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The Art of Bargaining While Backpacking in Central America

The “Gringo tax” is a reality that people backpacking around the world must deal with on a regular basis. When locals spot a foreigner amongst them they tend to jack up the price of whatever they are selling, be it food, clothing, or some sort of service. Sometimes this is a modest increase in price from what a local might pay for the same item, but sometimes prices can be raised as high as ten times the original amount, or even higher! I completely understand the reasoning behind the “Gringo tax”, and am far from offended or upset about it, it is just a reality of being a backpacker. It is a reality, however, that makes me completely comfortable with another aspect of traveling…bargaining.

While Backpacking in Central America I quickly learned that I was expected to negotiate for almost everything I purchased. Basically the only time it would be rude to do so was when there was a posted price or menu price printed somewhere. At first I wasn’t doing a very good job at the whole bargaining process. They would say something like “10 Quetzals” (which is Guatemalan currency) and I would reply with the ever so tough bargain of “No, No, 9 Quetzals”. I would get a chuckle or smile in return and they would gladly agree to the exchange.

As the weeks passed and I became more comfortable with my surroundings I started to truly understand what I could actually get away with when it came to bargaining there. Many times the prices were raised so high that I could go as law as 50% off from the starting point that I was given. It became a routine part of my day to negotiate prices, especially when I was getting more than one of something.

Needless to say, I learned a few things I figured I could pass on to the rest of you backpackers on a budget out there…

1. If you can, try to see what a local buys a similar item for. There is probably only a very small chance that you will get it for this price, even if they sell it to someone else right in front of you. They know you will pay more and sometimes won’t settle for less, but at least you can use as leverage for a starting point.

2. If you don’t see a local around, try to see what other backpackers pay. Chances are that you can go lower than what the people around you are paying.

3. If there is no one around for you to base your price off of, first ask how much, and then cut the offer in half. Will you ever get it for half with this method? I would be comfortable say no, probably never. But there is a pretty good chance you will end up somewhere in the middle of the two extremes.

4. Don’t be afraid to walk away. It is amazing how quickly prices will drop if you act like you are giving up with negotiating and moving on. Even for items that you actually NEED, a little acting on your end can go a long ways. Keep in mind, sometimes they know you won’t get it cheaper anywhere else and will not go chasing after you. It is a risk you take, but they way I look at it is, you can always come back later. They aren’t going to refuse your money!

5. Understand that sometimes there just isn’t any negotiating to be had. Some places have set “Gringo prices” that no one will budge from. A great example of this was my experience on Lake Atitlan, in the highlands of Guatemala. Multiple towns that backpackers and locals alike need transportation to surround the lake. The ferries running on the lake had three different prices. There is one for the indigenous Mayans living around the lake, one for the locals of Spanish decent, and finally a price for tourists. There was literally ZERO negotiation for these prices. They would charge the person right next to you a fraction of the price that you had just been charged. If you protested you would often get a response like “If you don’t like it, you can swim”. I didn’t want to swim, and neither did any other backpackers I saw.

Some may argue that backpackers should just accept the prices they are given and not try to talk things down. After all, we have enough money to travel around the world don’t we? Granted this might be a true statement, but most of us are traveling on a pretty tight budget. It is up to each person to decide their balance between supporting a local economy and keeping themselves on the road for as long as possible, and I respect the fact that others choices might differ from mine. They way I look at it though, is if they can afford to sell it for one price to the rest of the country, they can afford to sell it to me for a similar price.

What’s your take on bargaining your way around the world?

  1. Ted Nelson

    This is a great post and some great tips. I am a horrible bargainer and the rationale you used in the first paragraph makes complete sense. I think most vendors actually expect and want to bargain. It is part of their job and I think many actually like it when backpackers bargain. They usually have fun with it and so should we.

    Sometimes the bargaining can go too far. I was out with a group of backpackers in Cambodia and they were so tough on their bargaining over what in reality turned out to be cents that I finally got frustrated with them and actually waved goodbye and walked away from them. I did not want to be affiliated with that level of cheapskateness.

    1. Matt

      It is very important to find your own comfort level with it. You’ve got to balance between what is actually a fair price, and what you can actually afford to spend. If I’m trying to backpack on $15 a day then I’d be more willing to drive a price down, but that isn’t really the case for me. I would usually know what the “local” price was and I almost always paid a higher price then that, which I’m ok with. As long as I’m not paying the, sometimes, eye gauging prices that are thrown my way. I bargained with everyone, even the westerners who owned hostels throughout Central America. It is just a way of life there.

  2. Tom Volpe

    Great post Matt. I think this is something that many backpackers find a real challenge.

    I’ve always thought that a steady middle road is the best approach to bartering. I’m keen not to get to caught up in bargaining over a few pence. Haggling is an experience many westerners find uncomfortable and I don’t like to let it interfere in my enjoyment of a place. Equally, when you are travelling on a budget you definitely don’t want to let people make a total mug of you either.

    I always say barter if you need to or if you really feel that someone is trying to take advantage of you, but if you are paying a bit more than the locals and you can afford it then just let it go!

    1. Matt

      Definitely agree with you here. Be sure to pick your battles appropriately. 25 cents isn’t much to most westerners but might be a significant amount to whomever a person might be dealing with.

  3. Jaime

    Oh i love bargaining when I travel. Thats the only way I will buy anything. Going to Mexico for long vacations during the summer have made me great at bargaining. When you are at any market you have to know that any item is negotiable. Oh & #4 is the best way to get your the price you want. In NYC i wanted to buy my mom a nice jewelry set but was $20 i ended up getting it for $8!!! We have to work it…lol!!!

    1. Matt

      Yup, you can bargain everywhere! Definitely a good feeling when you are able to talk something down that much.

  4. Fred @ One Project Closer

    I am actually IN Guatemala RIGHT now and was just in Chichicastenango with the family. We bought a large piece of art. I don’t feel like I got as good a price as I could have. This is a 2 meter by 1 meter oil painting – of Atitlan at Sunset. I paid US$235. My wife had looked online about buying this type of print in the states and they wanted about $1000. After walking away, I felt like I could have gotten this for MUCH cheaper. The shopkeeper started at $340 so I felt like I did already, but not great.

    Unfortunately, we only had 1 hour in Chichi, and we wanted to see a few shops. The time crunch really limits your power. Plus, I have no idea what I should be paying for this–there are no locals buying paintings!

    I had already priced a similar painting in Antigua, Guatemala for a rediculous $1200US, so even if I should have gotten this for $50, I don’t feel horrible!

    1. Matt

      Yea, sometimes it is hard to tell how low you could have gotten things. But don’t dwell on that. It sounds like you got something you really wanted and you got it for a price that you never could have gotten anywhere else, so you did good in my book! Good luck with the rest of your trip, and happy travels!

  5. Kelly @ travelbugjuice

    Hey Matt!!

    Good to meet you and get to delve into your blog! You’ve got some great stuff here! I just got back from South America and was also a TERRIBLE bargainer. I think the trick I walked away with was remembering not to beat myself up over a lost few dollars.

    The things I bought in South America, now that I’m back, mean the world to me. And most of them, I don’t remember how much I paid for.

    Those are the things I cherish the most.

    1. Matt

      Yea I agree that it is pretty unlikely you’ll remember how much you paid a few months later. The better you get at bargaining though, the longer you can stretch your budget!

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