When MRP equals minimum retail price

When MRP equals minimum retail price
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First Published: Fri, Nov 16 2007. 12 21 AM IST

Fayed bought a Dis Moi Oui (‘Tell me yes’) ring at a discount
Fayed bought a Dis Moi Oui (‘Tell me yes’) ring at a discount
Updated: Fri, Nov 16 2007. 12 21 AM IST
It’s official now. Even the so-called engagement ring that Dodi Fayed was going to give Princess Diana was bought at a discount. The inquest into Diana’s death was told that Fayed paid the equivalent of £11,000 (approx. Rs8.9 lakh—not exactly a princessly sum for an engagement ring) after obtaining a discount from Repossi, a jeweller on Paris’ Place Vendome. The bill, which was shown to the jury at the inquest, shows two prices—the undiscounted one (which Dodi did not pay) and the price after discount (which Dodi paid).
Ah, the rich and their discounts! It always startles me how keen the rich and the super rich are to demand discounts. In film director Michael Winner’s autobiography, he recounts how Sophia Loren taught him to always ask for a discount. She never bought anything at full price and had no difficulty in wangling generous discounts at all shops.
Fayed bought a Dis Moi Oui (‘Tell me yes’) ring at a discount
In my experience, the richer you look, the more willing fancy shops are to give you discounts. Many years ago, I met up with an Indian industrialist for lunch in London. Afterwards, he said he had to wander into Cartier on Bond Street to buy a watch. He selected the one he liked. It cost £3000—a not inconsiderable sum in the early 1990s, but loose change for him.
When it was time to pay, he asked, almost as a matter of routine, “And what is the discount?” The shop assistant went away to fetch the manager. Hectic negotiations ensued. My lunch companion barked terms at the Cartier staff (“I am paying cash. Surely I get a discount for that?”) He left, the watch in his pocket, having spent several hundred pounds less than you and I would have had to pay.
I asked him about the discount demand. “Let me give you a tip,” he said. “If you are paying cash, always ask for a discount. They are saving on the payment to the credit card company anyway. Plus, they need to make big sales so they’ll usually agree.”
He’s probably right. But, on the rare occasions when I’ve made a big purchase and paid cash, I’ve never had the nerve to ask for a discount. Something about my middle class upbringing makes me feel that it would be cheap and unbecoming to do so.
But there’s no logical consistency to my stand.  There are areas where I will ask for a discount even if I don’t use the term itself. If I’m buying an international air ticket, I will look for the best deal and for a travel agent who is willing to shave his commission to a bare minimum. Or, if I’m booking a hotel, I’ll look for the best rate (which is always below the rate quoted on the tariff card) and see if they can throw in extras (free airport pickup, upgrade to suite, late check out, et cetera).
Why do I feel no embarrassment at doing this? Well, because in the hotel and airline business, it is assumed that only an idiot pays full fare or rack rate. You are expected to look for good rates. But when you wander into a shop, you somehow assume that the price on the label is the one you are expected to pay.
But it is not that I’m against the principle of discounts or freebies. I do most of my shopping at sales anyway—though there, I take the line that the 50% discount is clearly listed on the label and available to all. Nor am I against the odd free gift. Often, when I’ve spent a certain amount of money buying cosmetics for my partner, the woman at the counter will throw in a freebie. I do not contemptuously return it arguing that its acceptance would impinge on my integrity.
Sometimes, friends refuse to charge full price. Munna Jhaveri of Joy Shoes in Mumbai, who makes nearly everything I wear on my feet, will always charge me less than the list price.
While I am always embarrassed when Munna shaves something off the bill, I usually end up gratefully accepting the discount. So, why is that any different from demanding a cut in price at Cartier on Bond Street?
Plus, there’s the added complication of company money. When I am negotiating for anything on behalf of my company, I have no hesitation in demanding the best deal possible and as high a discount as they’ll give.
I am inspired by the story of Swraj Paul who, shortly after he had taken over a Canadian company, arrived at its headquarters. The managing director greeted him at the airport and drove him to his hotel. The hotel manager met him in the lobby and led him to a suite. “I’m not wasting this kind of money,” Lord Paul snapped. “Don’t you have a room?” They showed him to a normal room, somewhat sheepishly. “Good,” said Paul, “now how much of a discount are you going to give me on the rack rate?”
So, the business of discounts is a complicated one. My guess is that all it boils down to, eventually, is self-image. I feel cheap asking for a discount, so I will never do it.
When it comes to airlines and hotels, I do it because the word “discount” is never used and it seems like normal practice. When it comes to somebody offering me a discount unasked for (out of friendship, sales promotion or whatever), I am a little embarrassed but secretly pleased. And when it comes to company money, I feel no embarrassment because it is my job.
The rich suffer from no crisis of self-image. And so they save lakhsof rupees that they can well affordto spend.
And you and I end up paying full price.
 
Write to Vir at pursuits@livemint.com
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First Published: Fri, Nov 16 2007. 12 21 AM IST
More Topics: Discounts | MRP | Princess Diana | Cartier | Columnist |