Overcharging is a phenomenon that all those who have been on the road for a while will inevitably encounter, sometimes without even noticing. What makes overcharging common is its presence in the grey zone between an illegal scam and the right of a vendor to set their price as they wish. This usually allows culprits to get away with nothing but bad karma. In a nutshell, overcharging is when you pay a hefty premium over and beyond the normal price a local would pay, purely because you stand out as a tourist. First, I’ll talk about why this is such a common phenomenon, then I’ll give you some practical steps that you, as a nomad, can take to avoid being overcharged.

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Why are tourists overcharged?

It’s socially acceptable to overcharge. Some locals, mostly in developing countries where overcharging is more common, consider all tourists rich and will overcharge them to “correct” an inequality. Nothing boosts a crime more than a sense of justification combined with personal gain. The lack of solidarity and perception of separation between locals robbed by fictional world powers, and tourists from the same countries makes the phenomenon quite common.

Vulnerability. As a tourist, you’re vulnerable since you don’t have all the necessary information at hand. Being a tourist puts you in increased risk at many shops, just like going to a garage and being billed on something you can not really compare or validate.

Misunderstandings and Language gaps. Language gaps create misunderstandings which sometimes end up with you paying more on a product you didn’t really want or need. In this scenario, the responsibility falls on you to research and interact wisely to avoid this situation.

How can you avoid being overcharged as a tourist?

• Ask for the price in advance. This will eradicate almost all of the risk. By not asking for the price of something in advance before you consume (usually in services such as taxi rides and tour guides), you’re putting yourself in a position of great weakness. Buyer beware, and all that.
• Go for visible fixed prices. If everything’s up front, for example, the price is tagged on the product or the place has a price list, you’re (almost) guaranteed to be getting local prices.
• Bargaining. When done right, haggling will help you deal with being overcharged. It is important to know where to bargain. In a Middle Eastern bazaar? Definitely. In a German shopping mall? No. Unless you are on low budget, I suggest you don’t bargain for the small stuff, and focus on the big things that make a difference, like monthly accommodation or an expensive product.
• Intuition. Even as a tourist, your intuition counts, maybe even more than usual. If the deal doesn’t feel right, and the vendor gives you bad vibes, just don’t go for it.
• Look local. Don’t stand out as a tourist with the funny flip flops. Sometimes it is even better to try avoiding conversation to make the vendor perceive you as a local when they quote you a price. If you need to interact, try to speak a bit of the local language, as a signal that you have been around for a while and know your stuff.When possible and on pricey items, it’s wise to use your friends and contacts to help you out in the interaction with the vendor.
• Avoid touristy spots. Not only they are more expensive to begin with, touristic locations have much higher frequency of touts who regard tourists as walking wallets. If you shop out of tourist hangouts, your chances of getting overcharged are diminished considerably.
• Shop around: If your purchase of a relatively expensive item isn’t urgent, try comparing prices between two vendors. It is very unlikely you will get overcharged by two different vendors.
• Spend time on market research. As we’ve said, information is power. Using Google, forums, and advice from local friends will help you avoid getting ripped off.
• Decide your price in advance. If you’re planning a purchase, figure out your maximum in advance and avoid being manipulated when the pressure’s on.
• Document the deal. Keeping price offers accessible with you (e.g. your booking of a hotel via the internet) will help you avoid any unexpected ‘inflation’ scams once it is time to pay.
• Avoid mediators. Try to avoid using mediators, and close the deal directly with the vendor. This will also give you better results while bargaining, since there is no commission to a third party that lowers the vendor’s margins.
• Consume where your review matters. With Internet, many services such as accommodation and tour guide booking give you an option  to rate the vendor. Choosing services that you can rate afterwords (Airbnb and Hostelworld come to mind) brings power to you, and greatly reduces chances of overcharging due to the consequences a bad review has on the vendor’s reputation and future sales.

Specific scenarios where you’re more at risk:

Taxis. Notorious for overcharging. If you have no idea about the expected price, ask the driver to activate the meter, try researching in advance the expected cost, and use Google Maps to make sure you’re not being taken for a ride (figuratively speaking).

Menus. Although rare, you might be handed the ‘tourist’ menu, and you could end up paying several times the normal price.

Currency exchanges. Only change your money at places with very small differences between the buy and sell rate. Aim for a maximum of around 3% from the current exchange rate which you have to find out in advance.

While you should always be a savvy customer, you will sometimes lose and get overcharged. In order to maintain your sanity, you just have to let some things go. Small sums aren’t worth getting worked up over; Take the necessary steps to avoid overcharging, but don’t fall to a constant paranoia that the world is out to get you.