When I lived in the United States, the only time that I ever negotiated a price was when I was either buying a car or a house. In both cases, I hated the process and I found it very stressful.
In Mexico, negotiating is an integral part of the culture and if you shy away from doing it, you will end up paying a lot more for goods and services. Although I hated negotiating when I lived in the U.S., the thrifty side of me told me that I would have to change my attitude in order to save money.
Over the last year, Linda and I have become quite adept at negotiating. Now I actually enjoy the process and I find myself negotiating prices all the time.
When I refer to negotiating, most people immediately think of haggling over the price of a T-shirt in the tourist area, but in Mexico, it goes far beyond that. We have negotiated the price of everything from home repairs to hospital visits.
Yes, you read that last one correctly — hospital visits. I will talk more about that one below later in this post.
The Art of Negotiation
I have learned, mostly through trial and error, that the negotiation process in Mexico is more complex than just telling a vendor that you want to pay less.
I want to point out that there is no single strategy that will work in every possible negotiation scenario. Nevertheless, there are some general guidelines that you can follow to increase your odds of saving the most money possible.
1. Be respectful
The Mexican culture is a lot more formal and polite than the one I came from. I have had to soften both my tone and my approach in order to do business here. Courtesy, patience and respect are essential components to any negotiation.
This means approaching the negotiation process like a friendly game of chess. Never raise your voice, get visibly angry, or cause a scene.
2. Consider the cost to the vendor or provider
Always consider the vendor’s costs when negotiating for a lower price. People need to make a living.
If you are negotiating for a product, you are only negotiating for the amount above what the vendor originally paid for the item. This generally means that the savings will not be as substantial as you would see if you were negotiating for a service such as a massage or a guided tour.
3. Do not be afraid to ask for a discount or reduced price
If you come from a culture where people generally do not haggle, you may feel uncomfortable doing it. In Mexico, negotiating is just part of the culture, so you are not likely to offend the person by inquiring about a lower price.
A nice way to accomplish this is to ask questions like: 1) Is that the best price you can offer?, or 2) Do you offer any discounts here?
4. If you live locally, make sure you tell them
This one is especially important of you live in a tourist area. Many businesses and restaurants offer local residents — even foreigners — discounts. The average discount offered to locals in my area is 20%. You can also save money at hotels in your area by getting a locals discount during the low season.
You may have to show proof in order to get the discount. We usually show our resident cards and/or a CFE (electric) bill. It is always a good idea to keep a photocopy of an electric bill in your glove box for situations like this.
5. Think outside the box
Do not limit yourself to the conventional thinking that it is only possible to negotiate the price of souvenirs, cars, and houses. It is amazing how many things are truly negotiable. Here are a few examples from our own experiences:
Massages and beer
During a recent trip to Mahahual, Linda successfully negotiated down the price of a massage from $60 USD to $14 USD. While she was getting her massage, My friend and I decided to go get a beer nearby. We found a great place but upon reviewing the menu outside, I noticed the beer prices were a little high.
We told the waiter outside that we were going to go down to the next place because the beers were cheaper. He then spoke to the manager and they lowered the price of the beer for us.
Hospitals and medication
One weekend, Linda was having terrible back pain. We decided to go to a nearby 24 hour private hospital on a Sunday after church. Upon our arrival, Linda asked how much it would be to see the doctor.
After being quoted a price, Linda advised them that we lived locally and asked if there was a discount. The attendant replied that there was a discount for locals and lowered the price by almost 50%.
The doctor wrote her two prescriptions and we chose to fill them at the same location. The medications had prices on them but Linda asked the classic question, “Is that the best price you can offer?” The attendant then lowed the cost of the medications by an additional $50 pesos.
On a side note, the doctor was very knowledgeable and the medication did the trick.
6. Cultivate relationships with locals
Doing business in Mexico is all about forming relationships. For this reason, it is a good idea to cultivate and maintain relationships with people in your area. This is easy to do in Mexico because people are very friendly.
Once you have some local friends and contacts, you will save money when they refer you to others. For example, if you need someone to paint your condo, mention that to the bartender you chat with every week. Chances are good that he or she knows someone who can do the job, and at a good price.
7. Sweeten the pot
You will be in a better position to negotiate if you can offer the business owner something in return.
One of the most effective and inexpensive ways to do this is to bring them additional clients. If you and your neighbor both need new blinds, why not go together to negotiate a better deal.
8. Pay in cash
This is a big one here in Mexico. Most businesses will not even give you the local’s discount if you pay with a credit card because they have to absorb those fees.
By offering to pay in cash, you are more far more likely to get a discount. Some businesses even list two prices for products: cash and credit.
If you are buying a larger item, I would recommend using a bank transfer between two Mexican banks. The advantage is that the business will still give you the cash price; however, you can avoid the risks associated with carrying around large quantities of cash.
9. Do not be afraid to walk away
If you are not happy with the deal, just walk away.
10. Learn Spanish
This is an important one; however, many expats do not make an effort to learn the language. If you can speak Spanish, even a little, you will be more successful at negotiating deals and saving money in Mexico.
Not everything in Mexico is negotiable. As you become more familiar with the country and the customs, you will learn what is and is not. Until then, it never hurts to ask.