Summary: Breaking the price up into small increments to lessen the impact of the total amount.
With this tactic, you break dollars and cents down into such small amounts that your counterpart doesn’t realize he is dealing with large sums of money.
Last year, at the San Diego County Fair, I was intrigued by a vendor selling ceramic knives. When she finished expertly cutting up everything in front of her, I made the mistake of asking how much the knives cost. Her reply was, “Peter, these knives have a full guarantee for a period of ten years. Over those ten years, they are going to cost you only about eighteen cents a day.”
What this saleswoman did was break the total price down into the daily cost. Obviously, almost anyone can afford eighteen cents a day. I am still kicking myself for falling for the Funny Money close.
Car dealerships are masters of the Funny Money tactic. They try to get the buyer to think only about the monthly payment and keep him in the dark about the total price and interest rate until the deal has been struck.
In both examples above, the buyers should do their homework and spend some time working out the total price. If their counterparts are unwilling to provide a full disclosure of all terms, the buyers should simply walk away from the deal.
Have you used or encountered this tactic in your negotiations? If so, how’d it go?