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Confessions of a Retail Salesman: Beware of These 4 Sales Tactics

in Money Basics, Rants

This is a guest post from Adam Hagerman. Adam provides financial help for anyone in need on his blog Walking to Wealth. Adam is also the author of Things To Learn, a site that answers life’s burning questions. Like Things To Learn on Facebook for up-to-the minute updates.

A few months ago, I ventured out clothing shopping for the first time in a long, long time.

Specifically, I was out looking for a suit as I had an interview coming up and I wanted to look sharp. The suits I had in my closet were a little outdated (pleats, anyone?) and I wanted something a little more modern.

As soon as I walked into the first store of the day, let’s call it Men’s Stockroom, I was targeted. 

I had “guy who knows nothing about suits” written all over my face. I swear I saw drool on the guys face who asked me if I needed help.

I told him what I was there for and he immediately started pulling things off the rack. He kept saying, “you would look fabulous in this color” or “oh that looks sharp on you”. It was a constant barrage of fine clothing.

Now, this was not my first time shopping for clothing. I consider myself a thrifty shopper, as I always like a good deal and typically shop around. At the time, this specific store was running a “buy one, get one” sale. What a bargain!

However, I told myself that I was going to go in, check out some suits and then head to another store to compare prices.

For some reason though, this salesman’s tactics were working wonders on me. I was not looking at prices and I felt extremely rushed. Before I knew it, I was standing in front of towering mirrors with some man taking my measurements. I felt as like I was locked into the sale.

When all was said and done, I ended up with two suits (although he adamantly tried to sell me four) for roughly $900. I kept telling myself that it wasn’t that bad of a price and I wasn’t really going to find anything better elsewhere. 

Well, as it turns out, I did. A few days later, I found myself wondering the mall while my wife was handling some after-school activities there. I walked into a department store and found a suit that fit me perfectly and was boatloads cheaper.

Long story short, I bought it and returned the other two suits, saving me about $750.

I’m telling you this story because it reminds me of the days when I used the same tactics that salesman was using on me.

Honestly, I should have known better but when you are in the heat of buying something, sometimes you make uneducated decisions. Therefore, I thought it would be beneficial to go over some things that go on in a commissioned salesman’s  head.

We’ll know if you are buying within 1 minute.

Sales associates are skilled at feeling you out quickly. If they can sense that you are just “kicking the tires”, be prepared to get minimal help. Their income depends on sales and if you aren’t going to lead to one, they will look for someone who is buying.

My advice to counter this is to seem interested and give them the vibe that you are buying, even if you are not. Once you get to the point where you are comfortable with your choice, just let them know that you want to check some other stores.

Some stores may even help you comparison shop for prices (and most will match competitors’ prices). Therefore, it’s best to ask them their policy on prices.

From my shopping experience above, I definitely acted interested. However, when I got to the part where I was supposed to walk away, I panicked. Suits are a little different due to the alterations, etc. I guess I just felt that they helped me out and I needed to pay them back for it.

I should have put my own interests first. Lessons learned!

“We know what pays better commissions.”

When I was working on commission, I used to get a detailed report every payday.

That report showed all of my sales and the exact commission that I earned on each item. Therefore, I knew what paid the best.

So, if you came into my store looking for a riding mower, I would focus my sales tactic on the product that paid me more money. I know that’s awful, but I was in high school and money was everything to me at the time. This is also one of the reasons that I have a tough time selling products today.

This reason is why it’s a great idea to do some research before you head into the store. Consumer Reports is a great resource for this.

If you head into the store and only have to make a choice between two items, it makes the whole decision that much easier to know which is really a better fit for your needs.

“Extended warranties are wonderful.”

Sales associates that sell items that are eligible for warranties are under heavy pressure from management to push them.

Warranties are also a big profit item for stores. Therefore, you need to be prepared for that sales pitch when you are at the register (or before).

Personally, I never believed in the warranties that were sold at the store I worked. The fine print stunk, and most were extremely pricey (some cost 50% of the product cost).

There is only one thing in the world that I would buy a warranty on, and that is a laptop. The only reason is because of the ability to get cosmetic items fixed. So, if I spill my morning coffee on it (which has happened before), I know I am covered.

“We get paid to push credit.”

Another big money-maker for retail stores is credit.

I remember seeing a sign in our break room that outlined how the store make money on credit. It looked at a $100 sale and detailed how much the store ended up with.

For example, if a customer used outside credit (Visa or MasterCard), the store would net roughly $97. If they used cash, it was $100. However, if they used store credit, it somehow ended up as netting something like $102. I’m guessing that it is that way due to the interest that they can potentially earn on the sale.

You should also be aware that most stores give incentives to employees who take credit applications. The store I used to work for provided $2 for every application you took whether the customer was approved or denied.

Over a months time, that could add up and is why many employees push credit hard on customers. My advice – STAY AWAY!

So what should you do?

As you can imagine, all stores are NOT this way because they don’t all pay commissions.

An easy way to find out is to see how long it takes for someone to ask if you need help. In my shopping example above, it only took about 30 seconds for someone to find me.

However, if I were to walk into Target, very rarely would anyone seek me out. In fact, it’s sometimes hard for ME to find an employee in there.

If you DO end up in what seems like a high-pressure sales situation, don’t be afraid to walk away, and don’t be afraid, like I did, to return your items later if you end up making a costly decision!

*****

Read more from Adam Hagerman at Walking To Wealth and Things To Learn.

*****

Note from Joan: Adam is definitely not alone.

I’m ashamed to admit that I fell prey to many of the same techniques when I was shopping for a gym membership late last year.

I had good intentions. I intended to get some price quotes from a variety of places, then leave. I intended to think for a day before making a decision. I didn’t intend to pay for anything except the services I really wanted.

But the salesman – and that’s what he was, despite his “training manager” title – won me over. Like Adam, I wanted to “repay” him for helping me out.

Like Adam, I intended to walk out without making a purchase.

It cost me big-time. I signed a year-long contract for a service I didn’t even want – and got a verbal OK that my “new friend,” the training manager, would get me out of it if my circumstances changed.

I bet you can guess what happened when I called him on it later, right? I had to pay a fee to end the contract – equal to half the remaining balance. I was willing to take that hit so I could be out of the situation, but it sure hurt.

Poorer but wiser… at least half of that’s a good thing, right?

I know Adam and I can’t be the only ones who’ve been in this boat. I feel terrible when I think back on the ways I’ve fallen for these and other super-obvious sales techniques when I wasn’t really ready to buy.

I’m interested to hear your experiences. Are there words or phrases that you know to be on alert for – or are there “sales pressure” tricks you’ve fallen for that you wish you hadn’t?

Tell us in the comments!

{ 27 comments… read them below or add one }

Gillian @OneGiantStep July 27, 2012 at 8:39 AM

Gym memberships are the worst for this! I hate the buddy-buddy style and then the cold shoulder when I need help. Glad you got out of it Joan!

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Joan July 27, 2012 at 9:31 AM

ME TOO, Gillian!!

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Jen July 31, 2012 at 12:33 PM

Ugh, when I was out of college and moved to Chicago I went to a Bally Total Fitness just to get prices and the salesman there was my new best friend! I was alone in a big city and signed right up. When I saw him later on at the gym it was like I didn’t exist. The gym was gross and overcrowded. Stupid of me, but at least I learned young and it was a relatively small mistake. I avoid any furniture stores or mattress places where the salespeople attack you.

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Travis Scott July 27, 2012 at 9:13 AM

I am not sure if we should “blame” the sale’s person….they are just doing their job. If you purchase something you don’t want to buy, then I think the only person to blame is yourself. You always have the power to say “no”. Even if you get “pressure” you can always walk away.

On the other hand, if the sale’s person is selling unethically then we have a problem. Other than that, the buyer must take full responsibility.

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Adam Hagerman July 27, 2012 at 9:30 AM

Thanks for the comment Travis.

I am not trying to blame the salesperson here. I just want individuals to understand that there are certain pressures and financial incentives that sales associates are faced with every day. Therefore, their advice may not always be in your best interest.

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Jason Clayton | frugal habits July 27, 2012 at 9:34 AM

I immediately think of car dealerships when I read this story… The last car I purchased was ‘certified used’. It took 4 rounds of negotiations to get the right price, but even then they were trying to sell me a $1500 cleaning of the ‘airways’ in the car which was suppose to be better for my health. (Isn’t the car already clean? :) )

It didn’t stop there, after purchasing they sent me to the finance department where they tried to sell me gap insurance for $1000. I found it for $40 from my car insurance company. I guess the lesson is to ‘stick to your guns’ and know what you’re doing when you walk in the door, but the most important lesson is to know ‘you are in charge’ and not the sales man….

Also – always walk away, only then do you know you have the best price when you walk out the door. My method is to go have lunch and think about it. Then I know I have the best price and am in the right mind to purchase.

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guest July 27, 2012 at 9:40 AM

I am really torn over this. I absolutely know situations like the ones described here exist. I work in retail and my store has a “greet within 30 seconds” policy but we do NOT make commission. We focus on customer service and pride ourselves on our customer service. We have a 100% guarantee on our products and have EASY, hassel-free returns. Because of this our customers are very loyal. I get frustrated in high-pressure sales situations but I guess I just want to shine a little positive ray of light that there ARE some companies out there who do focus on customer service, an immediate greet, offer of a beverage, complimentary services, and who do NOT make commission, therefore can look at you as a PERSON and not a dollar sign.

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Thomas @ Mobile App Tycoon July 27, 2012 at 9:47 AM

Some interesting things here that I wouldn’t have expected! Luckily, I prefer to not be bothered by salespeople unless absolutely necessary and I can’t find something, something is in a display case, etc. If I’m buying something that will cost significant money I always make sure to do my research (probably a little too much) in advance anyway. So 99% of the time, the salesperson doesn’t tell me anything I don’t already know.

Thanks for the heads-up on these tips!

Thomas

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Bilgefisher July 27, 2012 at 9:54 AM

Isn’t interesting how realtors and car dealers do this all the time. You give them the most you will pay and 2 out of 3 homes are above your price point. They show you a basic model or rundown home, then show you the trophy home. It will only cost $200/month more, that’s all. I give em credit though, it often works.

Jason

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Adam Hagerman July 27, 2012 at 10:05 AM

Thanks for the comment Jason.

That is a good point about real estate agents. One thing to remember about them (it’s in the book Freakanomics) is that since their commissions are rather low compared to the price of the home, they do not always have an incentive to help you get a higher sales price.

For example, if you receive an offer on your house for $290,000 but you want to counter and stand firm at $300,000, that only increases the real estate agents commission by $250 (2.5% times $10,000). Therefore, they may try and push you to accept the offer because if you keep it on the market, they will more than likely work a lot more for only $250 in extra commission. However, you are looking to make an extra $10,000!

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Bilgefisher July 27, 2012 at 11:13 AM

Excellent point on sales. If you know what drives the Realtor (any salesman), offer them a bonus. So they make only $250 more for a 10k increase. Offer them 1k bonus for that 10k increase. Heck even a 5k bonus would still be worth it.

I do this on the flip side when buying a home from a wholesaler. They lock up a house for say 50k and I buy it from them for 55k. I tell them i will split the difference if they can get their price lowered to 45k. In other words I now pay $7500 fee instead of a $5000 fee. Yet pay $2500 less for the house at 52.5k Its a win win.

Jason

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Jason July 27, 2012 at 10:14 AM

I will never walk into a car dealership again without knowing exactly why I’m there and exactly what I am willing or unwilling to buy or do there. The worst sales experience of my life occurred when I was “just looking” because I really needed the financial breathing room and a better vehicle. They about had me wrapped up after 2 hours of “negotiating,” which in fact was more like “sales abuse” — I only realized it after the escape!

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Hannah July 27, 2012 at 10:25 AM

Nobody wants to be the “bad guy” who says NO! Salesmen know that most people don’t like confrontation, and when faced with it will back down.

Simplest advice: educate yourself. It’s the equivalent of putting on armor.

Learn about the product you are buying BEFORE putting yourself within the grasp of a salesman, and learn about dealing with confrontation. You will be more confident in your own decision-making and less likely to be swayed by a pushy sales-person.

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Holly@Clubthrifty.com July 27, 2012 at 11:01 AM

I hate being in this situation!!!

On one hand, I like being friendly to salespeople and the thought of them working for commission truly makes me want to help them. On the other hand, I have to put myself first and only buy items that I truly need and are at my price. This is why I hate going shopping in general. I don’t like feeling guilty.

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dvdchris July 27, 2012 at 11:41 AM

At a prior job, we were trained that cash was the most expensive type of transaction to the store. Therefore, everything was done to avoid a cash transaction. Certain registers were ‘no cash,’ and the rest had limited change.
Every effort was to be made to have the customer apply for a store credit card.
Extended warranty/protection plans were one of the most important criteria for your performance. You had to sell a quota of them to receive an acceptable review. This is why salesmen don’t even want to ring up your purchase if you are buying ‘dry.’ All you do is hurt their numbers.

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Chad Lane July 27, 2012 at 11:46 AM

Nice article. Those warranties are designed to make money for the issuer. They work the same as a slot machine or roulette – the odds of breakage are carefully calculated and profit is built into what we pay. The calculations are the same as those used to calculate EV in poker. I always take my chances, knowing that in the long run, I’ll spend less on replacement then on the cumulative warranties.
As far as figuring out whether salesmen are on commission, I ask them. They’ll tell you. If they lie and say, “no,” and you walk away from the sale, then so be it.
I have fallen prey to a car sales tactic twice – paying much more than I intended or could afford – that is worth knowing about. The salesman lets you keep the car over the weekend or for a day or two with a dealer tag while waiting for some aspect of financing, paperwork or just to try it out.
The dealerships know that this is a great investment, because the prospect begins to think he owes the dealer something for driving around the car for a few days, using the gas and leaving soda cans in the back seat. After the test drive, if you haven’t decided to buy, resist the temptation to take the car for a day or two if offered.

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Leah McClellan July 27, 2012 at 12:03 PM

Interesting to read your story! Since I prefer to browse and look for awhile by myself in almost any store, I get really turned off when someone with a big professional sales smile comes sauntering over right away, and if they don’t respect my request to leave me alone until I ask for help, I’m likely to leave without buying anything. And if they pressure, forget it.

That said, I’ve been in sales, and although I prefer to “soft sell” just by being super nice, knowledgeable, and helpful, I’ve used a few tricks–not often, but a few times esp. since I was manager and had to train new sales people in the “official” sort of way. For ex., when someone is dithering, seemingly not sure about buying, with product in hand maybe, there are all sorts of ways to close the sale like shut the drawer where the product was and ask how they’d like it wrapped, or set the product by the cash register and say, “You’re really going to love this! Now, will that be cash or credit?” No “yes or no” questions, only questions that push to the close. Same in real estate with different tactics–it’s all about closing the sale.

Although I was never very good at hard selling (and never wanted to be), it evens out when you factor in the returns. At one job we got monthly reports and could compare with other sales people. I was somewhere in the middle with actual sales, but rarely had returns because I wasn’t pushy, but the top sales people had loads of returns so they were no better off than me (though they got all the awards lol).

Definitely agree with your advice: walk away if you’re uncomfortable or if you need to shop around. Just be in charge–it’s YOUR money. YOUR purchase. You don’t owe that salesperson anything. A nice way to leave, though, is to ask for the person’s card or name so you can come back (if you do) and make sure he or she gets the sale and the commission, especially if a lot of time or effort was spent to help you. Some sales people really do want to help plus make money for it :)

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Jenna, Adaptu Community Manager July 27, 2012 at 12:05 PM

I think I’m a sales person’s worse nightmare. If I feel like I’m getting “bullied” I just walk away. Usually I need help (I’m not the most fashionable dresser) but there is a difference between being helpful and giving me some points and pushing a million options and color choices on me.

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Becky July 27, 2012 at 12:10 PM

Anytime they tell me “this offer is only good for the next ____ hours or days”, I take this as a big red flag. Doesn’t mean the product isn’t good. Doesn’t mean the price isn’t good. But anyone who really wants to sell me something now will want to sell it to me later. I have ALWAYS regretted it when I caved into buying things under pressure. ALWAYS.

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William @ Drop Dead Money July 27, 2012 at 12:19 PM

Good article! The key is you have to be on top of your emotions when you go shopping. Very few people get caught with outright lies, but almost all get caught by sales people who are trained to exploit our emotions.

Here’s something I dismissed at first, but I now follow religiously: eat before you shop. On a full stomach, you’re much less likely to fall prey to overzealous salesmanship. It might not work for you, but it’s worth a try. Funny how it works for me, though. (I’m trying to use it as the explanation for my weight problem. I’m sure it will work… someday!)

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Britt July 27, 2012 at 1:58 PM

LOL this is why I mostly buy things online now :) But yes, I have been too easily talked into a gym membership I never used, a $1000 dryer vent cleaning (vs. the $100 one I thought I was going to get when they got to my house,) and the more expensive versions of whatever product I needed. I’m getting better…but still use the “Ooh, I’ll have to talk to my husband” excuse more than I’d like.

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Zach H. July 28, 2012 at 8:02 AM

If you really want to play hardball with the salesmen try this tactic: http://bigthink.com/ideas/41819

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Rebecca July 30, 2012 at 2:36 PM

Yup fell for this several times one was for a dating service which ended up skipping town without returning a lot of peoples money. The other was trying to find a low interest credit card. They sent me a very thin pamphlet which cost me $350 for it very irritating and annoying. I went with Capital One and now they are just as high as every one else.

Thanks for the article it helps to know that others have been pressured in a sale no matter what it is.

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Christa Herzog July 31, 2012 at 5:36 AM

I found it amusing to read your article, because I have learned to be a salesman, even though I never was a good one. So I never have the problem to buy something I don’t really want. Well, before I go shopping I know what I want. Reading the comments that people have been talked into buying something they later on didn’t enjoy, shows how powerful a few words are.

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Kris July 31, 2012 at 8:56 PM

Sometimes it is hard to walk away from a good salesperson. If they are good – not just at the tactics but at building the relationship, sometimes I’ll feel bad about NOT giving them the sale. After all, they are just business people at heart. They key is to have some idea of what you want or what you are willing to spend. That makes it easy to keep within your budget and still give them their reward for a job well done. If you are ever in the presence of a sales “star” you will never forget them (hopefully in a good way!)

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CincyCat August 3, 2012 at 3:59 PM

I actually found the first point of advice, to “appear” like you want to buy, rather odd. I can’t stand it when salespersons “hover” because they somehow think I’m an easy target. (Furniture stores are the worst for this!) When I’m thinking about form & function, and mentally (or physically) calculating exactly how many inches of foam and years of warranty coverage I’m getting per dollar spent, the last thing I need is someone standing over my shoulder pushing to make a sale. *Shudder*

I use the opposite tactic. I politely ask for a card, ask them to point me in the direction of the department I want (unless I’ve been there before), and then I tell them I’ll find them if I need them, and then pointedly walk away. If another salesperson shows up, I simply show them the card I have from the first guy/gal, and then they leave me alone. I can then calmly and rationally look over what’s there, decide if I want any of it, and leave the store if I so choose – all without being accosted.

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Kent at MoneyEducate August 8, 2012 at 2:55 PM

This is a good reminder, if nothing but to have our antennas alerted- thanks. Warranties are the worst, the other day I was offered one for a $5 thumb drive- really! We sometimes buy them for laptops and the kids cell phones- they have paid for themselves, but never anything else.

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