Living with credit

6 easy ways to become a great price negotiator

The same strategies master negotiators use to broker multimillion-dollar business deals can also net you big discounts with retailers, financial institutions and service providers.

I interviewed Stuart Diamond, Professor Emeritus at the Wharton School at the University of Pennsylvania and author of “Getting More: How You Can Negotiate to Succeed in Work and Life.” He shared his great deal-making tips with me, and encouraged me to test them out firsthand. I have always been a bit timid about haggling, but I was surprised how fun the negotiating process can be — you don’t have to bargain like a hard-nosed car dealer — and how quickly these tips paid off. Here’s a bit of what I learned:
6 easy ways to become a great price negotiator
1. First, connect. Before asking for a deal, always ask the other person something as simple as “How’s your day?” Making small talk, or complimenting the other person’s shirt color, changes the whole tone of your transaction. Diamond says people are six times more likely to give you what you want if they have a good feeling about you. Good negotiating is about encouraging the other party to want to help you out — not bullying them for a discount.

Although I never directly asked for a discount, I decided to start making a point to chat briefly with the staff at my favorite local bakery. I also made note of employees’ names and began greeting them by name whenever I came in. Within a couple of weeks, they gave me a free lunch when there was a slight mix-up — without me even asking. Another afternoon, they gave my daughter a free loaf of bread to bring home — just because.

2. A little at a time is fine. If you don’t get the discount you want the first time, take what you can get and try again later. This strategy can work well if you’re trying to get your credit card interest rate reduced. If you call your card issuer and it only agrees to a 2 percent interest rate reduction when you had hoped for more, Diamond says to take it. Next month, call again: “My current rate is X and I’d like to pay less. What can you do for a loyal cardholder like me?” You’ll likely get another small break. Continue this incremental process and the small savings will really add up.

3. Make it about them, not you. Anticipate what the other person might get out of negotiating. In a retail environment, Diamond suggests asking, “How can we make this sale so you’ll get a bonus/compliment from your boss/gain a new, regular customer?” — whatever you think might be motivating. At work, instead of saying, “I want a raise,” ask your boss, “How can I better meet your needs so it’ll be worthwhile to give me a raise?”

When I recently opened a new home equity line of credit, I asked my loan officer about reducing the $166 in closing costs. At the same time, I asked if there was anything I could do for her in exchange — perhaps email her supervisor about the great service we were getting? The loan officer immediately offered to waive the closing costs entirely if my husband and I would accept a new, no-annual-fee credit card account. What she’d get out of it: A sales credit for initiating a second piece of business with us. Deal!

4. Seek advice. Instead of demanding a certain price or discounted service, ask, “If you were me and money was a bit tight, what would you do to get a better price here?” The other person might suggest options you hadn’t considered, says Diamond.

My husband recently tried this approach with a roofing company and a chimney repair firm. Both companies helped my husband prioritize the most important work to save us some money. The roofer even volunteered to take off $1,000, “because I do so much work in your neighborhood and having my truck at your home is good advertising.”

5. Invoke the company’s “standards.” A standard is a company’s policy, slogan or guarantee. Diamond suggests bringing it up when you’ve been wronged, or the company is a tough bargainer. If your shirt comes back from the dry cleaner damaged, for example, you could ask, “Is it your policy to send clothing back to the customer with holes that weren’t there when it came to you?” It’s pretty hard for the sales clerk to say “Yes,” to that statement, right?

We recently had trouble with an appliance repair visit. I was steaming mad, but decided to calm down and try Diamond’s strategy. I called the customer service manager and simply asked, “What’s your company’s policy when a washer is hooked up incorrectly after a repair visit and it causes water to leak onto a customer’s kitchen floor?” No anger, no accusations. I could tell the manager was actually a bit stunned that I wasn’t yelling. He asked what I thought was fair — did I need to file an insurance claim or could he just reimburse me for part of the repair visit? I agreed to a reimbursement. In the end, he actually offered me more money than I was ready to ask for!

6. Hang up (politely) and call again. This one is simple but brilliant: When dealing with a large organization like an airline, keep calling back until you get a friendly customer service rep. Even if the first five reps say they can’t waive your flight change fee, the more pleasant sixth person might say “no problem.” Be polite and persistent. You’ll be surprised at how often it works.

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