A Financial Education Event
 

Polite Bargaining – 8 Ways to Negotiate on Everything

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My longtime friend, Edith and I found heaven on earth this past weekend and we were determined to milk it for all it was worth. Milk chocolate that is! We took a day trip to Chocolate World in Hershey, PA from her new house in Mechanicsburg and we racked up the discounts all day. There was a Groupon for four special events: a chocolate tasting, the 4D chocolate experience, a trolley ride and build your own candy bar. We saved 30% on those bundled tickets.

Chocoholics forever 

When we had lunch and bought tons of candy to take to our chocoholic friends and family, we got a military discount. When we left, we were astonished to realize that our 3 hours of free parking had grown to $45 for the 6 hours we were there! When we went to pay, Edith (who has 20+ years of military service) asked for a veteran’s discount and we breezed through the exit with a 100% parking discount. We were on a sugar high and a savings high as well! 

My grandma Laudeman used to quote a Bible verse that has stuck with me throughout my whole life: “you have not because you ask not.”

Even though I was a shy person growing up, I was never shy about parting with less of my hard-earned money if there was a chance I could save some bucks.

So, how do you bargain in every day matters without embarrassing yourself or your family? Consumer Reports says that 89% of those who regularly ask for discounts get a “yes” on that discount at least once. Those are good odds.

Here are 8 tried and true ways that can help you become a polite negotiator.  

Everything Is Fair Game – Almost everything in retail goes on sale at some point, so why not try to create your own sale? A retailer may not want to give the sale to everyone, but they may give you a discount if they are still making a profit. Ask the manager if the item has recently been on sale, if it is going on sale soon or if they can sell it at a discount. One college student in Chicago routinely asks for the “good guy discount” because he’s a good guy and they’ll be a good guy if they give him a discount. If you’re military, use the Scout app to find those discounts. Don’t forget the classic money saver, RetailMeNot for additional savings.

Find Something Wrong – A makeup smudge, a missing button or a slight hole along a seam that is easily repaired are all good reasons for a big discount. Show the sales clerk or manager the damaged area and ask for a 30% discount, you can settle for less, but ask for more since it can’t be sold as brand new.

Do Your Research – Comparison shop online using apps like Amazon which has a barcode scanner that you can use when you’re in a store to immediately find the item on Amazon and check its price. Just choose the camera icon next to the search bar and hold it over a barcode. You can do the same thing with Walmart Savings Catcher, which is a part of their regular app. Show the manager the comparison price and ask if they will match it. Check out Yelp to also get check in discounts and review the vendor.

Use Your Expertise – If you are a geek at an electronics store or at a gaming outlet, talk with the sales person and capitalize on your mutual passion for the products. But don’t be a bore and inundate them with a one-way monologue. Instead, build a rapport with the sales person by asking them questions and letting them be the expert they are. You’ll come across as a qualified buyer who is worthy of a discounted price.

Don’t Be Intimidated by Professionals with Titles – Just because someone is an MD, CPA, or a lawyer doesn’t mean you can’t get a discount. One lady was told her eye surgery was going to be 10K and she didn’t have insurance coverage for the procedure. She told the doctor that it was too much and “could he work with her to get it for less?” He told her that besides the big city practice he had (where she saw him) he also had a smaller office in a neighboring smaller city. If she went to that smaller office, he would reduced his fee to $1000, use the smaller clinic that charged a lot less than the hospital surgery room and they got a discounted rate on the anesthesiologist as well. The new price on the surgery? $2800

Buy Everything in Bulk—Even Services! It’s hard for most vendors to turn down cold, hard, cash. I have learned to negotiate paying for services in advance to save even more. These would be known vendors you work with frequently and trust. At my mail and more store where I have a PO Box, I paid for a year and asked for a deal I saw elsewhere where they offered 2 months for free by paying the full year—he gave it to me in seconds. For haircuts, spa treatments, and massage treatments, I’ll prepay anywhere from 5 to 10 services at a 30% discount. Then we keep up with services as we go along, counting down to the next bulk payment. This works especially well for services you know you will get regularly.

Get Discounts on Existing Service by Mentioning the C Word – Take those sale circulars you get in the mail, are hanging on your door, or you find in the paper and call your existing provider to renegotiate your current service. Whether you are getting cable service, cell phone service, entomology or house cleaning services. Call your current provider, tell them you want to “cancel” or talk to the cancellations department. You’ll likely be transferred to a department that has more authority to offer you freebies to keep your business. If you mention the introductory pricing from one of their competitors, you might not get that exact price, but you could use it as leverage to get deeper discounts on your current service.

Be Willing to Walk Away- Whether you are in a department store or a Turkish bazaar, decide ahead of time what your “comfortable” price is for the goods or service you are negotiating. Decide this ahead of time so you won’t get caught up in the moment. My favorite words, when discussing prices, are: “I don’t feel good about that price.” Then the seller usually tries to find out what price I would feel good about. I’ve often been stopped while walking away with a lower price that will seal the deal. And if I’m not followed out with the promise of a bargain? That’s OK, too, I can feel good about walking away if I don’t get the price that floats my boat!   

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I have a friend who is a newly single mom and her part time job is making phone calls to get discounts on existing payments she must make. We figured she is earning about $50/ per hour for her time investment. She has talked to utility providers, mortgage bankers, insurance companies and the city to get free items such as light bulbs, a/c filters, a refrigerator, a swamp cooler (also installed free), low moisture landscaping and much more. She’s a firm believer in “you have not because you ask not.”

What’s your bargaining story? Let me hear from you!

Counterfeit Products — Deals or Dangerous Duds?

 

I was given a designer purse as a birthday gift and was so thrilled until one of my other friends pointed out that the nameplate should say “Prada” not “Proda.”  So my Prada was a Nada, which was embarrassing, but it wasn’t life threatening as other counterfeit products are. For example, the third most commonly copied product is drugs. The U. S. Customs department said that agents seized 24% more shipments of counterfeit goods last year (2011) than the previous year. In fact, fake purses didn’t even make the top ten list of these kinds of bogus products.

Top 10 Counterfeit Products

 

  1. Electronics
  2. Shoes
  3. Drugs
  4. CDs and DVDs
  5. Clothing
  6. Perfume
  7. Watches
  8. Cigarettes
  9. Computer Hardware
  10. Toys and Games

 

The Food and Drug Administration found fake versions of the cancer drug Avastin that made their way into doctors offices and in two cases, consumers received counterfeit versions of the attention deficit disorder drug Adderall. A mom noticed the misspelled label and alerted authorities. Way to go, mom, I guess a secondary clue was that junior was bouncing off the walls instead of calmly reading a book.

 

The Electrical Safety Foundation International says that there have been more than 1 million counterfeit electrical products recalled in recent years to include extension cords, batteries and power strips. These fake versions can cause fires and destroy devices.

 

The most popular knock off is electronics where the Gallup Consulting group found that 64% of counterfeit electrical products are purchased from legitimate shops and retailers! This includes iPhones, iPads and iPods. Phony apple stores abound in China and Hong Kong—the country that accounts for 80% of the value of counterfeit goods.  There was one industrious crook in America who set up a fake Apple storefront online and sold thousands of products before he was caught.

 

Don’t think that buying fake shampoo, toothpaste, or perfume constitutes getting a good deal either. These phony versions of branded personal care products can contact caustic chemicals that can harm the unsuspecting public.

 

Spotting the Deal that’s Really a Dud

 

There are ways to know whether you are getting the real deal or not.

  • Look for misspelled words and incorrect grammar on products, packaging and websites.  It might be a good idea to invite your 7th grade English teach to go shopping with you.
  • Beware of packaging, websites and products that don’t include company names, toll free numbers or other contact info. In fact, you can whip out your legitimate iPhone and call the toll free numbers on the product to see if they work or not.
  • If an item doesn’t come with a product manual that contains safety warnings and instructions for use and maintenance, then it’s probably a dud.
  • Don’t ever buy toys, anything electrical or items for children from flea markets or dollar stores that don’t allow returns.
  • Watch out for fake UL marks. The legitimate one includes “UL” in a circle, the word “LISTED” in all caps, the control or issue number and what the product is.

When in doubt, go to the Better Business Bureau www.bbb.org  or the Federal Trade Commission www.ftc.gov to see if there’s been an alert listed for the product you are purchasing

 

Ellie Kay

America’s Family Financial Expert (R)

Invest Now and Save Later! What’s worth it and What’s Not?


I was recently on ABC News, Good Money Show, talking about whether you should buy a hybrid, that extended warranty or a programmable thermostat–are they really worth it?

Consumers in a post recession economy are constantly looking for ways to save money. In some cases, there’s an upfront investment required in order to save more in the long run. Should you ante up now on the promise that the investment will pay off later? Today, I’m going to answer your questions about when to invest now in order to save later and when you should pass or just say “no.”

Q. When consumers consider purchasing a product that carries a good faith promise of “invest a little money now and save big money down the road” how can you tell which investments are worth the cash and which are scams?

ELLIE: Whenever there is a post recession economy, there is also going to be a proliferation of those unscrupulous individuals who will try to take advantage of a consumer who is out to save money and cut expenses. There is a difference between fraud, which is illegal and punishable by law and the empty promise, which a salesman might make to close the deal. Before you sign the dotted line with a solar panel sales company, check them out on the Better Business Bureau site. But just because there are no complaints doesn’t mean it’s a legitimate business. Ask for references, don’t give into pressure sales, never respond to an email inquiry, and guard your personal information.

Q. Let’s go down the list of common purchases that promise to save us money in the long run if we invest a little money now. Let’s start with a simple programmable thermostat that costs around $50. Is it worth it?

ELLIE: The average family spends $2700 a year on home energy and nearly half of that goes to heat or cool their home. A programmable thermostat is easy to install and should save you around $180 a year, so you’ll recover that investment in about four months. This is a “must have” purchase for every home.

Q. What about a hybrid car? The promise is that we will save enough on gas to recoup the extra cost of purchasing the car. How much more do these cars costs and do you think that it’s worth the additional expense?

ELLIE: If you buy a hybrid, you’ll pay 20 to 30% more than a nonhybrid counterpart. The answer to this question is Yes and No. Yes, if you buy a less expensive hybrid like a Toyota Prius (which starts at $22,000) and if you put 20K+ miles on your car every year. You’d also need to do mostly city driving for this to be worth it. No, it wouldn’t be worth it if you buy a more expensive hybrid, don’t put as many miles on it or if gas prices are under $4 a gallon.

Q. I use my laptop computer a lot and I’ve always bought an extended warranty on it because I want to make sure I can save on repairs. I spent about $100 for my laptop warranty for a two year extended warranty. Did I do the right thing?

ELLIE: If you have an expensive laptop ($1000 or more), then you did the right thing because laptops cost more to service than desktop computers. But if you bought a $400 desktop, chances are you can fix a lot of those problems yourself—they are very user friendly. So in the case of an inexpensive desktop, it would probably be best to just pass on buying an extended warranty.

Q. This past week the Mortgage Bankers Association released mixed mortgage rates. An average 30 year mortgage increased to 4.82% and the average 15 year mortgage rate was 4.23%. A big question on homeowner’s minds is: should I pursue a mortgage refinance? Ellie, when the average refi costs anywhere from 2% to 3% of the total loan, when is it a good idea to refinance?

ELLIE: There’s a good rule of thumb when it comes to refinancing your home. If you can get at least a full one percent break from the interest rate you’re now paying and if you do not plan to move for the next 3 to 5 years, then there probably won’t be a better time to refinance. Just make sure that you crunch the numbers, using my mortgage refi tool at elliekay.com and be sure you shop around with different lenders such as INGDirect.com, wellsfargo.com, and bankrate.com. Get a GFE (Good faith estimate) up front and don’t let them add the closing costs to the back end of your loan because you would be paying interest on your closing costs and that negates a good portion of the value of the refi.

Q. Summer is here and I’ve always heard that planting your own garden can not only yield great tasting fresh produce, but you can also save a lot of money. There’s also CSA (community sponsored agriculture) programs that allow members to purchase shares and get weekly produce from specific farms. Are these a good idea?

ELLIE: You’re going to pay around $70 to plant your own garden and it will cost around $450 to purchase a 12 to 15 week CSA share So the answer is “yes” this will save you money if you want to invest 5 hours a week on your own garden. If you go the CSA route, the breakeven point is spending more than $33 a week on produce. One other option is to split your efforts with a friend or neighbor. You can share a local garden or you can each go in on a CSA share (paying $225 each instead of the $450 for the full share). Plus, you’ll get some healthy and super fresh results!

Q. We’re hearing a lot about energy star appliances such as refrigerators and washing machines. They promise to save us 40% on energy and water bills but sometimes cost 70% more than non-Energy Star certified. Is it worth it to replace your existing appliance?

ELLIE: If you have to replace that appliance anyway and you shop around, then yes it can be a great example of spend now and save later. Let’s take the example of a washing machine. You have an older top loading model that costs around $44/ year in energy. An Energy Star rated front loader (such as the Frigidaire Affinity, 3.5 cubic foot model) costs only $18 per year in energy (gas or electricity). But, it also saves 40% on water, you use less detergent, the clothes come out less damp, which means less time in the dryer. All these additional savings, including the savings of around 7,000 gallons for an average sized family means that this is a good purchase. Plus, if you go to www.energysavers.gov , you’ll find a list of appliance rebates and tax credits that are available for Energy Star rated appliances in your state!

Q. What about credit card balance transfers. There are still a lot of offers out there that promise to save consumers money with a lower interest rate. It can cost up to 5% of your credit card balance. Every financial expert has an opinion on this. What’s yours?

ELLIE: I’m not a big fan of credit card balance transfers and it’s not just because of the transfer fee. I’ve seen too many “hoppers” who transfer balances frequently, chasing the lower interest rates when the existing introductory rate expires. I have an online calculator at elliekay.com that can help you determine how much money you would save in a balance transfer. A lot of these offers are for consumers that open a new card and when you’re opening multiple new cards and closing others down, just to chase a lower interest rate, you risk deteriorating your FICO, or credit score. So unless you’re going from an 18+% rate down to a fixed 5% rate (plus the transfer fee) and chances are not good you’re going to find that kind of good deal—then just pass.

Ellie Kay
America’s Family Financial Expert (R)
www.elliekay.com