Frugal Trader at Million Dollar Journey had a fun post last week about expanding his home theatre system (n.b. jealous!). The comments on this post quickly turned to service provider options, and the oft used tactic of using a competitor’s offer as leverage in negotiating a better deal. Frugal Trader used this tactic, and in doing so got a pretty sweet deal from his existing provider.
What I found interesting is that at least one comment suggested telling one provider about a great offer from a competitor when such an offer didn’t actually exist. Playing one company off another is often an effective way to get the best possible outcome, and it’s an approach that I use in many of my consumer negotiations. But it begs an interesting question- just how far are you willing to go to get the best deal? More specifically, are you willing to lie when negotiating to achieve a more favourable end result?
There can be no question that a certain level of bluffing and puffery is par for the course in any negotiation, particularly when it comes to questions of holding back your best hand or bottom price. Negotiation is an art and, just as in poker, bluffing is one of the many skills that is needed to succeed. But even during intense negotiations, there is a difference between bluffing and outright lying, even if the line between the two is blurry.
While at university, I worked part time at a car dealership and got to see the daily negotiations that are part and parcel of the car business. What was most surprising to me was the obvious and unabashed lies told by some would-be customers (and for that matter, a number of the less scrupulous salesmen) in an attempt to score a better price. Claims of another dealership across town that was willing to beat our price by astronomical amounts were common, yet it was painfully obvious to anyone familiar with the business that this was not be the case. The ploy had virtually no positive effect on the salesman because he knew that he was being misled, and the customer’s credibility was destroyed. Similarly, salesmen who denied the accuracy of independent third-party price reports (such as those available from Car Cost Canada) or made false claims as to the features of a certain model were quickly dismissed by knowledgeable customers. The most effective negotiators on both sides were those who were well informed and honest in their approach.
In the legal profession, this is a debate that has raged for quite some time, and no code of ethics has been able to effectively address the question. Some lawyers view any tactic as acceptable if it furthers the client’s case; others take the view that lying is both unprofessional and unethical. I have always fallen in the latter camp, as have the most effective and respected negotiators I know.
In addition to being ethically questionable, there are major pragmatic concerns with using deceit or misrepresentations as a tactic in negotiation. If and when your lie is discovered, your credibility is shattered. Effective negotiations are founded on a good faith approach by both parties, and intentionally deceiving your adversary during the process shakes this foundation. Your credibility is not simply limited to the instant negotiations, either- your reputation can spread much easier than you might think, and a tactical lie may have much broader reaching implications than you could have imagined.
Applying lofty ramblings on the role of deceit in the negotiation process to small consumer purchases may seem a tad dramatic, but the principles and ethics of the situation remain the same. The only difference between a $10 street hooker and an expensive Hollywood madam is price.
Where do you stand? Do the ends justify the means? Will you lie to save money?
Photo by id.
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{ 6 comments… read them below or add one }
I will not lie to save money. On the other hand, there are contexts in the worlds of money and law (negotiation) where it is understood by all parties that there is more to the “facts” than is stated in the words being said.
Thanks for the mention MGL! The new HD PVR is great. I’m not for lying per se, but stretching the truth is ok in my books. For example, when I negotiated my free hdpvr, I told them that I would consider cancelling for the competitor. In my mind, I would have preferred not to cancel, but I would if I had to.
I don’t think it’s really “lying” to tell a salesperson that you can get a better deal somewhere else. That’s just strategy.
That’s pretty morally ambiguous of you, Lard Black.
I won’t outright lie (blame my Catholic conscience), but I will twist the truth a little bit . I may not be willing to walk away, but the sales dude doesn’t need to know that.
I agree that there’s a line, though, at least for those of us who pride ourselves on moral behaviour.
I don’t think there’s any problem with fibbing to get a better deal. The goal is to get the best deal possible- my adversary is going to use any tricks he has, and so will I. It’s part of the game. I don’t see any ethical problem with this at all.
In some business negotiations it may be a bad move because you’ve got a reputation to uphold, but why the heck would I care what my reputation is with the guy at Best Buy?
I don’t think it’s a moral or ethical issue at all, it’s pure Machiavellian self interest. The reason most “respected” negotiators swear off lying is not because it’s wrong, it’s because they know that it will damage their reputation if caught, and therefore hurt their career, finances, etc. When dealing with sales, there is no self-interest downside at all. Do what it takes.
I have found the worst liars to be car salesmen, who will do and say whatever it takes to close the deal. They’re not being unethical, they’re doing their job. It’s your job as a consumer to recognize this and deal accordingly, just as its their job to know if the deal I say I can get somewhere else is realistic.