Customer Bargaining in Retail Settings: Employee Perspectives

Abstract

Bartering, bargaining, and haggling have long been a mainstream practice in many cultures and for certain retail segments such as car, furniture, and electronic retailers. The phenomena have been studied in the context of economics and game theory, business-to-business relationships such as supply chain networks, cross cultural differences of the focal behaviors, and overall marketing strategy. However, generally ignored dimensions have been the emotional aspects of bargaining and haggling on front line employees in traditional retail segments, where these practices are not generally accepted or used. It is especially important to study this phenomenon in traditional retail settings because in this setting neither the employee nor the customer is generally well equipped with the skills necessary to engage in these behaviors in a productive manner, which may lead to increased feelings of stress, conflict, anxiety, tension, unhappiness, and job dissatisfaction for the front line employee. Many consumers have been encouraged by wide-spread news and media stories promoting the practice (e.g., National Public Radio (Siegel 2008), NBC’s The Today Show (Weisbaum 2009)). Additionally, The New York Times (Richtel 2008) and Consumer Reports (2009) have also reported that customer bargaining, or instances when the customer asks the front line employee for a discount or other special deal, is on the rise. While it may be beneficial to both the bargaining consumer and to the retailer as a whole to haggle over prices and bargain for special deals for the purchase of the product, this practice may be emotionally exhausting and challenging for many front line employees. In this paper, the bargaining/haggling phenomenon is investigated from the retail employee’s perspective in order to better understand the impact these practices have on front line employees.