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| The Basics | Haggle with your plumber, doctor or chimney sweep
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Can they pare those big fees? You won't know until you ask. Learn these key strategies for bargaining and getting good service at a lower price.
By Liz Pulliam Weston
When it comes to the goods you buy, you may be a pretty smart shopper. Youll look for clothing sales, use coupons for groceries or find a gas station thats a few cents cheaper.
But when was the last time you asked your doctor for a price break? Demanded a discount from your plumber? Told your tax preparer her fee was just too high?
Most of whats written about bargaining focuses on goods, but its the cost of services thats really on the rise. Services cost on average 38% more than they did 10 years ago, according to the U.S. Bureau of Labor Statistics, compared with an overall inflation rate in the last decade of about 28%. Some services have gone up even more:- Medical care costs 49% more than in 1993
- Financial services, from bank fees to tax preparation, are up 62%
- Legal services cost 56% more
- Funeral services are up 56%
In commodities, were seeing prices actually falling, but in services were seeing inflation rising, said economist Sung Won Sohn of Wells Fargo Bank, and services make up 85% of the U.S. economy.
Service inflation will really accelerate, Sohn believes, when the economy finally gets back on its feet, as higher medical costs continue to boost labor expenses.
But most consumers seem reluctant to fight back when what theyre buying is intangible, rather than something they can stuff in a shopping bag.
Take medical care. A recent Harris Interactive poll found that fewer than one in five consumers had ever asked for a lower price from their doctor, dentist, hospital or pharmacy. But about half of those who asked said they were rewarded with a discount.
The worst that can happen is that youll keep paying what youve been paying, said David Heim, deputy editor for Consumer Reports magazine. The best is you get a break.
Obviously, the first step in getting a better price is being willing to ask. Here are some strategies for knowing when and how.
Shop around
You know that the price of a box of Tide will vary considerably, depending on whos selling it and whether theres a sale. But you might not know that the cost of the services you buy can vary just as much, if not more.
The price for neutering a dog, for example, can vary from as low as $60 to as much as $240 in the same community, according to research by The Center for the Study of Services, which publishes Consumers Checkbook magazine.
Dont assume theres a consistent price for whatever service youre buying. Call around and get at least three cost estimates. If you want to remain loyal to a single service provider, ask if he or she can match a lower price that you found. Many vets, for example, offer lower-cost neutering or immunization clinics but might not tell you about them unless you ask.
Of course, you may not always want to go for the bottom dollar. Quality is important, too.
If you go for the lowest price for fillings, you might get a dentist who finished last in his dental school class, Consumer Reports Heim said. And you might not want that.
Be a good customer
Good customers get special treatment, whether theyre high-tipping moguls at the hottest Hollywood eatery or normal folks with high credit ratings and a habit of paying their bills on time.
Cell phones and credit cards are two areas where it always pays to ask about discounts, rebates and waivers, even after your initial sign-up period. Most credit-card companies are willing to waive fees and lower interest rates for good customers, and cell-phone service providers are usually willing to throw in free minutes or rebates to get you to extend your service agreement.
Consider using a pro
Frugal folks are often tempted to cut out the middleman, but in some transactions it can make sense to have an advocate.
A good insurance agent, for example, can convince a life insurance company to give you the best possible rate despite a few health glitches. If your finances are less than perfect, a mortgage broker can help make your case with a lender and get you a better mortgage deal. And if you ever get audited, sending a tax pro in your stead will make sure that you dont blurt out anything damaging that will cost you big bucks.
Pay cash
Offering to pay cash at the time of service is a way to get just about any service providers attention. They dont have to worry about billing you, and they wont lose the 3% or so they would otherwise have to pay to a credit-card company to process the transaction.
Some hospitals, clinics and doctors offer 5% to 10% discounts right off the bat if you pay in cash. With a little haggling, some are willing to cut even farther.
Of course, youve usually got little incentive to bargain if youre covered by insurance -- and the docs agreements with insurers may prevent discounts on covered services anyway.
But if you dont have insurance, you have a high deductible or the procedure itself isnt covered, its time to haggle.
Take teeth whitening. This increasingly popular service is almost always cosmetic and thus not covered by insurers. At the same time, lots of dentists have gotten into the business of brightening ivories, so theres plenty of competition. Offer to pay cash, and see what kind of break your dentist will give you.
You do run a risk by paying cash, since you lose the negotiating power a credit card gives you. (The Fair Credit Reporting Act gives credit-card users the power to withhold payment and dispute charges if something goes wrong.) So make sure you trust your service provider before using this approach.
Be aware of the market
Speaking of competition: the more of it there is, the better off you are -- unless the competition is other consumers.
If youre in a hot real estate market, for example, you may have trouble getting a good general contractor to even return your calls, let alone give you a great deal on a home remodel.
But if that same hot market has flooded your city with newly minted real estate agents, you might be able to get yours to cut her traditional 6% commission on the sale of your current home so that you can buy, rather than build, the house of your dreams.
Likewise, if there are lots of lawyers doing bankruptcy or divorce work in your community, they may be more receptive to the idea of negotiating their fees.
Group rates
In general, the more work you can toss to a service provider, the more likely you are to get a discount. Sometimes that means getting a bunch of things done at once, and sometimes it means banding together with others to bargain for a better deal.
When we first moved into our house, we noticed that our chimney needed cleaning. We checked with our neighbors on both sides and they, too, were overdue for a good brushing. After picking a sweep, we mentioned that fact, and asked if all of us could get a break if the work were done on the same day. The discount our sweep offered wasnt huge -- $25 apiece -- but it was enough to make asking worthwhile.
Other neighbors have negotiated discounts on painting, driveway work and landscaping by bargaining as a unit.
If you cant get a group rate, ask if you can get a discount for referrals. If youre happy with the providers work, youre helping out your neighbors while getting a break for yourself.
When haggling doesnt work
Sometimes a price is a price. That doesnt mean you cant contain costs:- Get an estimate. If youre hiring a lawyer for a specific legal matter, for instance, you can shop around by asking for a ballpark of how much the job will likely cost.
- Dont overbuy. You dont need a CPA to file a 1040EZ. If you really cant manage it yourself, hop on down to one of the chain tax preparation stores, or call an enrolled agent. These tax preparation specialists typically charge less than their accountant brethren.
- Offer to do some of the footwork. Organize your paperwork for your tax preparer. Gather documents for your lawyer. Buy the fixtures and cabinets for your contractor.
- Check your bill. Hospitals and lawyers are notorious for overcharging; Heims favorite example is the man who reviewed his hospital bill only to discover a charge for a hysterectomy.
Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money. She also answers reader questions in the Your Money message board.
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