Shoppers haggle for deals from desperate retailers

[December 23, 2008]  NEW YORK (AP) -- If you're looking for an extra bargain before the holidays, you may only have to ask. With holiday sales shaping up to be the lowest in years, possibly the worst since the industry began annual comparisons in 1969, retailers say they're taking consumers' demands for good deals seriously. Some are extending return policies, while others are matching competitors' prices. Many are volunteering on-the-spot discounts and even letting customers haggle prices well down from what's marked in a desperate bid to make the cash register ring.

"You'd have to be a moron not to ask for a discount," said Stephen Hoch, a retailing expert at the Wharton School at the University of Pennsylvania.

More and more consumers are doing just that, treating a trip to the mall like a visit to the used car lot.

Allen Chen, a part-time cashier at a J. Crew store in White Plains, N.Y., said shoppers with two-month-old receipts are asking for partial refunds for items now on sale. Normally, the store's policy is to refund the difference between an item's purchase price and a later sale price only if it goes on sale within seven days of the purchase.

"When I tell them it is past the seven-day policy, they tell me that they will just return it and re-buy it" at the sale price, he said, adding that his store managers are now allowing customers to do so most of the time.

Shoppers are also being far more savvy about asking retailers to match a competitor's lower price.

While shopping for Blu-ray discs at a Los Angeles Best Buy, Luis Levy used his cell phone to check the price at nearby competitors. Each disc was $10 cheaper at Circuit City or Wal-Mart. Best Buy matched the lower prices.

Diana Thang, manager of Grace Jewelers near San Francisco's Union Square, said she and her staff are bargaining more than she ever has in two-plus decades in the business. But it's not working wonders.

"They have a budget," Thang said of most customers this season. "We give a low, low price and they still can't accept it. They're looking at more than $1,000 stuff, and they want to spend $200 or $300."

With sales slow at virtually all retailers, experts say customers now have the upper hand. And even some who don't explicitly ask for a discount or price-match are pressing for better deals.

Jill duPont the owner of a small women's clothing and accessories boutique called Out of the Box in Greenwich, Conn., said she's felt some pressure to mark her prices down to be competitive with others.

"Customers aren't shy about telling us 'what a good price' they found somewhere else," she said.

For some retailers, desperation is setting in. The new year brings new inventory, so retailers typically try to clear out the old stock by year's end. Stores are increasingly willing to do whatever they can to get rid of merchandise -- even offering discounts on the spot.

Erica Pearson, a 31-year-old Brooklyn, N.Y., resident, was debating which pair of Camper shoes to buy at a Zara store in Manhattan when a salesman offered her a deal if she bought both.

"The manager asked me what I wanted to pay for both of them," Pearson said. She wound up getting about $40 off the total and paying no sales tax.

At cosmetics counters, the situation varies, said Ehtisham Khan, who asked that the major retailer where he works in San Francisco not be named. The biggest-name vendors aren't bargaining; some aren't even offering specials for big spenders. But smaller makeup and perfume companies are piling on the freebies, he said, and it's driving sales.

"You give them an extra travel size or a couple fragrance samples, and they'll buy an extra item rather than wait until later," he said.

Of course, not every retailer is willing to haggle.

Adam Lippes, the owner of a two-store high-end contemporary clothing chain called ADAM, said he's offering bigger sales this year at his location in Manhattan's trendy Meatpacking district to cater to more budget-conscious shoppers. But he has had to retrain his sales staff to explain to shoppers why a garment shouldn't be sold for still less.

"The sales staff has to understand the clothes," he said. "It's more work."

He recently talked a customer out of demanding $200 off a $450 dress that was already discounted 25 percent by explaining that it was made with high-quality Italian fabric and manufactured in New York.

Other retailers are giving consumers more wiggle room for returns instead of haggling over prices.

Even Circuit City Inc., which has filed for Chapter 11 bankruptcy protection, has extended its holiday return deadline to Jan. 31, said spokesman Jim Babb. The chain previously required items like cameras and computers to be returned by Jan. 8 and others by Jan. 25.

If the International Council of Shopping Centers' prediction for this season's sales comes true, it would be the weakest season since the index of same-store sales started in 1969. The group expects same-store sales, or sales at stores open at least a year, to be down 1 percent in November and December -- maybe more -- compared with last year.

Even massive discounts on Black Friday -- the day after Thanksgiving, historically the point when retailers began to turn a profit -- didn't do much to help boost sales.

"Retailers have pulled every single trick out of their quiver of arrows that has worked in the past and what they're seeing this year is that it's just not working," said Hoch, the Wharton expert.

DuPont said her normal return policy "became history" about a month ago after her customers begged to be able to return their normally nonreturnable sale purchases after Christmas.

"We caved in, reluctant to turn away business," she said. "We're not looking forward to what Dec. 26 brings."

[Associated Press; By LAUREN SHEPHERD]

AP Business Writer Laura Impellizzeri in San Francisco contributed to this report.

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