Personal Finance

Another “Kick at the Can” in Negotiations

There are a number of behaviours which are universally despised, yet often creep up as a scummy way to get a good deal out of someone.  When an offer is made and accepted, to then take back your offer and try to get a better deal is a very low move.  If you’re haggling in a developing country and you make an offer which is accepted by a merchant, try withdrawing it and offering a lower amount.  You’ll see someone go, rightfully, from cheerful and happy to near violently angry.

This creeps up as a scam when people negotiate with you and while you’re negotiating in good faith (and assume they’re doing the same), they are in reality (and without your knowledge) only the first line of negotiation.  Once you’ve reached an agreement with them, they’ll then say they need to get someone’s final permission for the deal.  This permission will be withheld, then negotiation will reopen and the new person will try to get an even better deal out of you.

This often happens with car dealerships, where you think the salesman has the power to negotiate, but all of a sudden at the end the sales manager won’t go for it and the deal you thought had been accepted disappears and you have to pay more.  A similar situation happened to a friend of mine recently where she’d negotiated a trade-in value and told the dealership that she didn’t want them saying the trade-in was in “worse shape then they expected” and try to reopen the negotiation.  She invited them to inspect the car before it was brought in, or stand by the valuation they offered.  Of course, they tried to do exactly this (expecting once she’d had her car towed in she’d take the lower offer) and, good for her, she walked.

A car BUYER could do this in reverse by one spouse going in and pretending they were going to buy the car, get to the final stage of making the purchase, and then say they needed to get the final ok from their husband / wife.  Of course, the spouse would refuse, then show up and use the previously agreed purchase price as the starting point for the new negotiation.  I would recommend AGAINST doing this for three reasons.  1)  It’s a really scummy thing when people do this to you, and it’s just as scummy if you do it to then.  2)  The dealership is going to recognize this trick and not fall for it (they’re happy to play games with you all day – you’ll probably get frustrated and give in before they do).  3) There are ethical ways that you can get a fair deal from a car dealership which are far more likely to work.

Another friend used this as his favourite trick when negotiating real estate deals.  He’d hash out a deal, haggle away and pretend he was ready to do it.  Once an agreement was reached, he’d suddenly reveal something that stopped the deal in its tracks (which he’d known about all along and avoided mentioning in the negotiation), then he’d use this to reopened negotiating, trying to get a better deal than previously agreed to (with him having the new information that he knew a price they WOULD agree to).  With some people he was able to get away with this repeatedly (improving the deal each time).  I was somewhat impressed at the deals he negotiated, but was unimpressed with his tactics (and unwilling to do this personally).  He even tried it with me and it almost killed our deal (and unfortunately would have involved lawyers if he hadn’t honoured what we’d agreed to).

If you’re negotiating with someone, and you reach an agreement, DO NOT accept it if they try to reopen the negotiation by adding someone new to the conversation or by bringing up some previously undiscussed issue and trying to reopen the negotiation as a whole.  In some circumstances, such as if a buyer discovered damage to a property they had agreed to buy, you should negotiate about the new issue (the damage in this case and who should pay to get it repaired), but don’t let them use it to reopen the deal as a whole.

If the deal is very important to you, keep reiterating to them that you’ve made an agreement and an offer has been accepted.  If the deal isn’t very important to you (or you have another option for a comparable deal), refuse to do business with someone who tries to pull this on you.

11 replies on “Another “Kick at the Can” in Negotiations”

Excellent post, Mr. Cheap! I think it is really a scummy and horrible way to do business and the examples you gave are great ones. It’s a terrible feeling when it does happen to you and you were negiotating in good faith. It can feel like you got hit by a Mac truck! I think the best leverage in “bad faith” negiotations is to walk away, if you can. It prevents rewarding this offensive behavior.

Good point about not withdrawing an offer once it’s been accepted. As a real estate agent I’ve seen some pretty interesting things happen when emotions get involved. Unfortunately the majority of disputes end in court when you have that big of an asset involved!

I love the idea of having your spouse getting the “final say” in a car deal. I don’t see why it’s unethical – that’s exactly what the dealers do when you buy a car so why can’t the customer do it too?

Hehe. I’m with Four Pillars on this one. It doesn’t seem unethical to me given that it’s exactly what the dealership tries to do to you.

That said, I bet Mr Cheap is right: They’ll be onto your game right away.

Ethics-shmetics. Getting a bargain is all that matters. It’s also called “value investing”. The friendly investor next door, Warren Buffett comes to mind when it comes to getting deals at a discount.. (for example his preferred investments)

I’m with DGI – how do you define ‘ethics’ anyway?

Is it ethical to offer a price for something knowing full well that you are willing to pay more? Aren’t you lying a little bit? Shouldn’t you just make one offer?

Is “this is my best/final offer” the whole truth and nothing but?

Another interesting post Mr C, Mike should ask you to comment on The Ethicist every week too.

We actually do the “my spouse has to agree” all the time. Not for cars yet, but we’ve done it with reasonable success for furniture, renovations/repairs, gym memberships, hotel rooms and cab fares. All huckster trades, which lessens my guilt I suppose, but you’re right – I don’t like it done to me. I’ve also used it to get out of uncomfortable hard sells quickly by doing the “my husband holds the purse strings” thing (couldn’t be further from the truth!).

I am kind of with DGI with this one, although I think there is ethical and unethical practices, the bottom line is getting best deal you can. Specially with car dealerships anything goes.

So what is negotiation but extracting more money from the naive? Just know the price you want to pay and stick to it. All the rest is window dressing and there is nothing about “feelings being hurt” or anything like that. It’s the price and if it makes an adequate return for the seller they will give it to you.

I agree. THis is a really lowdown thing to do, but it happens all the time. Even when dealing with Government Agencies.

The key is whether we are ready to walk away from the deal. And we should always be ready to walk off.

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