The do's and don'ts of haggling abroad

Haggling over the cost of goods or services is acceptable in many cultures. When we travel overseas, especially to developing countries, we may know that there is room to negotiate, but haggling just for sport or to see how low you can get the seller to go is a disservice to those who make their living from tourism.

The following tips can help you navigate the haggling experience.

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Know what you’re buying

Most vendors will double (or triple) prices, especially if they know that the tourists are American. This is all part of their business system, so don’t be put off. Haggling is generally expected, and in most situations, you can knock a few dollars off an initial offer.

Before traveling, do some research about what things should cost. Message boards and online travel groups are great resources for figuring out what others spent. Post a question in the TPG Lounge Facebook group and you are bound to get a reply.

Knowing the exchange rate will also cut down on pricing confusion. Each transaction is unique, but it’s helpful to know the average price of an item or service instead of wildly guessing at a price in an attempt to “win” a game of haggling.

For goods, find out if what you’re buying is locally made. A lot of souvenirs are mass-produced, but if you find something special that is handmade, it may be worth spending a few extra dollars. If you’re not sure if something is handmade, ask the seller. Part of the joy of traveling is interacting with locals and finding out if there is a backstory, even if it may be a little fabricated.

For services, think about what the same service would cost at home. In the U.S., a 30-minute massage in a spa may cost, at the low end, anywhere from $30 to $60. In Colombia, my friend received a 30-minute massage on the beach for 26,000 pesos or roughly $8. She left a great tip and the entire experience cost her $25. Sometimes haggling just isn’t necessary.

Related: Can you negotiate for a cheaper upgrade?

Be respectful

Always approach an opportunity to buy from a local as a positive. Greet the vendor warmly and in his or her language if you can. It will open the dialogue with a sign of respect. And, don't get upset if the negotiation doesn't go the way you want. Every transaction is a unique process but, in all cases, the seller knows the rock bottom price that he can offer while still earning money. There is a price floor to everything and if you're not willing to pay that price or above, the sale won't happen.

Of course, vendors in some places can indeed be aggressive. Many sellers, if they sense any sort of interest, will follow you until they make a sale. The best way to handle this is a firm "no."

But don’t try to “lowball” sellers just to see if you can get the price down. If you’re interested in buying, make a fair offer. In real estate, sellers often won’t respond to a lowball offer because it’s insulting. They don’t want to entertain buyers who aren't serious. The same principle can be applied to haggling. A seller may be desperate enough to lower a price, but it can be a measure of desperation, not respect for the buyer.

Many of us will shrug and pay almost $4 for a bottle of water at Disney World. Because haggling isn’t acceptable at Disney World, we justify those prices as just “part of the Disney experience.” In other countries, a few more dollars spent on an item or a service may mean the world to a seller and is unlikely to make a huge difference to us. The goal in haggling is to settle on a price that is fair for both the buyer and the seller.

Related: 7 ways to save on overseas ATM withdrawals

Consider where your money is going

Let’s face it. We love a good deal. We like to brag to our friends about the great deal we got on a flight, the vacations we booked using only credit card and hotel points or the offseason cruise we booked during wave season. Saving money makes us look savvy and wise. Overpaying can make us feel we've been taken advantage of.

Related: Dynamic currency conversion and why you should avoid it

Bottom line

But when we travel, we are ambassadors for our home countries. Saving money is a high priority for budget-minded travelers, but it’s just as important to be thoughtful in the way that we spend our money, especially in countries where tourism is the main source of income. Good haggling is about paying a fair price, having positive interactions with locals and accepting that we don't always need to get the very best deal.