Business Forum: Haggling a casualty of retail modernization
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Unless you find yourself at a flea market, rummage sale or some other place where second-hand goods are exchanged, you probably don't haggle. Few of us would consider dickering about the price of goods in retail establishments, and bargaining is certainly out of the question at chain stores.
This wasn't always so. Nineteenth-century customers haggled and bartered over just about everything, managing to bring order to a seemingly chaotic commercial system. Customers lacking hard currency routinely exchanged eggs, butter or even services for dry goods as disparate as flour and pieces of china. The price of goods also depended on how one was paying -- with cash or on credit -- and whether one had a favorable relationship with a particular store clerk.
But bartering and haggling began to lose favor with the rise of so-called one-price (or "fixed-price") stores in the 1830s and 1840s. Many retailers came to realize that they could sell more goods by eliminating the vagaries of haggling.
Americans were slow to embrace the fixed-price system, even though buyers and sellers alike agreed that haggling was highly fraught and engendered distrust and anxiety. Merchants described being repeatedly "beaten down" by aggressive customers who aimed to buy as cheaply as possible, regardless of an item's legitimate worth. Buyers often felt like victims of sharp clerks with well-honed bargaining skills, and thought they too often overpaid.
Retailers instituting one-price systems insisted it was for the benefit of their customers. But it also made great business sense. By eliminating haggling, store owners traded the potential of larger profits on fewer sales for smaller profits on many more sales. By rapidly turning over stock, seemingly meager profits quickly added up.
Perhaps most important, one-price stores let merchants hire unskilled workers who required no knowledge about the stock on hand or bargaining skills to make a sale.
Due to significant socioeconomic shifts including the second industrial revolution, merchants came to rely on unskilled and primarily female labor in the following decades.
By the end of the 19th century, fixed-price stores were the norm rather than the exception. Today the fixed price has become such an integral part of retailing that, outside of flea markets and car dealers, the idea of negotiating a price seems almost absurd.
First Published September 29, 2012 12:00 am