Five years ago Jordan’s MBA program was headed to Russia and I was completely jealous. I’d never been. The way his work schedule fell, he was able to go 10 days early to travel and explore. I desperately wanted to go and we started sketching out what a trip would look like.
We could visit 3 cities in one week:
- Tallinn, Estonia
- Helsinki, Finland
- St. Petersburg Russia
The only thing standing in my way was the airfare.
Pricing it out it would be just under $1,800 for a round-trip ticket. Through some miracle, I happened to have a voucher for $1,900! (I had spent an entire day being bumped from flights and negotiating the compensation. Best day ever. I arrived at my destination 6 hours late but with $1,900 in travel vouchers).
The trip to Russia was the perfect way to use the vouchers.
I checked the expiration date and saw that I had a couple of months before they expired. The trip was in 6 months. I had plenty of time to call the airline, use the vouchers, and book this ticket.
I hope I’m not the only one who does this, but I woke up months later to realize I had completely forgotten to book the ticket. And what’s worse, Jordan had booked his flight weeks before and had gently reminded me (over and over) to book mine.
I was panicked.
After debating what to do, I decided my only option was to call the airline and convince them to reinstate the vouchers.
I was signed up for their frequent flier program but I was a so-so customer. However, Jordan had great status with them so I decided to use his business as my bargaining chip if I needed to.
Side note: I could have had him call, but he was out of town for work and I was really not excited to admit my oversight to him. I still don’t actually think I’ve told him this story. He might be reading about this here for the first time. Hi, Jordan!
I called customer service and politely explained that I was trying to book at ticket from LA to Estonia and then back to LA from Russia. I had all the flight numbers ready and read them off to the woman on the phone. I then went into my predicament:
Me: “I’m trying to use these vouchers that I was issued, but I think they may have expired. Is there anything I can do to get an extension on the expiration date?”
Rep: “Ma’am these vouchers expired last month. Unfortunately, you didn’t use them in time.”
Me: “Oh no! I forgot to call about this flight sooner. You see, I got these vouchers because I was willing to be bumped from 3 flights in one day. I was holding onto them to use for a special trip.”
Rep: “I’m sorry, they’ve expired and there’s nothing we can do to reinstate them. The system won’t allow it.”
(she clearly doesn’t care about my special trip so I changed tactics.)
Me: “That’s so frustrating. I can’t believe I made this mistake. I’ve been a gold member with you for 7 years and I fly your airline exclusively. Hmmmm. My husband has also been a platinum member for years and does all of his business travel with you. We’ve loved being loyal customers and I really don’t want that to change. Is there anything we can do here?”
Rep: “Yes, I do see your history with us. Thank you for being a loyal customer. Do you have your husband’s frequent flier number as well?”
Me: “I sure do. It’s XXXXXXX.”
(It’s silent as she types it into her system and I’m thinking just please, please let me have this!)
Rep: “Just give me one minute and let me check on something for you.”
I spent a few minutes on hold and she came back:
Rep: “I see that the flight you want to book is $1,786 and your vouchers were worth $1,900. As I mentioned, I can’t reinstate the vouchers, but I do have another solution. I can book this ticket for you right now and credit your account with $1,786 to pay for it. You will lose the extra $114 that you would have had with the voucher, but this flight that you’re booking today will be 100% paid for with the credit. Does that seem like an acceptable solution?”
Me: JAW DROPS. “Yes, that’s so great! This is why we both love being customers of your airline!”
Negotiating more than just your salary
After that experience I was curious:
- Could I pay less for my day to day services?
- What about that pesky credit card fee – could I negotiate that?
- My gym membership?
I wanted to pick up the phone and ask for a discount, just like I’d done with the airline, but I wasn’t sure what to say. Who should I ask for? How could I make them want to say yes to giving me a discount?
I did a quick google search and stumbled upon this quick video by Ramit Sethi. It’s a great video that breaks down examples of bills you can negotiate and how to phrase your ask.
After watching the video I realized that I was making this much more difficult than it actually was.
The key to negotiating your bills is to:
- actually, pick up the phone and make the call (this is the most difficult part),
- remind them that you’re a valued customer, and
- ask what they can do to help ensure you remain a valued customer.
After watching the video, I was hooked. What else could I negotiate?
What can you negotiate?
If you are setting up the no budget, budget and lining up all of your bills to be paid the first week of the month, this is a great chance to take the time to negotiate.
When looking through your monthly payments, eliminate any that you don’t really need or want anymore. Did you use to love that fitness app, but you haven’t opened it in 3 months? Cut it.
After cutting things that don’t really fit in your life anymore, what’s left over are the things you want to try to negotiate. This can include:
- Your rent!
- Gym membership
- Cell phone, internet, and cable
- Household services (like regular pest control)
- Fees (regular or one-off fees from your bank or credit card)
- Insurance (home, renters, car)
Ok, but how do you actually do this?
The first thing you need to remember is that companies pay a lot of money to acquire new customers. The more competitive the space, the more they want to keep you. You are valuable! (unless you’re a horrible customer that never pays on time. In that case, you’re probably a lot less valuable).
Here are some tips for having a productive conversation:
- Get the right person on the phone: A lot of times the first person you get on the phone isn’t the right person to speak with. That’s ok! You’ll likely have a lot better luck if you speak to their manager or ask to be redirected to the cancellations department. In the cancellations department, they know exactly what to offer to get you to stay.
- Don’t be a jerk: Who would you rather do something for? Someone who is screaming at you or someone who is a joy to speak with? My natural inclination used to be to get a little miffed when first told ‘no’. I’ve since learned that if I can keep my cool and take the ‘no’ as a starting point for the conversation, things move a lot more smoothly.
- Reinforce that you know you’re a valuable customer: Again, don’t be a jerk, but it helps to mention that you provide them with a lot of business, you pay on time, or you’ve had a long history with them. Build your case.
- State that you’d like to stay but only if a condition is met: You’re not giving an ultimatum, but you do want to give them the signal that you’re open to remaining as a valuable customer if they can help entice you to stay.
- Know what your options are to walk away: If you are locked into your cell phone contract, you don’t really have much to negotiate with. But if your contract is up and you’re ready to walk, your negotiating power just went way up.
- Don’t treat this like a win/lose situation: I used to get really awkward thinking that if I was successful with negotiating, I’d win and the other person would lose. Negotiating is never a win/lose situation. If you negotiate a lower rate the company still wins by keeping you as a valued customer.
Here are some exact examples of how I’ve done this:
I’ve already told you how I negotiated to get back my travel credit, but since then I’ve done this numerous other times. And I should probably do it more.
I just realized that the introductory rate on our internet has expired – it’s time to call and find out what other options, aside from paying full price – might be available.
To give you another idea of how this has worked, I negotiated our pest control services:
We were using a regular pest control service at our rental home. They were coming quarterly and doing an OK job, but we didn’t need everything they were offering.
We’d used them for 1.5 years and I didn’t want to switch but I also didn’t want to keep paying as much as we were.
Me: “Hi, we’ve been using your services for quite a while now and while we’re happy with most of them, there are a few things we’d like to change to our plan.”
Rep: “We don’t offer changes to plans. This is the service package we provide and our price.”
Me: “Oh, I see. Because we’d like to not get these few parts of the package. We don’t need them anymore. But we’d really like to continue using you for these parts of the package.”
Rep: “We don’t do a la carte options here. It’s a package. You pay for the package and you get the package.”
Me: “I see. Here’s where I’m stuck though: the service on these parts of the package hasn’t been great. It really hasn’t met our needs. But we do like the other services that you provide. I’d hate to have to switch to a different company because we can’t work something out here. But if we can’t work something out I’m going to have to cancel and go with (competitor).”
Rep: “I really can’t help you.”
Me: “Would it be possible to speak to a manager to see if we can work something out?”
[Put on hold and then when the manager comes on I explain the whole situation again]
Manager: “Ok it looks like we can reduce your quarterly bill and service package. I’ll just make a note in your file that you won’t get these two services included anymore.”
This wasn’t a $1,700 win for the airline but it has saved us hundreds.
- We’ve also negotiated our rent, which I wrote about in detail here.
- We’ve shopped around for insurance, bundled the plans that we needed, and received a discount.
- I’ve negotiated bank fees when we were charged $15 for not having a large enough deposit into our checking account one month.
- I negotiated a late payment fee on my credit card (this was before I had my automatic payments set up. I was a disorganized mess.)
It’s your turn to negotiate anything
Wouldn’t you like some extra cash back in your pocket each month?
- Take a look at any recurring fees that you are paying – and that you haven’t negotiated in the past year – and make a list.
- Start with one that you know will be easier to negotiate (like your internet or cable)
- Pick up the phone.
THE LATEST & GREATEST
“Don’t you dare undervalue yourself. Just because one person is trying to get a bargain basement rate, doesn’t mean that’s what you’re really worth.”
Faced with a hard situation at work, this woman leveraged her story of loyalty to get a promotion and a raise that almost doubled her salary. Really.
After a failed attempt at negotiating, this grad student approached the situation differently and learned a valuable lesson: don’t waste your time asking for something the other person can’t give you.
SIMPLIFY YOUR MONEY. LIVE YOUR LIFE.
A guide to help you embrace freedom, overcome overwhelm, and live a life that’s better than fine.
Money should be simple.