How to bargain in Vietnam?

Shopping is a gateway into Vietnam’s cultural, social and culinary heart. In addition to offering affordable textiles, handicrafts and tailored attire, shopping is an easy way to meet local people, boost language skills and give back to the community. However, the bargaining process can be difficult and overwhelming to shoppers, especially who fly to Vietnam from Europe or North America.

Where to bargain?

Not every price is negotiable. A good rule of thumb is that if something has a price tag on it, the cost is non-negotiable. This includes restaurants, where prices are usually listed on menus or signs.
After you fly to Vietnam, there are some great markets where you can bargain in Ho Chi Minh City including:
Binh Tay Market (Thap Moi Street) is the wholesale destination for everything from dried shrimp to toothpaste to soccer jerseys.
Ben Thanh (Le Loi Street) is located smack in the middle of downtown and caters to the tourists that wander through.
Saigon Square (near the intersection of Hai Ba Trung Street and Le Duan Street) has all the brand names you remember from home, with none of the quality. Still, if you want a Chanel handbag, this is your best bet.

Why bargain?

Save money
Although not much, bargaining gets the best value for your money.
Develop social relationships and have fun
Bargaining is part of Vietnamese culture as through bargaining you can communicate, create and build up your relationship with locals. Also, some tourists just like to bargain all the time because they are fond of price negotiating.
Language practice
I promise you that there is no better way to learn to count in another language than through bargaining with vendors. It also inspires you to memorize useful new phrases such as “too expensive” or “no, this is not real Gucci.”

How you bargain?

After you fly to Vietnam, you are supposed to take into consideration some bargaining tips to get a better deal:
Smile
Bargaining is a game, not a fight to the death. It is vital to keep in mind that you will only be able to win the deal when you do it with grace and humor. So, just consider bargaining as a game or an entertaining activity and enjoy it.
You always need to smile when negotiating the price because most of the locals do not speak English well. The nicer you are, the more discount you can get. If you look grumpy they will not want to speak to you.
Compare prices
A research excursion to a fixed price store provides the greatest indication of an item’s value range - giving an amateur bargainer the confidence needed to later set a price and stick to it.
In addition, you should not bargain with the first person who approaches you because the first salesman often quotes the highest price. So, walking around to compare prices will enable you searching for a better deal later.
Walk away
Walking away is one of the most powerful tools a shopper has when bargaining, and the market trader's reaction speaks volumes. If you have offered a fair price and been rejected the seller will most likely chase you down to lower the price or agree with your price. If they couldn't care less then it is probably you that is being unreasonable. If you realize you were pushing too hard, don't feel too proud to come back either, there is no shame in paying the correct price!
Ask locals
If you are looking for something specific, ask a local what the going rate is before you head to the market. It helps to go into the negotiations with an idea of what you’re supposed to pay. Vietnam must have some of the most incredibly good and inexpensive personal guides anywhere.
The pricing knowledge you can get from a local is usually invaluable in terms of both time and money. You will usually be given the price a local Vietnamese citizen would expect to pay and bargain on your own.
Learn from others
One of the best methods for learning anything is to copy the actions of others. If you’re not ready to engage in your own negotiation, watch someone who appears to be good at bargaining - someone who enjoys the process, is confident and pays a fair price. Pay special attention to body language and prices. You will notice that better bargainers approach shopping like a social game and struggling shoppers appear defensive and uncomfortable. The next step is to try bargaining on your own.
Just back off and observe locals. You can see how much money they pay and then you know how much money you should pay. In this case, most of sellers feel awkward and embarrassed so they might either give you the same or even lower price.
Always carry small bills. 
Give sellers the exact amount of money. They are likely to give you the wrong change. It is very easy to confuse Vietnamese notes so make sure you know how much money you give them and how much they need to give you back. Check the notes twice!
Always bargain in native currency.
Stall vendors can quote the price of an item in either US dollars or Vietnam Dong, so it’s important to get to know exchange rates before shopping. You are supposed to bargain in Vietnamese currency (VND) rather than in USD or your currency as in Vietnam, conventional wisdom says anyone who has dollars can afford to spend them.
Local language
The first trick to bargaining in Vietnam is to do it in Vietnamese. Communicating in Vietnamese with a shop vendor at the beginning of a conversation sets a positive tone for the negotiation process. In addition, you might just be good enough to fool people into thinking you’re an expat accustomed to local prices and avoid inflated tourist quotes.
Start low, but not too low
Ask the shop owner to set a price and then make your offer in response. Start bargaining by quoting a price that is about 10-20% lower than what you think you should be paying. Work your way up from there. The final price is often 10-50% less than the starting value.

To sum up, bargaining is a ritual for Vietnamese. So, before you fly to Vietnam, you should master the art of bargaining. If not, you will end up paying more than you should. Thankfully things are changing for the better. Many places are moving towards the concept of set pricing. This includes some of the local produce markets where Vietnamese housewives do their shopping every day.

Sources:
http://www.pbs.org/hitchhikingvietnam/travel/bargain.html
http://www.vietnamonline.com/shopping/bargaining-tips.html
http://www.vietnamonline.com/planning/haggling.html
http://www.theexpeditioner.com/2012/04/16/3-tips-to-haggling-prices-in-vietnam/
http://etramping.com/fighting-for-each-dong-how-to-bargain-in-vietnam-for-dummies/
http://www.vietnamtravel.org/how-haggle-bargaining-vietnam
http://travelhappy.info/vietnam/how-to-bargain-in-vietnam/
http://journals.worldnomads.com/travel-tips/story/82580/Vietnam/Insiders-Vietnam-A-shoppers-guide-to-bargaining#axzz353HyEz7O
http://voices.yahoo.com/vietnam-negotiate-bargains-4789046.html