In Thailand, many products have a dual pricing system: a lower price for locals and an upper price for tourists.
However, it’s illegal to charge a higher price to one group than another.
Dual pricing can be confusing and sometimes you might find yourself being ripped off if you are not careful.
The history of dual pricing in Thailand
Dual pricing started in the 60s when many high-end items were priced higher for foreign tourists.
This was mainly due to the so-called “thirsty foreigner” phenomenon where a certain number of tourists would spend more money on goods and services than the locals, who were not obligated to pay such high prices.
This practice was banned in the 70s and has been illegal ever since.
Tourist traps and dual pricing in Thailand: what to watch out for
In recent years, some shops and businesses still try to get away with charging higher prices to tourists.
The most common examples are found in the jewelry business, gift shops, hotels, and restaurants. The problem starts when a place clearly states that it’s open to tourists only.
However, some business owners will try to fool you by opening a sign or having a separate menu for tourists and locals. And they will try to explain things away by claiming that they are able to charge tourists higher prices because of demand, that the locals don’t really want the higher prices, obviously.
It is not uncommon to see prices marked up on menus at restaurants. The markup could be as much as 50-200% on certain items. If you’re in a small local place, check to see if they give discounts to Thai people.
If they don’t and the place has some kind of “Thai food only” sign, you shouldn’t be paying more than the locals would.
The way to avoid being tricked is simple: if you go into a shop that clearly states it’s open only for tourists and foreign residents, DO NOT pay more than locals unless the goods are clearly marked as tourist goods. If you’re not sure, just ask before you make a purchase.
Farang price vs. Thai price
The term “farang” is the Thai word for a foreigner.
What is a farang price? This price is the high price tourists get while shopping, except in special cases such as tax-free shops. The difference in price is because of Thai customs and local laws.
Many tourists notice that prices set for them are far from the actual Thai price:
- entrance fee to national parks, historical sites, and museums
- taxi meter starts from 25 baht instead of 20 baht
- local transportation like minivans, songthaews and tuk-tuks charge more
- shops that sell handicrafts and souvenirs
While some of these things may be understandable, is it legal for businesses to charge more for foreigners?
But, this is normal in Thailand. Try to avoid asking for the price the same for Thais, because you are not a Thai and you don’t have the same rights.
It’s better to take it as an opportunity to bargain and get a better price or to just pay the flat rate.
Although most tourists are used to paying more than locals, there are several cases in which businesses charge a higher price to foreigners.
The prices in Thailand are not the same everywhere.
When you’re in a shopping mall or a big shopping center, the prices will be higher than what they charge foreigners. However, if you look in the back corner of many shops where there are no tourists or farangs, you will see the same products being sold for much cheaper prices.
This system only applies in Thailand’s urban areas and only to tourists who come from abroad.
Now, what is a Thai price? Prices set for Thais are the not same that foreigners get and they also include certain benefits such as cheaper transportation or entrance fees.
“Thai price” means the normal prices at which Thais shop or pay – it is a term used in reference to special pricing for Thais. The purpose of this pricing is to give the customer an incentive to buy Thai products instead of importing foreign goods.
In fact, you are paying more money than locals would pay for the same exact product or service.
A sad truth is, even if a farang has been living in Thailand for many years now, helped the Thai economy by consuming Thai products and services, or even married to a Thai, he or she will always be a farang and will always be treated as one.
Bargaining tricks in Thailand
Thais are good at bargaining and they know how to use it to their advantage.
This is why it’s important for you to learn how to bargain in Thailand properly, or you could leave the country empty-handed.
Here are some tricks:
1) Bring a bigger group
As mentioned, Thais will offer you even higher prices if they see that you’re a tourist or a farang. They often assume that they can easily rip you off.
A way to avoid this is to bring along at least three people who share the same nationality as your own. This will force them to ask for discounts from the owner on behalf of the others in the group.
If your group will buy in bulk, ask for a special price. In Thailand, small businesses will offer a discount to groups of customers if they buy goods in large quantities.
2) Getting accurate information is essential
Go in armed with as much information as possible. You should know what you’re buying and also know if you can get it cheaper somewhere else.
If the seller knows that you have done your research, they will not try to get away with higher prices.
3) Befriend a local
You want to ask someone who can help you bargain in the local language. You can ask a local or a friend who has been in the country for some time to help you out.
The best way is to find a local or a friend who speaks Thai and other languages such as English.
This will save you time while communicating with the local shop owners. They are able to explain things better and they can make sure that you get the right prices before you buy anything.
4) Learn some local language
This will give you more bargaining power and more chances to avoid getting ripped off by shop owners.
Telling them that “I don’t speak Thai” is a great way for them to rip you off.
The good news is some local shop owners or sellers appreciate your effort in speaking Thai with them – they’ll even correct your pronunciation and intonation and ask you questions in Thai for fun.
5) Don’t be a cheapskate
Always be respectful towards your Thai friends and business owners.
If you want to bargain, do it politely as you have put yourself in a position where they can rip you off. Always try to respect the locals and their customs as much as possible.
An exception is if they have acted in an unprofessional manner, meaning they try to take advantage of your inexperience or ignorance of the language and local culture.
6) Pick up before or after peak hours
The best time to bargain is in the mornings or afternoons. These are times when most tourists are not there since they are taking their day off and visiting places out of town.
If this is the case, it is assumed that the shop owners don’t have much profit yet, so if ever you will buy something from them during this time, they will be willing to give you a discounted price.
7) Be firm and polite
Bargaining in Thailand is a necessary part of the shopping experience, but it’s also a game of high-stakes poker. You have to be strong and determined, but you also have to be willing to compromise.
Remember that if you are too aggressive, the locals will respond by pushing you in the back and trying to rip you off.
You should be firm and polite at the same time when bargaining over prices.
8) Know your prices and don’t be afraid to walk away from the deal
Try to find out how much the locals actually pay for the goods you want, especially if you’re about to make a big purchase. Don’t be afraid to walk away from the deal if you’re not getting the price you want.
The businesses that do not want to sell you the goods will try their best to give you an unreasonably high price, but you can still get to the point that they are not willing to sell you the goods even if you bargain with them.
Dual pricing is a reality in Thailand. If you’re planning a holiday in this sunny country, you should probably be aware of this concept.
There’s no denying that it’s unfair but it’s also the reality of life in Thailand where most people will use any opportunity they have to take advantage of tourists and travelers.
But in a country with so much to offer, it’s not wrong to spend a little money to get good value for your money.
Remember that you’re also helping local businesses and shop owners to earn more money.