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Not all countries have bartering as a part of their culture.  Before you try bartering, make sure it's a country that allows it. 

Check for price tags.  Even in a country where bartering is common, that doesn't mean all shops will.  Generally speaking if an item has a price tag, the shop is less likely to barter with you.  If you're unsure, you can ask the sales person if prices are open for negotiation.

When you ask for a price, many barterers will turn around and ask you what you're willing to pay.  It's a tricky spot.  It lets them know what you're willing to spend, but at the same time, it also helps them know what to recommend to you.  In Mexico I saw a ring but I knew it was too much.  I told the associate as much.  He finally got out of me how much I was willing to pay for that ring and when I said my price, he conceded the sale.  BUT the owner saw, scolded the associate, and with oozing charisma ushered me over to a black pearl ring that he'd be willing to sell for the price I stated.  I ended up with the ring (haggling a lower price) and an empty wallet, borrowing money from my mom to pay for my lunch.  While I don't regret it, it wasn't a planned  purchase.

Associates are often chivalrous.  In Istanbul's Grand Bazaar I found myself on the receiving end of a marriage proposal from an associate trying to get me in his store.  So above all else, know that their bottom line is to sell you an item.

Know your bottom line.  Don't let associates tell you what something is worth.  If you see an item you like, know what you're willing to pay for it.  Know what it's worth to you.  Because an associate is trying to mark it up as much as they can.

It's important to know what season you're in.  Traveling in high season is going to result in lower haggling room because they have many customers and if they lose your sale, someone else will come.  In low season, you may to find vendors willing to budge more on their prices.  In low season I tried to barter on a pair of ponchos in Cappadocia and the vendor told me very plainly no, as they were already significantly reduced in price as they were winter stock and winter was ending.

Also important is to know the rough calculation on the exchange rate.  XE currency offers a great app for your phone that you can use offline (the rate will only be updated when connected to the internet).  Because off the bat, 2500 Indian Rupees or 4500 Japanese Yen sounds like a lot.  In the end, at the time of writing, they're both around $50 Canadian.

When a vendor gives a price, my rough rule of thumb is to counter it by 50%.  I'm buying a ceramic bowl and they've told me the price is $100.  I'll counter with $50.  I do this for two reasons.  First, I'm not sure yet if I want the bowl and once the vendor agrees to a price you've stated, it is poor etiquette to walk away from that sale.  Secondly, I get to see how much the vendor is willing to budge on their price.  If they say $100 and I say $50 and they counter with $95, it's going to be a long, hard barter session UNLESS I'm willing to come up A LOT.  If they say $85, then I know we're likely going to end up somewhere between $70 and $80 final price.  That is of course unless the vendor tells me that $85 is his lowest offer.

But perhaps my bottom line is $60.  I'm on a budget, I can't afford to spend too much and I still have a week left in my vacation.  If I counter their $85 with $60 and let them know that's as high as I can go, most vendors are going to accept it or honestly tell you they can't sell for that low.  If you think the vendor is pulling a fast one, apologize that you can't come higher and leave the store.  If the vendor let's you leave, you'll know that their lowest price is as low as they'll go and that's the "real price" if you want that item.  If a vendor isn't at their lowest offer, they'll try a new number to keep you there.  They'd rather get a sale at a lower price than risk you spending your money at another store.

One thing that I dislike about haggling is the time and energy it takes to buy one item.  Especially if you like multiple items in the store.  Many times I spend so much energy on the one item, that I don't want to go through the effort of asking about a second item.  In this case, gather together your multiple items and ask what the lot costs.  Vendors are happy to get multiple sales and you can sometimes haggle a better discount for purchasing more.

When bartering, be sure to keep your excitement over an item under wraps.  You're playing a poker game and you want to keep your cards hidden.  As soon as a vendor knows you love something, they know they can hook you for a higher price.

Once you are nearing an agreeable price, ask if there is an additional cash discount, especially if the store takes credit cards.  Vendors are often willing to lower prices even more for a cash sale.

Generally I hide my money.  Before going into a store I know what bills I have and so I do my bartering without looking in my wallet.  Because when you look, so will the vendor.  If they think you can afford more, they'll barter for more.  When I go to the till to pay, I also hide my wallet contents and try and pay for the sale (when paying in cash) with as close to the amount as possible.  If I was willing to walk out of the store, saying $60 was all I could afford, but hand over a $100 bill for the item they tried to haggle at $85, for some cultures that's insulting.

If the price is too high, leave.  These folks are super charismatic (have I emphasized that enough?).  The guy who sold me the ring, told me to call him Uncle Julio, and ensured me Uncle Julio would take good care of me.  They're often good at getting you to like them (I loved Uncle Julio), and you feel bad when you haven't purchased anything from them.  But at the end of the day, they're trying to make a sale, and if the price is too high, don't feel bad about leaving.

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