The other day I received an email from a reader asking me to confirm the proper way to bargain in foreign countries. The ‘proper way’ that was mentioned is something that I’ve heard from travelers all the time.
It’s the 50% rule. And to me, the rule is wrong.
In many countries, when you buy certain items, there are often no set prices. It’s just how it works.
As a result, travelers all over the world spend time trying to figure out how much things should actually cost.
But how do we really know how much we should be paying?
Back to that oh-so-common 50% rule.
Bargain in Foreign Countries – “The 50% Rule”
This rule states that we should always take the starting price that a shopkeeper gives us and try to reduce it by 50%. We will then reach the ‘actual’ price.
However, I’ll tell you exactly why that doesn’t work.
- The starting prices given by a shopkeeper or market vendor are not always the same. Different tourists get different starting prices.
- The shopkeeper will set that price by determining how much he thinks you will pay, based on many factors.
- This is why shopkeepers all over the world ask you ‘where are you from?‘, ‘is this your first time in India/Thailand/Morocco/etc?‘ and ‘what do you do?‘. The answers to those questions help them calculate their starting price based on their experience with people from your country and with as much travel experience as you have.
So, if the real price of a silk shawl is $4 but the shopkeeper starts with $30, the 50% rule is way off.
The 50% rule only works if every single shopkeeper automatically doubles the price of an item before you start the bargaining process.
But since shopkeepers start with different prices based on what they think they can get from you in the end, that rule is useless.
If the 50% rule doesn’t work though, what does work?
Bargain in Foreign Countries – “The Better Method”
The advice I give other travelers, which involves the quick method that has always worked best for me, is this:
1. Shop around.
If you see something you want to purchase, visit 2-3 other shops nearby that sell the same thing or something similar. Ask how much it costs at each of the shops. This will give you a general idea of a true starting price for negotiations. If one shop quotes you $50, another quotes $35 and another one quotes you $20, you know the actual price is below $20.
2. Walk away.
Based on the knowledge you gain from Step 1, decide on the price that you think is fair and offer that. If the shopkeeper declines, you can simply thank them and walk away. If your price is indeed too low, the shopkeeper will let you leave. If your price is indeed doable or very close to an acceptable price, they will call you back into the shop and accept or provide one last offer.
This method is quick, efficient and it works every time.
And for those travelers who don’t like to bargain in foreign countries (which makes sense if you’re not used to it), this is an easy way to get a better price without getting too involved in the potentially awkward bargaining process.
Final Thoughts on Bargaining
- It’s not always worth bargaining. If the difference is a very small amount, it’s generally better to just accept their slightly higher price. After all, this is their business and livelihood and as a traveler, we already have enough money to have traveled to this destination in the first place. Bargaining over a few cents or even a few dollars is probably not worth it.
- In many countries, bargaining is part of business for everyone, not just something aimed at tourists. And since it’s expected, it should always be done in a polite, even-mannered way as getting angry or being rude is not how it’s supposed to work.
- You will always get ripped off. I’ve been traveling for 20+ years and I still get ripped off. It’s impossible to avoid but again, it’s usually not by a huge amount. If you’re happy with your purchase, that’s the main thing. And if you paid a little more than the ‘normal’ price, it’s really not a big deal in the end.
Safe travels and happy bargaining!
For more posts about money and travel, check out my Travel Costs category.