To haggle or not to haggle: What do the vendors say?

British charity Tourism Concern warns in its Ethical Travel Guide that always haggling for the lowest price can make the world’s poor even poorer. And in September last year, a British woman made headlines when footage emerged of her being chased by a Nepali shopkeeper wielding wooden clubs and hurling rocks.

The tourist had made a big fuss about being charged the equivalent of $1.50 for a cup of tea. In the video, the shopkeeper can be heard shouting: “You English people are rich! Why bargain?”

RELATED: How to ride a scooter in Southeast Asia

Despite this, haggling can be both ethical and enjoyable—as long as you approach it the right way. Bargaining well is about respectfully reaching an agreement on a fair price that both the buyer and seller are happy with. As Tourism Concern says, a fair price is not always the cheapest price.

In the Nepali tea incident, another issue was the tourist had drunk the tea before they’d settled on a price, meaning she’d effectively given up her ability to bargain. And like many an ugly tourist before her, she’d insulted the shopkeeper’s honor by claiming to have been ripped off.

In many cultures around the world haggling is simply a part of everyday life, such as in Nepal—and it’s expected that many tourists will participate. They’re also expected to pay a higher price.

Parvati Budathoki sells jewelery and antiques at a market in Kathmandu’s Durbar Square. She has no issues with travelers from wealthy countries haggling over price.

Some tourists get extremely upset about this so-called ‘tourist tax’, but it seems only fair that locals can maximize their income by setting prices based on what a buyer can afford.

“It doesn’t annoy or irritate me,” she says. “Foreigners have to bargain because we put the price that way. If we say 2000 rupees, they reduce it by half, especially in the off-season. And so we have to say twice the actual price.”

Budathoki happily admits she charges different prices to tourists than Nepalis.

“Nepalis also bargain, but we have Nepali price for them,” she says. “They understand the language so we only put up the price in a way that they can reduce it by 100-150 rupees. I don’t really put up my price too much for foreigners. For something that costs 500 rupees (around $5) I’ll say 1500 ($15). I won’t sell for less than 600 ($6).”

Budathoki’s initial asking price equates to a profit of 1000 rupees—in other words, that’s 10 times the minimum profit she’ll accept. Given that many people in Nepal earn less than 300 rupees a day, even tourists who bargain her down to 1100 rupees still provide her with two days’ wages.

Some tourists get extremely upset about this so-called ‘tourist tax’, but it seems only fair that locals can maximize their income by setting prices based on what a buyer can afford. Why should someone earning $3 a day pay the same as someone who can afford to travel the world for leisure?

RELATED: How to travel like a travel writer

The world over, a poor local will get one price, a wealthy local another. Rich tourists often pay the highest price, even after bargaining.

Raditya Prabawa has been haggling on prices in the markets of Jakarta his entire life. A resident of the more affluent South Jakarta, even he gets charged higher prices when he shops in the poorer areas of West Jakarta. “They’ll mark the price up quite high based on what I wear, what my phone is, how I speak to them and my dialect,” he says.

Prabawa finds it funny that some tourists feel guilty about the process—mainly because he thinks we have little chance of scoring a good deal. “You think you have got a good bargain, but in reality, you’ve still paid a lot more than you had to,” he says, laughing. “Tourists will sometimes pay two or three times the actual price.”

Liz Manning, Intrepid Travel’s responsible business manager, says haggling on price is “absolutely something people can do—if it’s done respectfully”. That means not getting aggressive, not acting as if merchants are trying to rip you off, and not treating it like a sport in which the lowest possible price wins.

If you set out to make every negotiation a win/win, then haggling can be great way to interact with locals and to learn about another culture.

The real trick is in working out what’s a fair price to pay. Talk to locals, your tour guide, or the staff at your hotel about how much you should expect to pay for common items. Read travel forums, check out the prices at similar stalls in the market, and ask lots of questions from the seller. If something has been made locally, by hand, or it took a significant amount of labor to produce, it’s worth paying more for than say, imported goods from China.

But perhaps you still have ethical concerns. If you can afford to pay whatever they’re asking, you may think: “Those few dollars mean nothing to me, but could feed this person’s family for a week.” So then what?

Unfortunately, tourists who are unwilling to haggle can drive up the cost of food and essential items. “You run the risk of causing prices to be elevated for locals,” Intrepid Travel’s Manning explains. If a merchant can sell a tourist a mango for $5, they are less likely to sell it to a local for 20 cents. She says a better strategy is to negotiate a fair price and then either give the merchant a tip, or let them keep the change.

While merchants are unlikely to sell anything below cost—no matter how well you negotiate—there are some exceptions. In Nepal and parts of Southeast Asia, it’s considered good luck to make a sale as quickly as possible after the stall opens.

“If it’s early morning when the shop has just opened, we sell it for loss just to make the sale,” Budathoki explains. Merchants are also likelier to accept lowball offers in the tourist industry’s off-season, at small markets with less foot traffic, and towards the end of the day. If you set out to make every negotiation a win/win, then haggling can be great way to interact with locals and to learn about another culture.

“Do it with a smile and a sense of humor,” Manning adds. “Show gratitude, take an interest in the goods you’re purchasing, and try and enjoy it.”