Cents & Nonsense:Irish consumers are paying a high price for being unwilling to haggle, writes Margaret E. Ward
How much are those shoes?
€100.
Do they go on sale tomorrow for €75?
Yes.
Okay, I'll give you €75 for them now.
What? They cost €100 today.
I might not be in town tomorrow and they are an unusual size, a 35. I'll give you €75 in cash.
No, it doesn't work that way.
You might not sell them tomorrow. I'll give you €75 cash.
No. (Looks around for help.)
Okay, see you next week.
A week later.
Hi, I see you still haven't sold those shoes for €75. Do they go on sale tomorrow for €37.50?
(Nods head.)
Here it is. (Holds out two bills - a €20 and a €10 - and €7.50 in coins.)
No! They cost €75 today. Where is my manager?
Brilliant. Can she authorise an early sale?
(Huffs and walks away.)
A week later at cash register.
Are these shoes really €19.99? What a bargain. (Pays.) Thanks!
Did you cringe reading that? The script reflects an extreme experiment conducted in a major department store to test the haggling appetite of the Irish retailer. Needless to say, they weren't very hungry. In most countries, retailers who refuse €75 to receive €19.99 two weeks later soon go out of business.
This true story, conducted by someone with no scientific training whatsoever (me), reflects a very embarrassing Irish problem. It's not antisocial or anything - just plain silly. We are generally incapable of negotiating the best deal, haggling or driving a hard bargain when we make purchases. The whole thing is mortifying. Bargaining with a department store salesperson? Complete insanity.
In many countries, haggling is part of the social fabric. Trading is no fun without a bit of banter and mindgames. A "let's make a deal" arrangement ensures both parties walk away satisfied.
The consequences of our dirty-little-not-so-secret problem are fairly amusing. On average, we pay 25 per cent more than our European counterparts for food and non-alcoholic beverages, according to a recently released survey of 37 countries including the EU member states.
The Eurostat price survey compares a typical basket of food and drink and it found that we are the most expensive place for these goods in Europe after Denmark. Throw in alcohol and we pay an incredible 81 per cent more than anyone else in Europe. That's fine, so.
Domestic and foreign businesses love the Irish consumer. We are willing to pay much to receive little. We've been treated so badly, for so long, by Irish service providers that we are only too delighted with a few crumbs of customer service from new providers. Once newcomers attract enough customers, they tend to increase their costs, and profits, to the sweet levels enjoyed by Irish retailers.
Higher Irish retail prices are often justified by transportation costs to an island. The last time I checked, several countries in Europe were islands or included islands too. They still don't pay the crazy prices that we do. In any case, the Irish shopping basket survey features some higher-priced items that were grown or produced here, so the island argument simply does not ring true.
What about higher Irish labour costs? We have comparable, or lower, pay than other EU states, but our consumer prices remain high. The Labour Party has asked the National Consumer Agency to examine why prices for foodstuffs here are far higher than those in other EU countries where workers are earning the same amounts.
Our unwillingness to bargain is often reflected by our politicians. Dublin City Council recently struck a deal with advertising company JC Decaux for 500 public low-cost bicycles in 25 locations. The company will also provide four public lavatories, maps and signposts. In exchange, the council will provide 120 permanent advertising billboards for the company. It was reported that a similar deal gave Paris 20,600 bikes in 2007 in return for 1,628 billboards. The French capital is also charging the company an annual rent of more than €2,000 for each site over a 10-year period. Sounds like the French know all about haggling, or marchandage.
Our neighbours excel in the price negotiation game; until we take this challenge seriously, we'll always be overcharged for goods and services. If an Olympics of economic negotiation existed, our team wouldn't have the proper equipment, facilities or skills needed to enter.
It's time to propose a national training programme to ensure our consumer athletes make the cut. It's time to start a haggling master class in all secondary schools in the State. Who should teach it?
Margaret E Ward is a journalist specialising in personal finance and consumer issues. She is also a director of Clear Ink, the clear English specialists
