How to haggle for a bargain Christmas

We're not all comfortable doing it: some of us refuse point blank to go so far, others only try when their hands are tied - but the payoff if you don't just pay up can be huge.

Haggling is a distasteful concept to many in Australia and most of our stores are fixed-price, right? Apparently wrong.

There's a wealth of literature on how to negotiate a better deal on anything, some of the suggestions pretty extreme.

But in tighter economic times, securing a discount is pleasurable indeed - and a retailer will be more willing to acquiesce. There's no better time than the expensive Christmas period, either.

Here are five ways to drive down the price of your presents this year.

REALISE NO PRICE IS FIXED

Retailers use the concept of legitimacy to try and convince us there will be no bargaining. They do this with big, official-looking signs proclaiming prices - and very few of us stop to question such in-your-face authority.

If you are to get any concession, you have to be willing to challenge this engineered legitimacy: to ask for a deal. Negotiation Boot Camp author Ed Brodow says developing a ''negotiation consciousness'' is your biggest hurdle. You can then apply this new mindset to every facet of your finances: not just retail prices, but home-loan interest rates, insurance premiums, legal fees - just about anything you care to mention.

REALISE YOU HAVE OPTIONS

If a shop assistant knows your fridge has busted and your food is spoiling, and can see your young kids are impatient for you to make a decision, they're not going to do extra to secure your sale.

A negotiation is all about power and by disclosing so readily all of these things, you hand it straight to the vendor and significantly weaken yours.

What you instead need to do is let them know you have options, says Herb Cohen, author of You Can Negotiate Anything.

The store down the road is having a fridge sale, you're in no hurry, the model you really want is missing … perhaps even hint at leaving your precious progeny to run riot in the store for a while!

Power, or the perception of it, is an important bargaining chip.

REALISE YOU NEED KNOWLEDGE

Never start a negotiation, they say, without full possession of the facts. Is the store a big chain that's in trouble? Is it a small operation that prizes customer loyalty? This information will affect your approach.

But by far the most useful knowledge is the position of the person with whom you are negotiating. First, ensure they have the authority to bargain and second, be aware of how they are paid: if they are on commission, any sale will mean an income lift, so they will be more willing to do a deal.

This way you can tailor the negotiations so they benefit the salesperson, one of the surest ways of getting agreement.

REALISE YOU CAN BE NICE

Equally, it doesn't hurt to get the salesperson to appreciate your position. Hollywood would have us believe you have to be tough and unpleasant to get what you want, but nay say the experts.

Once you have the right strategy, for maximum benefit you should execute it with charm. Think about the common (and somewhat desperate) negotiation strategy of the bald ultimatum: it almost always puts people offside, so is rarely successful. The best negotiations are much more subtle. Get someone to buy into your position - and even like you - and you're far more likely to be able to buy at a reasonable price.

REALISE THERE ARE RISKS

You have to be prepared to walk away; to draw a line in the sand that may mean you miss out. Consider a couple who has already lost several real estate negotiations and this time truly believe they've found their dream home: fear of losing it will see them pay more than a dispassionate prospective buyer every time.

Keeping a sense of objectivity is key if you are to secure a good deal, particularly on a big ticket item like a property. Remember, there will be other opportunities.

How far you are willing to take negotiation will depend on how important it is that you save money. Your time is valuable too, and you'll need to weigh up how much of that you're willing to invest in a given transaction.

It's also worth noting that the gurus touting strategies like the above maintain that not just prices but all aspects of your life and relationships are negotiable - information that once the gifts are unwrapped this Christmas, might well help you through the myriad ''festive'' gatherings.

Nicole is the editor of afrsmartinvestor.com.au. Follow her on Twitter @NicolePedMcK.

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