faculty commitment to teaching and scholarship. Chartered in 1845 by the Republic of Texas through the efforts of Baptist pioneers, Baylor is the oldest continually operating University in Texas. Located in Waco, Baylor welcomes students from all 50 states and more than 80 countries to study a broad range of degrees among its 12 nationally recognized academic divisions.

ABOUT BAYLOR’S HANKAMER SCHOOL OF BUSINESS

Baylor University’s Hankamer School of Business provides a rigorous academic experience, consisting of classroom and hands-on learning, guided by Christian commitment and a global perspective. Recognized nationally for several programs, including Entrepreneurship and Accounting, the school offers 24 undergraduate and 13 graduate areas of study. Visit www.baylor.edu/businessand follow on Twitter at twitter.com/Baylor_Business.

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Emily Hunter, Ph.D.

Professor; Department Chair of Management, Hankamer School of Business

Negotiation & conflict management expert, revolutionizing the fundamentals of workplace psychology

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