Thursday, September 12, 2013
Is it Moral to Let a Sucker Keep His Money?
Mrs. Done by Forty took issue with a phrase I throw around from time to time: "It's immoral to let a sucker keep his money." I first heard the line in Rounders, when Mike McDermott quoted Canada Bill Jones, justifying a poker hustle he and Worm were running on a group of trust fund babies. Jones is also credited with saying that a "Smith & Wesson beats four aces," which gives a better understanding of the kind of person he was. Canada Bill Jones was a real and true riverboat gambler from the 1800's, who amassed a fortune off of marks using a three card monte scam, and then lost it all back just as quickly to professionals gamblers and short card cons. Jones died broke in a hospital, as Chicago area gamblers had to pay the local mayor for his funeral expenses. I don't know what it means that I agree with the ethos of such a man, but there it is.
When I am making a deal with another party in a "fixed pie" negotiation (i.e. - the thing being purchased is static, and we are simply negotiating price), I assume that we are operating under the same assumptions. Unless we're brokering a both-win scenario, we both know it is a competitive situation. No one out to cheat or lie, but we are both working hard to get the best deal for ourselves. The corporation selling me a good or service is trying to extract as much money from me as possible and isn't leaving anything in the bag. I am trying my best to pay as little as possible and I'm similarly using everything at my disposal. Each party is trying to improve its own position, and there is no benevolent third party looking out for either one of us. Simply put, every dollar my opponent wins in the negotiation takes another dollar out of my pocket.
Here's where I think the quote comes in. If I am dealing with an individual who seems like a novice, I am doing him no favors by keeping the kid gloves on and giving him a better deal than he has negotiated. Next week or next year, he is going to be forced to make another major sale or purchase, and he will make the same mistakes and omissions, quite possibly on a larger scale. If on the other hand, I do my best and he loses badly on the deal, he potentially will learn from that experience, will not fall for the same tactics again, and will hopefully be in a better position for all deals going forward. The benefits of learning from one's mistakes are potentially huge. We learn by interacting with a competitive world in a genuine way, and if we lose badly, we at least learn well and won't be fooled again. Or so I tell myself.
Mrs. Done by Forty's Take:
My wife is more moral than I am, and rightly reminds me that the people I am negotiating with are actual people. She would much rather feel good about the deal than walk away thinking she had taken advantage of anyone. She believes firmly in both parties feeling good about a transaction; anything less is a disappointment.
She also believes that I'm working under a faulty worldview. While corporations might be drawing up complex marketing & sales schemes to get my dollars, the woman selling her used Toyota on Craigslist is not. She, like my wife, is likely in search of a fair deal, not the best deal she can pull over on an unsuspecting rube. It's folly to assume her smile and kind demeanor are part of an act. When I go into the negotiation assuming she is out to take as many dollars out of my pocket as possible, and act accordingly, I am forcing her hand. While she initially wanted to forge a both-win deal, she is now forced into a competitive negotiation unnecessarily. In the end, she is not going to learn negotiation skills: she's just going to learn the guy she's selling her car to is a big jerk.
About 18 months ago, my wife and I had a bad habit of searching Craigslist for scooters. Not that we needed a second scooter, but we wanted one. My wife took ours out every day, and that meant I'd either be taking the gas guzzling car or my bike out in the Arizona heat. Over time we got good enough to spot a good deal, and even considered moving on a few of them, but nothing really jumped out at us. Then one Saturday my wife stumbled on what seemed to be a misprint: a 2007 Yamaha Vino in mint condition with less than 800 miles, for just $900. At the time, the Blue Book value was up near $1600 (and even today it's still around $1,400.) The ad had just gone up an hour ago, we knew it wouldn't last long, and decided to go for it.
When we arrived at the suburban house later that day, an impossibly pregnant woman who was due to have twins in less than a month, answered the door and walked us out to the garage to see the scooter. It was immaculate. The blue paint shined, the chrome was flawless, and it started right up. We took it out for a spin and it rode beautifully. She said it was a gift from her mother and with the twins on the way, there was no way she or her husband would be riding now. Not that it got out of the garage much anyway, except for her husband making a quick beer run now and again.
My wife and I talked for a bit and we knew we wanted to take it home. And $900 was already far too low of a price. It was clear that the seller hadn't done enough research to see what the scooter should sell for, and had made a mistake in her initial offer. Still, I wanted to do better. Even if she'd made a mistake, why should we pay the full asking price? While my wife saw a poor pregnant woman who shouldn't be forced to haggle over a few dollars, I saw a woman who clearly was never going to use the bike and just wanted it gone. As my wife walked down the driveway to be spared the embarrassment, I negotiated for a short while, citing that the bike seemed to be sitting unused for too long and that it might have some problems as a result. I opened at $800 and after a little back and forth, we settled at $850.
When I tell the story, my wife gives me a hard time for chiseling a woman who was about to give birth to twins over fifty measly bucks. Instead of remembering a fair deal on a good scooter, it's instead an experience that she feels guilt & embarrassment over...and buying those emotions for $50 is a bad deal no matter how you slice it. The odd thing is that I still kick myself thinking I could have gotten the scooter for much less, maybe $750, if only I was more aggressive with the offer and leaned on the fact that she had to get rid of the bike. Not to put too fine a point on it: I was never going to see this woman again. The scooter had the same quality regardless of the price: the only unknown was how little or how much we were going to pay for it. So she'd set the price far too low - what does that have to do with trying to get it as cheaply as possible anyway? What impetus is there to hold back, regardless of who the party is?
What say you, readers? Is better to be fair & feel good about a deal, even at a cost, or is better to try to get whatever you can, regardless of who you are dealing with?
*The photo of a Three Card Monte scam is from malias at Flickr Creative Commons.