By Miles Clyne
The easiest money most of us will ever make is the money we don’t spend. Huh? I have a good friend who has spent a lot of time in Mexico. He taught me I should never pay full price for just about anything without first trying to haggle a better price. He buys out of season products mostly, as these are the goods he knows he’ll get the best deals on.
He explained how it went down with a lawn mower he bought from a big Canadian retailer. He saw the lawn mower he wanted. He asked the sales person if they’d take an amount that was considerably less than the listed sale price. The person he asked didn’t know, so he asked to speak to the manager. The manager came and they agreed on a price. He says this same process gets repeated over and over again at most stores he shops at with good success. I now think of my buddy Rod every time I spend money on bigger ticket items.
Here’s a big ticket item that I just saved $500 on annually; my home internet bill. I’m a long-term TELUS customer. I was recently at Costco where Primus was offering a home internet package through TELUS for about $45 vs. the $90 we were paying. This was 12 X 45 = $540 annually I’d save. Keep in mind this was my home service so I have to pay for it with after tax money. If I’m in a 40% marginal tax rate I have to gross up my saving by 40% to know what I’d have to earn pretax to generate the same amount of money. In real dollars, if I didn’t go for the deal, it would cost me more than $750 annually.
I’m typically a very loyal customer so I called TELUS, frustrated that I could buy a service they were providing through another provider at a much lower cost, and to find out if there were any catches to the Primus offer. No catches and no good answer from TELUS as to why I could get a much better price from Primus. And they wouldn’t come anywhere near matching the price. I thought about it and called TELUS back to cancel my service. They then offered me a rate that was $5.00 per month lower than Primus was offering. As a very long-term customer of TELUS I was pretty surprised and frustrated that they would not offer me a competitive price until I was 100% prepared to leave.
The only issue was that I’d only get the deal for 12 months, and I’d have to renegotiate my rate again. I grudgingly stayed with TELUS, but I’m about $750 better off now than I was before. And I get to hone my bargaining skills again with a receptive participant in a year's time.
Was it worth it? Hell ya. I spend at most 2 hours on the phone between TELUS and Primus. I would have had to earn the equivalent of about $750 to pay the extra fees, so I compensated myself about $375 per hour for my efforts. I’m not sure the last time you could earn $375 per hour, but I’ll haggle all day long for that amount whether I need the savings or not, just out of principle. Two bonuses to all of this; it is guaranteed money as I already have it and I know the rules now, so I think I can get the negotiation down to under an hour next year. Thanks Rod.
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The comments and opinions expressed herein reflect the personal views of Miles Clyne. They may differ from the opinions of Leede Jones Gable Inc. and should not be considered representative of the research beliefs, opinions or recommendations of Leede Jones Gable Inc.
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