An Easy Way to Save Money

CNN Money gives us a money saving suggestion as follows:

Ask this question at checkout: "If I pay in cash, can you do better on the price?"

New federal rules that took effect last fall make it legal for merchants to give discounts to people who slap down actual greenbacks. By doing so, you're saving the merchant a credit card fee of as much as 3.5% -- so try to negotiate close to that amount off your purchase price.

Here's what I do:

• First of all, I DO NOT ask this question at the checkout register. I don't think most checkers are empowered to give discounts and the people behind you in line probably aren't going to be happy while he looks for someone to ask regarding your request.


• I don't ask for discounts in this manner at places like grocery stores, gas stations, and mass merchants. I generally don't think they would work on average purchases.


• That said, I WOULD ask at these locations if I had some sort of special purchase (probably large). Example: if I was buying five cases of macaroni and cheese for a local food bank.


• I do talk to managers/department managers/owners of businesses about a cash discount -- usually as part of the final negotiations for a product. For instance, once I have the price determined, I usually say something like, "I plan for paying for this with a credit card. If I pay in cash, can I get an extra discount?" If they give me one and the cash discount is more than 2%, I'll take it. Otherwise, I'll use the credit card since I earn 2% cash back on it (minimum).


• Some businesses will say "no" and others will say "yes" -- and there's really no harm in asking. I get a "no" about 80% of the time, so I pay with my credit card. But when I get a "yes", it's just as easy to whip out the cash.

Anyone else use this tip to save money? How has it worked for you?

Comments

[The Money Drain]

I've never heard of it for everyday purchases, only big purchases like tv's or something. It makes sense though, and I like the idea of comparing it to cash-back options with my card, which I hadn't thought of either.

I suppose I would only do it with big purchases as well, I can't see me negotiating over groceries when I always buy mostly what's on sale and with coupons anyway.

[No Debt MBA]

My family has always done a similar trick when buying cars and other large purchases by offering cash upfront to negotiate price, but I hadn't thought of using it on a slightly smaller scale. Unfortunately, the biggest of my money sinks, the IRS and business school, probably wouldn't be at all interested in this offer since they either bar or charge an additional fee for credit card usage.

[Linda]

No, I might in the future though. I do have a question: Should I ask my credit card company if they will lower the amount needed to pay my balance in full? I got in some financial issues, ran up some credit card bills and now am able to pay the cards in full. Should I try to negotiate a lower amount? Who should I talk to? Obviously the first level of customer service rep is probably not empowered to do it. My feeling is that it would be in their interest since my other option might be to not pay it and let it go into collection (they still get less plus have to pay that fee) or declare bankruptcy (not something I want to do).

[Matt]

Make sure you know the price before you buy.

I worked for s subcontractor supplier and when I person would come in and ask for a discount he would say sure we can do that. The salesman would calculate the price add 15% and then discount it 10% and show him how much the discout was. The person ended up paying more for the product than if he did not ask for a discount.

This practice was one of the reasons I left.

[Jon]

Medical bills:

I always wait until the day they are due, then call the billing department and ask what can be done with the bill or what kind of discount can I get if I choose to pay the entire amount on that day instead of setting up a payment plan (even if I have no intention of setting up a payment plan). I've found that usually any bill over $50 will get cut by 10%-25%.

[Money Beagle]

When you have work done around the house you can employ this method to save a lot. We had some trees cleared and some landscaping done a few years back and I saved a few hundred bucks on each transaction by paying cash. I suspect that some taxes were avoided here, but that's the responsibility and risk of the business owner to handle that.

[Keith]

FMF - When you say, "whip out the cash", do you mean actually dollar bills or a debit card? I rarely carry more then a twenty.

[Crystal]

I only ask this when it comes to medical bills. I've had 5-15% taken off every bill by writing a check or paying in cash. :-)

[Mark]

You can also ask for other freebies in lieu of the discount. I was buying furniture on a sale where they gave 12% off if you paid with cash, check or credit card - or you could take no-interest financing and pay 12% more. (Which to me means the financing would cost 12%, but they didn't see it that way.)

Instead of discounting the furniture, they gave me free delivery for using a check instead of the card.

[Jim]

This is off topic.

"Example: if I was buying five cases of macaroni and cheese for a local food bank"

If anyone is going to buy food at a grocery store for a food bank I'd recommend first asking if the food bank can make better use of cash. Ours can use cash to very good benefit and get more food than you could buy. Mostly money is better for them to cover the cost of handling donations from businesses that would go to waste. I don't know if most banks are like that but worth checking. Probably wouldn't apply much to individual church pantries or small food banks.

[LL]

I received a 9% discount on a sofa/loveseat set by paying in cash.

[FreebiesandDeals]

With more and more companies feeling the squeeze there are more and more willing to offer a discount for cash - as pointed out if they are small companies or you speak to someone who has the authority to arrange it. Big purchases are a definite way of getting a discount.

[Georgia]

Small items can work sometimes also. At a Walgreen's after Christmas sale one year, I asked what they would charge me for the felt stockings decorations if I bought all they had left. They were on sale for 2 for $1. They let me have all of them for 3 for $1. A pretty good deal. I did a second deal somewhat like that a year later.

I asked a large grocery chain if they would let me have 2-3 of the ceramic lighted houses (decorations) for a certain amount - lower than they were asking. They said no. I came back 2-3 weeks later and they were all on sale for less than I had offered. So, I got them as gifts for the next Christmas. Good deal for me.

[FMF]

Keith --

I mean cash.

If you know you're going to buy something, you can bring more than you normally carry.