Six Times It’s Easy to Ask for a Discount

My mom was ill this summer (she’s fine now) and had to stay in a hospital away from her home. My dad got a hotel room for $89 a night initially, but when it was apparent that his stay would be longer than expected, he asked the manager if he could get a “long-term rate”. The manager said he could and agreed to let my dad stay in the same room for $67 a night from that day forward.Simply asking for a discount is one way to save big money. But many people don’t like to ask — thinking that it’s rude or simply something that’s just not done in America. Or perhaps they’re afraid of being told “no.” Whatever the reason, this article is …

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My mom was ill this summer (she’s fine now) and had to stay in a hospital away from her home. My dad got a hotel room for $89 a night initially, but when it was apparent that his stay would be longer than expected, he asked the manager if he could get a “long-term rate”. The manager said he could and agreed to let my dad stay in the same room for $67 a night from that day forward.

Simply asking for a discount is one way to save big money. But many people don’t like to ask — thinking that it’s rude or simply something that’s just not done in America. Or perhaps they’re afraid of being told “no.” Whatever the reason, this article is for those people who are reluctant to ask for a discount. It lists six times that asking for a discount should be very easy and non-threatening.

If you’re one of those who is reluctant to ask for discounts, consider this: A national survey by Consumer Reports found that more than 90 percent of shoppers who bargained got a better price. If you want to try your hand at haggling, here are some occasions when you’re virtually guaranteed a discount just for asking:

1. When buying the floor model. Retailers often offer discounts on floor models. This is standard practice for appliances and electronics. “We fell in love with a particular refrigerator floor model at a local store,” says Suzanne Riojas of Fort Worth, Texas. “We waited a few weeks, noticed it was still for sale, then talked to the sales manager. We offered to take it that day if he would match our price. He did and we got that $2,700 refrigerator for $1,000.” A floor model might have a few dents and scratches, so carefully inspect it and confirm that you’ll get the full warranty.

Likewise, my father and I were in a store recently and an 80-inch TV was on sale (I know — 80 INCHES!!!!) It was normally just under $5,000, but was on sale because it was a floor model and the next year’s model was due in soon. My dad asked the sales clerk what else they could do and he offered 15% off that price plus another 5% if you applied for the store’s credit card (which we didn’t want to do). We weren’t really interested in the TV, but I know we could have gotten the clerk to go even lower if we had wanted to.

2. When the item or its packaging has been damaged. Retailers know that shoppers expect new products to be in perfect condition, so they are likely to accept a lower price for an item with a slight flaw or damaged package.

3. When buying in quantity. It’s a fact of retail life that when you buy more than one of something, you often get a discount. “If asked, I always give a discount when the person is buying multiple copies or has friends that want to buy as well,” says Jesse Mecham, owner of software company You Need a Budget. “They get a great product at a discount and I generate multiple sales. It’s a win for all of us.”

And this is effectively what my dad did with the hotel — he got a discount because he was going to stay there multiple nights.

4. During a slow sales period. When sales are slow, certain businesses are likely to give you an “off season” discount if you ask for it. You might get a good deal at an auto dealership in December or from a roofer in February, for example.

5. When there’s a sale on the same item in another store. Price-matching guarantees are commonplace, but even stores that don’t advertise them might match another store’s price if you show the salesperson a competitor’s advertisement with the item listed. That’s how Sandi Johnson got a discount on a vacuum cleaner. “I asked if the store would match the price of a well-known national retailer I’d seen in their circular. The store manager said they would if I could show him the flyer. It happened to be in my car, so I ran out and grabbed it, saving $55 for a two-minute trip,” she says.

This is also one method I used when I stacked multiple discounts at Lowe’s.

6. At the end of a shopping season. An end-of-season clearance sale is a good time to ask for an additional discount. “At the end of a season, we’ll sometimes offer a customer a discount on an item if it is the last of its type in stock,” says Dale Phelps, of Village Bike Shop. “It helps us move the inventory and gives the customer a price break as well.”

Most of these ideas benefit both you and the seller. So if you find a situation like the ones mentioned above, decide on a fair price, ask politely, and you might get the discount just for asking.

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Six Times It’s Easy to Ask for a Discount

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Use It Until It Breaks?

Jerry writes in:“I was reading on another blog about replacing things that work with better versions of the same item like clothes hangers. To me, it makes more sense to just keep using something until it actually breaks, then replace it, but that’s just my sense of wanting to get every last drop out of something I put my money into. What do you think?“Although Jerry didn’t mention the blog article he was referencing, I would guess that he was talking about “Does It Ever Make Sense To Replace Something That Is Functioning Properly?” over at One Frugal Girl.Anyway, Jerry makes a valid point and asks a good question. At first glance, it makes good frugal sense to continue to use an item …

via The Simple Dollar:

Jerry writes in:

“I was reading on another blog about replacing things that work with better versions of the same item like clothes hangers. To me, it makes more sense to just keep using something until it actually breaks, then replace it, but that’s just my sense of wanting to get every last drop out of something I put my money into. What do you think?“

Although Jerry didn’t mention the blog article he was referencing, I would guess that he was talking about “Does It Ever Make Sense To Replace Something That Is Functioning Properly?” over at One Frugal Girl.

Anyway, Jerry makes a valid point and asks a good question. At first glance, it makes good frugal sense to continue to use an item until it is no longer functional. Otherwise, as Jerry says, you’re not extracting the full value from that item. I am completely on board with using an item until it’s no longer usable.

The question, to me, really is about replacement. I do not think that the best time to replace an item is when it is no longer functional. In that situation, you ideally need something to perform that task that is functional, which means that you have a pretty small timeframe to make a purchase.

Ideally, when you’re buying a new item, you’ll take advantage of two things.

First, you’ll have a research opportunity. You can spend at least a bit of time figuring out what the best version of the item is as well as perhaps the best “bang for the buck” version of the item is. You can figure out things like that from reading Consumer Reports or other reputable publications and asking around in your social network.

This is an opportunity to really figure out what it is that you’re buying and isolate it down to a few options that will really work and solve your problem.

Next, you can look for sales and discounts for those specific items. This can take time, but it’s well worth it, especially if you’re shopping for a pricier item. If you can shave $50 off of the cost of the item you’re buying, it’s well worth a few internet searches every few weeks for a while or checking out sales flyers.

The end result is that you wind up with a quality item that will last for a very reasonable price.

The problem is that this process takes time. Although you can do the research fairly quickly if necessary, it does take time to wait on a sale.

If you’re buying out of necessity, you can’t wait for a sale. You’ve pushed yourself into a situation where an immediate buy borders on necessary.

Thus, for me, I try hard to identify items that may fail in the fairly near future, but still have life left in them. Those are the items that I focus on for the buying process.

If a sale on the right item happens to come up before I need a new version of that item, I’ll still go ahead and pull the trigger. Then, I’ll take the new item and store it for a while until the old one fails. I’ve done this with blenders, umbrellas, and pots and pans, among other items.

This works even for inexpensive items, like clothes hangers. If you’re like me, you’ll eventually bend a wire hanger enough so that it doesn’t hold an article of clothing well or you’ll accidentally break a plastic one on occasion. Thus, if I ever notice that our hanger count seems to be getting low, I’ll just simply watch for a sale on them and add them to the mix.

Occasionally, I’m still pushed into situations where I have to make a quick replacement purchase, but I don’t like to be in that situation. A little bit of advance planning, as described above, can help you avoid it most of the time.

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Free trials and payment plans: Innovative ways to market clean energy products in rural Uganda

Guest post by Alba Topulli.Families in rural northern Uganda who cook over open fires and use kerosene as their primary light source face numerous health and safety issues – they should be rushing to buy fuel efficient cookstoves and solar units. Why aren’t they?Evelyn is a shop owner in Kitgum, a municipality of about 60,000 people in northern Uganda. Judging from her shop, full of general merchandise, food and cold beverages, it’s not readily apparent that she also sells solar units. Yet, one solar unit did catch my eye – sitting in a far corner. The box looked as though it had been opened and closed many times as potential buyers expressed interest, but none strong enough to take the unit home.I met with Evelyn during my …

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Guest post by Alba Topulli.

Families in rural northern Uganda who cook over open fires and use kerosene as their primary light source face numerous health and safety issues – they should be rushing to buy fuel efficient cookstoves and solar units. Why aren't they?

Evelyn is a shop owner in Kitgum, a municipality of about 60,000 people in northern Uganda. Judging from her shop, full of general merchandise, food and cold beverages, it’s not readily apparent that she also sells solar units. Yet, one solar unit did catch my eye – sitting in a far corner. The box looked as though it had been opened and closed many times as potential buyers expressed interest, but none strong enough to take the unit home.

I met with Evelyn during my first week in Kitgum this summer, having just arrived for my internship with Mercy Corps. I came onboard to research financing plans that could be adopted by energy company partners to increase their network of resellers and by retailers to increase their sales broadly and to the most vulnerable households. Earlier in the week, I traveled from Uganda’s capital, Kampala, to Kitgum, a seven-hour drive.

Making my way, I couldn’t help but notice the visible impacts of the long-standing conflict between the Ugandan government and Lord’s Resistance Army. Our car bumped and lurched over the unmaintained road as we passed one neglected piece of physical infrastructure after another. But it was my first-hand, day-to-day interactions with shop owners in Kitgum that revealed the less visible impacts of conflict: the traumatic memories, the new opportunities to achieve a sustainable livelihood, and the struggle to keep markets functioning.

As I sat down with Evelyn, a bright-eyed and poised young woman, she candidly recalled the poor sales record of her solar units over the last few months since she became a retailer of solar products. Evelyn sold solar units that consisted of solar lanterns and an integrated lantern and mobile-phone charging unit. On average, she sold just one unit per month. The price tag of about 130,000 Ugandan shillings (USD $50) was certainly cause for concern for many consumers, considering the average monthly income for rural households in northern Uganda is just 117,000 shillings (USD $46), while an urban household in the same region makes about 361,000 shillings (USD $142).

These prices are in part a result of high transportation costs from the poor road infrastructure and fragmented markets characterized by inefficient and unshared distribution channels. All these factors increase the cost of doing business in the region. Aside from pricing, Evelyn mentioned other factors that seemed greater barriers to sales – consumers not fully aware of the benefits of solar units over time, including cost-savings, and trust in the product and its ability to function properly over time. A Mercy Corps solar market assessment conducted in May, 2012 found that the average household would need eight months to pay off the value of the most advanced solar unit.

As the Mercy Corps team and I listened to Evelyn and other retailers’ concerns, we determined that we needed to come up with tailored innovative financing plans that shopkeepers could use to increase sales of clean energy products.

To ease buyers' burden of purchasing clean energy products, our team developed five financing plans that retailers like Evelyn could offer. Here they are–and the results we saw:

• The “pay-by-installment” offer. The retailer would allow the consumer to pay for the solar unit in two installments over one week increments. This resulted in a 100 percent increase in sales volume over a four-week period. There were no defaults and 100 percent payment recovery.

• The “one-week free trial plus pay-by-installment” offer. The retailer would offer the product to a consumer to try out for a week for free. If the consumer found it useful and saw that they would save money, the retailer would then allow the consumer to pay in two installments over one week increments. Beyond that, consumers could return the product if unsatisfied, an unprecedented option in northern Uganda. Sales increased threefold over a four-week period, with no defaults and an 100 percent payment recovery.

• The “price discount” offer. The retailer would offer a consumer a discount of 800 shillings (USD $0.30) with the purchase of a small-sized stove; a discount of 1,900 shillings (USD $0.75) with the purchase of a medium-sized stove; and a discount of 1,000 shillings (USD $0.40) with the purchase of large-sized stove. One stove retailer adopted this offer, and it was valid for two weeks. During this time, the retailer's weekly cookstove sales increased by 167 percent.

• The “free related product” offer. This offer involved a radio advertisement which announced a giveaway: free charcoal with the purchase of a fuel-efficient charcoal cookstove. The free charcoal amount was predetermined based on the stove size purchased. This offer increased customer visits and inquiries regarding cookstoves by 388 percent and stove sales by 75 percent during the two-week promotional period.

• The “pay-by-installment plus discount” offer. The retailer would offer a customer the option of paying for a solar unit in three installments over one-week increments. But the customer could receive a discount of 5,000 shillings (USD $2) if they paid off the unit in just two installments.

The Mercy Corps team initially hoped to make the "pay-by-installment" offer a four-part payment to increase affordability to the consumer, especially for the more expensive solar units. However, retailers were reluctant to adopt the idea because of the cost of retrieving payments and other factors, like losing the liquidity needed to purchase more products to sell. Instead, we modified the offers to two installments or, at the most, three.

The offer that combined the free trial with the option of paying in installments had the most potential for increasing sales. It tackled consumer trust with the free trial period, and acknowledged consumer cash constraints by offering the option to pay in installments. Most of the retailers were interested, but they decided against participating because of the inherent risks associated with the offer. Only Evelyn saw the opportunity.

At first, Evelyn handed out all of her products during the free trial. This was a great result but it meant she ran out of stock without the cash to reinvest in new products. The trick, she learned, was to determine demand and ensure there was enough liquidity to meet it. Yet, this didn’t weaken Evelyn’s eagerness to continue promoting these products. Once she collected all outstanding payments, Evelyn immediately reinvested her profits in acquiring more solar units.

Although our research came to an end, Evelyn enthusiastically kept up the sales program. “With or without this research, we will continue with these offers,” she said. “Because they have worked for us.”

Evelyn’s enthusiasm however, was not shared by many other retailers in Kitgum. This was also the case for one of the retailers who originally agreed to participate in the research. The solar retailer who adopted the “pay-by-installment plus discount” offer stopped mid-way through his sales trial. When asked why, he said that because of drought conditions creating poor harvests and school fees that households had just finished paying, most families were allocating their resources toward basic necessities and food rather than clean energy products, despite their long-term benefits. Yet, when we asked participating retailers why they offered the financing plans in spite of these constraints, most agreed with Evelyn: they couldn't wait for the most opportune time to strengthen their business.

With forward-looking retailers like Evelyn offering financing plans to customers, clean energy products can be more affordable to the families who need them, improving their lives.

Alba Topulli is a master's student at The George Washington Univertsity in international development with a concentration in economic development. She served as an applied research analyst with Mercy Corps in the summer of 2013.

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