Author Topic: Is it OK to lie during negotiations?  (Read 5612 times)

EarlyRetirementGuy

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Is it OK to lie during negotiations?
« on: July 10, 2014, 10:23:45 AM »
I recently lied about a price one company had quoted me in order to get a better quote from another company. At the time I didnt even think about it but dragoncar picked up on it; http://forum.mrmoneymustache.com/share-your-badassity/just-cut-my-recovery-renewal-by-over-50!/msg340050/#msg340050

Which made me wonder, what do fellow Mustachians think about lying during negotiations in order to save money?

Personally I think that a company's job is to charge as high a price as they can get away with, and the consumers job is to negotiate this price down to as low as they can achieve to the point where the company still makes a profit and the consumer is happy with the price. We all know companies lie about "Limited Time Offer" or "Reduced, now half price!". Are we ok to do the same to them?

Habilis

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Re: Is it OK to lie during negotiations?
« Reply #1 on: July 10, 2014, 10:29:50 AM »
You have to live with yourself, however you choose to live, and this applies to way more than just negotiating. Each person has to decide what they're comfortable with and there are many shades of grey.

Two great books on this topic I'd recommend are:

The Speed of Trust, Steven M. R. Covey (an argument for why white hat techniques in negotiating and many other regimes of business and relationships deliver superior quantifiable results).

Secrets Power Negotiating, Roger Dawson (also full of great stories and examples of white hat and black hat strategies and lots in between)

matchewed

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Re: Is it OK to lie during negotiations?
« Reply #2 on: July 10, 2014, 10:33:13 AM »
Well you're not doing the same to them. You're deliberately misrepresenting the situation in order to benefit. A wrong for your own selfish gain. There's no prettying that up.

A company who is doing a reduction in price is choosing to have a lower profit on their product/service. It is not the same thing as lying to you. They're being honest to you.

A way of doing the same thing you did without resorting to lies is by asking for deals, remind them you're a loyal customer, and then if they don't drop it lower go ahead and let them know you'll call them back and go talk to other companies. Then you're not lying.

So IMO no, lying in a negotiation undermines the negotiation and just paints you as a dishonest person.
« Last Edit: July 10, 2014, 10:35:16 AM by matchewed »

Dr. Doom

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Re: Is it OK to lie during negotiations?
« Reply #3 on: July 10, 2014, 10:34:44 AM »
You have to live with yourself, however you choose to live, and this applies to way more than just negotiating. Each person has to decide what they're comfortable with and there are many shades of grey.

Completely agree.  Personally, rather than lie, after getting a sticker price on an item, I'll say something like "Is this the best you can do?  I'm doing comparison shopping so it's important for me to know if you can go any lower, otherwise I'll cross you off the list if and when I get a better deal."

With contractors in particular, this line gets me their real price just about every time and I don't have to BS about it.

But different approaches work for different people.


Fonzico

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Re: Is it OK to lie during negotiations?
« Reply #4 on: July 10, 2014, 10:36:14 AM »
This is a good question. On the one hand, the "honest is the best policy" mantra of our childhoods comes to mind. But the truth of it is that if you are completely honest, you are going to get taken advantage of, and other people are definitely lying, so it puts you at a disadvantage.

So in an absolutist moral sense, yes, it is wrong. On the scale of awful things you can do, though, it's pretty low.

I've been on both sides of it. I've lied about my current salary during negotiations (I was being dramatically underpaid, and didn't want that to be used against me). I've also had a customer tell me they got a lower quote for job. When I told them to go ahead and accept the other one, since I knew mine was competitive and if anything, a little under priced, they came back a couple days later and accepted mine.

Personally, I wasn't offended by the lie. I know they were just trying to get the best price possible, which I had already given them. It was my responsibility not to let myself get low-balled.


Perhaps a better question is whether you are prepared to deal with the consequences if the truth comes to light. However slim that chance may be, I feel that's a pretty good rule of thumb for grey-area moral decisions.

Daley

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Re: Is it OK to lie during negotiations?
« Reply #5 on: July 10, 2014, 10:37:59 AM »
Are we ok to do the same to them?

Stooping to their level (or lower in your case) does not give any of us the high ground, and I'm of the opinion that a man's value is defined by his word. Doing that sort of thing weakens your integrity and fosters further distrust within the entire system.

The worst part about your specific situation is that you could have been wholly honest and still achieved the same results simply by stating, "I have been paying XX amount, but I'm considering switching providers," instead of saying what you did. Some people may call this semantics, but at the end of the day, only the truth is the truth.

EarlyRetirementGuy

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Re: Is it OK to lie during negotiations?
« Reply #6 on: July 10, 2014, 10:43:45 AM »
Perhaps a better question is whether you are prepared to deal with the consequences if the truth comes to light. However slim that chance may be, I feel that's a pretty good rule of thumb for grey-area moral decisions.

This is a good question. In this situation there would be no consequences. The company offered me a price and I accepted. How I got to this offer may be questionable by some however if they wernt happy to make the offer they wouldnt have done so.

totoro

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Re: Is it OK to lie during negotiations?
« Reply #7 on: July 10, 2014, 10:45:35 AM »
Don't lie.  You are sabotaging your own credibility and there are often non-immediate consequences ie. someone else finds out and doesn't trust you to speak the truth. 

EarlyRetirementGuy

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Re: Is it OK to lie during negotiations?
« Reply #8 on: July 10, 2014, 10:48:18 AM »
still achieved the same results simply by stating, "I have been paying XX amount, but I'm considering switching providers"

Its a good point, but wouldn't have achieved the same result as it would have taken much more of their and my time, They would have immediately asked what the renewal quote was (happened same time last year). I'd have said 60, theyd have offered 50, id have gone back to the other who would have offered 40, and it would have gone back and forth until one of them hit their 10% profit margin and refused to go any further.
This wasnt a SME, its a huge national company, all the quotes are done by the computer system.
« Last Edit: July 10, 2014, 10:50:39 AM by EarlyRetirementGuy »

Thegoblinchief

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Re: Is it OK to lie during negotiations?
« Reply #9 on: July 10, 2014, 11:05:15 AM »
I can lie with an absolutely straight face but I choose not to. Lies don't become us.

What really frustrates me are people that I know are bald-facedly lying to me but management won't let me call them on it.

arebelspy

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Re: Is it OK to lie during negotiations?
« Reply #10 on: July 10, 2014, 11:26:46 AM »
After the last lying discussion we had, I'm happy to see so many here come out in favor of honesty.

Big +1 to a bunch of you.

Being an honest and genuine person all the time makes life better.
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EarlyRetirementGuy

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Re: Is it OK to lie during negotiations?
« Reply #11 on: July 10, 2014, 11:33:24 AM »
"I have competitively priced out XYZ service with your competitors. I would like to stay with your company as I have been a loyal customer however I need a price of $28 to stay with your company. Can you offer that price?"

You aren't saying that their competition is going to give you $28 as a price, you are just saying you will walk if you don't get the price you want.

That's a great way of putting it. I'll use this in future :)

arebelspy

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Re: Is it OK to lie during negotiations?
« Reply #12 on: July 10, 2014, 11:39:21 AM »
Mod note: question's been answered, locking at request of OP.  If you would still like to discuss this, feel free to start your own thread.  Cheers!
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.