Money Saving Tip: Ask for a Discount and Use Cash

Here's a great money saving tip (or two depending on how you look at it) that works especially well for mid- to high-priced items.

Many retailers are willing to sell an item for less than the listed price, but most consumers don’t think of asking.  With mark-ups of 20-100%, stores have plenty of room to lower prices and still make money.  So ask for a discount.  Also, be knowledgeable.  Come armed with competitive prices from other stores or the internet.  And if you’re not satisfied, use the greatest power you have -- walk away.

One effective technique is to offer cash when negotiating.  Nancy Dunnan points out that “retailers, restaurants, and hotels pay 2% to 5% to the credit card company when you use your card.  If you pay cash, bargain for a discount.” But 2% to 5% is just a start. There’s something magical about cash that just makes people want it.  The powerful sight of five $100 bills for that $750 couch will be hard for many managers to refuse.

Dave Ramsey, best-selling author of Financial Peace, wholeheartedly recommends bargaining with cash.  And so he should.  Ramsey bought his three-year-old van for $4,000 below wholesale book value simply by “laying out sixty $100 bills in front of the seller.”  As Ramsey placed the last bill down, the seller scooped them up and said they had a deal.  Kelly Talcott from Nashville, Tennessee offered $350 cash for a $500 mattress.  The combination of a slow sales season for bedding (the holidays) and the offer of cash was enough for the salesman to accept immediately.  Talcott then got him to throw in bed rails and delivery for free.

Comments

[nickel]

While asking for a discount is common (and probably good) advice, I'd be interested in seeing a list of the types of places that people have tried this and what kind of luck they've had. For example, if you did this at a place like Target or Wal-Mart they'd probably laugh you out of the store (unless you were asking for 10% off a floor model, or some such). Anyway, I did this just last night at Lowe's when the washing machine that I wanted to buy was out of stock. They gave me the next model up for the same price. That was not, however, a straightup request for a lower price just because I thought the price was too high -- I had a 'good' reason for asking.
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http://www.fivecentnickel.com/

[Steve Howard]

Last year we went shopping for a baby grand piano, and we tried the approach of offering cash to see if the seller's would lower their price. To my surprise, almost none seemed to want to give me a deal for using cash. I tried to explain to them that I was saving them money by using cash, but they didn't seem to cara and offered no explanation for it. In the end, we bargained with a guy and got a good deal, but I wasn't real sure if the cash made much of a difference.

[geoff]

It's always nice to have someone else confirm stuff you already know or had suspicions about.

Nickel: I went to Home Depot with the intent to buy a fridge, washer and dryer and an oven. Before I even started talking with the sales rep I asked if there was a way that I could get a discount. At the time he said that he'd have to look into it, but once all was said and done he gave me one of his 10% friends/family coupons that *all* Home Depot workers have. I knew about this, which is why I went to the Depot.

In another situation I went to buy a bicycle that I knew was cheaper in a town about an hour south of where I lived. I could have gone down there to buy it, but I wanted to buy it where I lived. When I asked for the same price as in the other town the bike shop owner flipped out. Literally. He started to swear and curse and then asked me for the store that was selling the bike at that price. I gave him the name of the store and he *called* them to confirm that I was telling the truth! It was both insulting and incredible. I got my bike from them at the price I wanted but I never went back to them again. It's a shame. I had a pretty good relationship with the shop and did all my purchases there but after that incident I wouldn't bring my business there again and told all the friends that I had recommended to go there to stay away as well.