“You mean I can ask for a discount,? someone asked me recently when I shared how I got 12% off my electricity bill. Yep. You most certainly can. And not just off your electricity bill.
I’m always amazed at how polite we are here in Australia when it comes to spending money. Someone quotes a price and we just say, “oh, okay then” and hand over cash. Maybe we have post-purchase dissonance but rarely do we say anything if we think the price is too high. In fact, I have noticed in Australia that (compared with, say, my Chinese speaking friends) we rarely talk about money or prices or salaries or anything that might be a bit, ahh, embarrassing. We just hand over the cash (or the credit card).
Last year I was at a dinner party where a woman was talking about her experience of buying a property off the plan. “Did you negotiate a good price,” I asked? I was curious because I had bought an apartment a month beforehand and, with the guidance of my mother, had negotiated shrewdly yet fairly and achieved a good result.
“No,” she said. “The agent advised me that it was the market price. My Dad said it was a good price, so I bought it.”
Did I mention I was at a dinner party? I did not want to be impolite, so I said nothing.
But since we are all frugalistas here, let me just say this: you are bloody stupid if you pay full price when you don’t have to.
Now, of course, there are times when you can’t avoid paying full price or where you choose to pay full price. I often pay more than just bulk billing if there is a particular doctor or health practitioner I want to see. I pay full price at the supermarket if I don’t have time to go to ALDI or Costo or if have no other options. I pay full price if it is late at night and I need to get medication for one of my kids at a nearby pharmacy. I pay full price if I buy something on impulse. I pay full price if is to much of a hassle to negotiate a better deal. I pay full price if I am going to an event with family or work colleagues that I didn’t organise and over which I have no say about the price. I pay full price on clothing if there is something that I really like and that looks good on me. I pay full price if I get really good service at a shop and know that there will be good after sales care. I pay full price on concert tickets if it is a band or performer I really want to see.
In general, though, I avoid paying full price whenever I can.
I am amazed, though, at how many people still pay full price consistently especially when there are huge savings to be made. What is holding them back? Here are a few obstacles:
- Lack of time. Scouting for deals involves time. Once you get in the habit, like me, comparing becomes part of the process. After a while, you get a sense of where to go to find the best deals.
- You consider it boring. Well, not to me. Neil and I actually find that it is fun to compare the best deal. We like to think of it as a challenge or competition.
- Lack of information. In our internet age, this is becoming much less of an obstacle, but sometimes we just don’t have the information we need to make an informed decision. Or maybe we are scared to admit that we don’t know enough about the subject matter? I certainly felt a little inadequate when I was thinking about which NBN plan to choose.
- Fear of the unknown. I was talking to my mother recently about her mobile plan. I suggested a few cheaper options, but she chooses to remain with Telstra because the ‘boys’ there really look after her. There is one young salesman in particular who is charming and who listens. She is unsure about technical things and she feels safe there. It can be scary to move beyond your comfort zone. I’m a bit like that with computer and car things.
- Habit. So many people pay full price because they have always shopped at the same supermarket, they have always banked at the same bank, or they have always gone to the shops rather than buying certain things online. The world is changing and it is shaking up how we purchase things – the rise in e-commerce, including the arrival of Amazon Australia – is part of that.
- Fear of people thinking you are cheap or that you don’t have much money. Would you go on a date with a man who uses a voucher? I would, but I am rare. Honestly, who cares if you use a voucher at a restaurant? When I do, I often end up talking to the staff about the great deals I regularly get and tell them how they can do the same. And who really cares if you have marked down items in your supermarket trolley? Maybe they are looking at you with envy at your good deals rather than feeling sorry for you. People are probably are more likely to think negatively about you if you live an extravagant lifestyle that you flaunt. You might feel like you are all cool but behind your back, they are wondering about the debt you are in or if you are running an illegal drug ring to finance that lifestyle – Australian tall poppy syndrome at work.
- Brand loyalty. Companies pay a fortune on marketing to build brand loyalty. In some cases, a particular brand really is very good. But often a generic product will be just as good if not better. Have you ever considered as you walk through a supermarket that cheaper products are often produced in the same factory as well known brand ones? Sometimes the address on the can or packet will give it away. It is similar with motor vehicles: sometimes cheaper Asian vehicles have components such as motors that are very similar to luxury European models, but for a cheaper price. I gave up brand loyalty a long time ago, and it seems I am not the only one. Ruslan Kogan, aka founder of Kogan.com, believes that “there’s a huge wave of change happening in the world, and people now care a lot more about the product than they do about the brand.” He started his multi-million dollar business selling cheap TVs imported from China, so he knows a thing or two about how brand loyalty is becoming less important to consumers.
- Snobbery. This is slightly different to brand loyalty. It is not about choosing to purchase a particular brand because you think it is good, but more about choosing luxury brands and items so that other people will think you are cool. There used to be a trend of buying T-shirts that carried a luxury brand (thank God that has largely stopped), but there is still, for instance, a trend of buying expensive handbags so that everyone will know you can afford one. Just because a handbag is Mimco or Prada or Coach does not mean it suits you, matches or clothes or is suitable for holding the things you need to carry around you.
- You are too shy to ask for a discount. It can be scary to ask for a cheaper price only to be turned down. This really feeds into our fear of appearing cheap, poor or becoming socially ostracised. “You want a discount? You’re dreaming!” But what do you have to lose? Maybe they will say no, but maybe they will say yes. You don’t have to be aggressive or rude in asking for a discount: in a coming blog post I will talk you through ways that you can get the best deal in a congenial manner.,
This month I will explore how to avoid paying full price. I will talk about negotiating strategies, using vouchers, and buying fruit and vegetables cheaply. I am looking forward to hearing from you about how you save money, and how you avoid paying full price.
Do you pay full price for items? If so, why and when?