Hagglers welcome at stores…
"There was a New York Times article titled "Even at Megastores, Hagglers Find No Price Is Set in Stone"
I do understand that papers want to run articles of public interest. However the article "Even at Megastores, Hagglers Find No Price Is Set in Stone" (By Matt Richtel - Published: March 23, 2008) also runs the risk of hurting people. I know what you're thinking, how can it possibly hurt someone?
Now while I agree that many items in stores seem overpriced, there are many reasons for it such as overhead and shoplifting. There's a markup on everything so they can pay the store's bills and buy more goods to stock the shelves. If someone tries to haggle on a price and the store agrees ("less profit is better than none" belief), it doesn't generally matter for a few customers as they'd recoup the cost with other items, possibly that they themselves bought. However, every sale costs the company money. Even if the sale generates profit by itself, the company could have spent more money to sell it than they made (ex: 30 minutes of an employee who makes $10/hr to make a $5 profit on an item – they "broke even").
The problem comes is with the article, more people are going to assume that they can haggle for prices anywhere. And that's a problem since they can't. More customers demanding lower prices mean more time taken out to negotiate. This means you are either understaffed (resulting in complaints and demands for discounts for the inconvenience), or more employees being hired which will cause prices to increase drastically. Why? Well for one they have to increase prices to give themselves more "haggle room" and two so that when the price is haggled down to the original selling price, they can pay for all the new employees that were hired to do the haggling! This leads to another problem. You walk into a store and find something noticeably more expensive than a competitor. What do you do? Either you leave and go to the competitor, or you haggle. Which means prices can't be increased a lot, so no new employees – so longer wait times. Assuming everything goes smoothly, you'll have a longer checkout time – five people in line, all prices have to be manually edited. A simple 20 minute visit could take you an hour.
Now let's say a store has two customers that are both buying the same TV. They enter electronics at different times for the haggle – but hit the checkouts at the same time. "Frank" gets $500 off the TV. "Charlie" only gets $450 off (you know, since haggling doesn't yield the same price off for everyone – unless it's a "fake haggle" where the store has a set price, and a second set price that's the actual price they want). Now when at the register, Charlie realizes that Frank got a better deal, so he demands another $50 off, and files a complaint against the employee (since you know, the employee probably said it was as low as they could go). Cashier is authorized to make the change (since the computer says so), and they're both happy. Frank goes home and discovers the TV's damaged so he returns it – and requests another discount because he had to make two trips for it. This would mean that the TV was marked up not just $500, but closer to $750-1000 over their cost – so they could haggle if needed. But it doesn't seem too bad.
But let's take this same situation from the employee's point of view.
Frank walks into electronics and sees a 27" widescreen LCD for $2500. He knows he saw the "exact same thing" at the store a few weeks ago for only $1200. And here the problem starts. Now I'll assume that the employee isn't busy with another customer and everything goes smoothly overall, which isn't always the case.
Now, after the employee just got ripped a new one by one customer, she gets to get to deal with a few hundred more. If they heard that you could haggle – guess what they'd want to do? And guess what happens to the wait times? Figure out what will happen next? Demands for free or greater-discounted stuff for the long wait. All the while the employees are the target of the customer's rage. And they're not paid enough for it.
Most customers are generally kind to employees. But there's a percentage that aren't. Now that people have discovered that haggling can be done at some stores, they'll just assume it can be done anywhere ("But company X does it! If you don't do it I'll go there!"). They'll start being mean to employees, anything they can think of to make sure they get a discount. People complain now that it's hard to find employees to help you – imagine how hard it'd be if almost everyone needs an employee every time they visit the store. It'd reach a point that anything shy of one employee per customer and you'll have complaints (demanding more discounts!). Brick and mortar stores will have huge operating costs that they won't be able to pass on to customers, since the customers will just demand it be removed or "they'll go somewhere else". They wouldn't hire more people since they couldn't cover the costs. It'd just make more hassle and an overall hostile work environment.
While biased since it's an "employee customer horror story" site, you may want to visit http://www.customerssuck.com/board/ -- you'll get some ideas as to what employees deal with everyday, or every week for the lucky ones.
And that leads to the point of how that article will hurt people in one sentence: Many companies won't allow haggling for the reasons I put in here – and the customers will take it out on the employees.
I know that article was just trying to let people know of a "hidden secret" of sorts. But all it's going to do is hurt people. And like I said, a few people wanting to haggle is no big deal. But if your entire clientele realizes it – you've got some major problems. And from me visiting those stores listed in the article I can say I had a hard enough time getting help as it was with no one haggling. Now I don't know if I even want to visit them.
I do understand that papers want to run articles of public interest. However the article "Even at Megastores, Hagglers Find No Price Is Set in Stone" (By Matt Richtel - Published: March 23, 2008) also runs the risk of hurting people. I know what you're thinking, how can it possibly hurt someone?
Now while I agree that many items in stores seem overpriced, there are many reasons for it such as overhead and shoplifting. There's a markup on everything so they can pay the store's bills and buy more goods to stock the shelves. If someone tries to haggle on a price and the store agrees ("less profit is better than none" belief), it doesn't generally matter for a few customers as they'd recoup the cost with other items, possibly that they themselves bought. However, every sale costs the company money. Even if the sale generates profit by itself, the company could have spent more money to sell it than they made (ex: 30 minutes of an employee who makes $10/hr to make a $5 profit on an item – they "broke even").
The problem comes is with the article, more people are going to assume that they can haggle for prices anywhere. And that's a problem since they can't. More customers demanding lower prices mean more time taken out to negotiate. This means you are either understaffed (resulting in complaints and demands for discounts for the inconvenience), or more employees being hired which will cause prices to increase drastically. Why? Well for one they have to increase prices to give themselves more "haggle room" and two so that when the price is haggled down to the original selling price, they can pay for all the new employees that were hired to do the haggling! This leads to another problem. You walk into a store and find something noticeably more expensive than a competitor. What do you do? Either you leave and go to the competitor, or you haggle. Which means prices can't be increased a lot, so no new employees – so longer wait times. Assuming everything goes smoothly, you'll have a longer checkout time – five people in line, all prices have to be manually edited. A simple 20 minute visit could take you an hour.
Now let's say a store has two customers that are both buying the same TV. They enter electronics at different times for the haggle – but hit the checkouts at the same time. "Frank" gets $500 off the TV. "Charlie" only gets $450 off (you know, since haggling doesn't yield the same price off for everyone – unless it's a "fake haggle" where the store has a set price, and a second set price that's the actual price they want). Now when at the register, Charlie realizes that Frank got a better deal, so he demands another $50 off, and files a complaint against the employee (since you know, the employee probably said it was as low as they could go). Cashier is authorized to make the change (since the computer says so), and they're both happy. Frank goes home and discovers the TV's damaged so he returns it – and requests another discount because he had to make two trips for it. This would mean that the TV was marked up not just $500, but closer to $750-1000 over their cost – so they could haggle if needed. But it doesn't seem too bad.
But let's take this same situation from the employee's point of view.
Frank walks into electronics and sees a 27" widescreen LCD for $2500. He knows he saw the "exact same thing" at the store a few weeks ago for only $1200. And here the problem starts. Now I'll assume that the employee isn't busy with another customer and everything goes smoothly overall, which isn't always the case.
Frank: "Excuse me. I need to talk to someone about this TV."
Employee: "How can I help you?"
Frank: "I saw this exact same TV in here a few weeks ago and it was only $1200! So that's what I want to pay."
Employee: "We just got this TV in last week. It's a new model that (lists new features). We don't have the old one anymore."
(At this point Frank would complain, assuming employee is lying, accuse the employee of such, etc)
Frank: "Then just give me a thousand off this one."
(Employee checks computer, it's marked up $750 – i.e. only $750 can be taken off without a loss)
Employee: "We can take off $250."
Frank: "That's unacceptable! The other model was only $1200, and I should be able to get this newer one for just a bit more!"
(Insert a few minutes of complaints and explanations)
Employee (assuming a manager didn't have to step in): "We can take off $750."
Frank: "Fine." (leaves with TV in a huff).
Now, after the employee just got ripped a new one by one customer, she gets to get to deal with a few hundred more. If they heard that you could haggle – guess what they'd want to do? And guess what happens to the wait times? Figure out what will happen next? Demands for free or greater-discounted stuff for the long wait. All the while the employees are the target of the customer's rage. And they're not paid enough for it.
Most customers are generally kind to employees. But there's a percentage that aren't. Now that people have discovered that haggling can be done at some stores, they'll just assume it can be done anywhere ("But company X does it! If you don't do it I'll go there!"). They'll start being mean to employees, anything they can think of to make sure they get a discount. People complain now that it's hard to find employees to help you – imagine how hard it'd be if almost everyone needs an employee every time they visit the store. It'd reach a point that anything shy of one employee per customer and you'll have complaints (demanding more discounts!). Brick and mortar stores will have huge operating costs that they won't be able to pass on to customers, since the customers will just demand it be removed or "they'll go somewhere else". They wouldn't hire more people since they couldn't cover the costs. It'd just make more hassle and an overall hostile work environment.
While biased since it's an "employee customer horror story" site, you may want to visit http://www.customerssuck.com/board/ -- you'll get some ideas as to what employees deal with everyday, or every week for the lucky ones.
And that leads to the point of how that article will hurt people in one sentence: Many companies won't allow haggling for the reasons I put in here – and the customers will take it out on the employees.
I know that article was just trying to let people know of a "hidden secret" of sorts. But all it's going to do is hurt people. And like I said, a few people wanting to haggle is no big deal. But if your entire clientele realizes it – you've got some major problems. And from me visiting those stores listed in the article I can say I had a hard enough time getting help as it was with no one haggling. Now I don't know if I even want to visit them.
posted by JL Rodgers | 1:32 PM
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