German shoppers had an extra reason to look forward to the start of the summer sales last Monday. Not only could they pick up a pair of the salmon-coloured jeans they so love at a sizeable discount. Now true bargain hunters were able to haggle over the price, something that has been illegal in Germany for almost 70 years.

Last week the government abolished the Discount Act, which prevented retailers offering discounts on goods of more than 3 per cent outside of the sales season and prohibited haggling of any description. The "Reich Discount Act" was enacted by the Nazis in May 1933 to regulate what the Reich's economics minister Mr Kurt Schmitt called the "unpleasant state of competition" in German stores.

The law was an undisguised attack on the "Jewish shopkeeper soul" of wealthy department stores that used their buying power to woo customers with discounts and encouraged limited haggling as a way of encouraging repeat custom.

The law remained untouched in the intervening years, with a review in 1957 deciding to leave the law untouched after reaching the odd conclusion that the law "contained no National Socialist ideology".

Last week German newspapers began crowing about the abolition of the discount law as if it was a licence to print money. "Haggle yourself rich," hollered mass-circulation Bild on its front page. "Whoever pays the full price is just stupid," it continued inside.

Large retail chains have been anticipating the end of the discount law for months and have already trained sales staff to refuse to haggle over the price. "Our floor staff have no authority to grant discounts. Instead we are encouraging them to make customers offers such as free delivery on heavy goods," said a spokesman for Kaufhaus des Westens, Berlin's answer to Harrods. "Or if a customer buys an expensive suit, we will throw in a free silk tie," he added.

German supermarket chains like Aldi and Lidl, famous for their razor-thin margins, have also instructed their staff not to haggle or grant any discounts.

Many small retailers have been offering unofficial discounts to their customers for years and say the law change won't make that much difference. "The only difference now is that we can advertise it on the shop door," said one Berlin clothing retailer.

Newspapers are full of haggling tips for their readers, 68 years out of practice. "Successful haggling is a matter of getting the tone right," said one newspaper. "Be friendly, make eye contact, and set a realistic price limit. And always go shopping at a quiet time. No one is going to agree to a discount on a Saturday, when the shops are full."

At least until the novelty wears off, retailers say more and more customers are asking for minuscule discounts. "If the customer simply throws the goods onto the counter and refuses to pay more than DM100, I just show them the door," said one frustrated Berlin shop owner last week.

When in doubt, the hard-nosed customers follow the advice from Bild and "demand to speak to the manager". Experts predict the biggest savings will be made by customers buying clothes and electronic equipment. In a special supplement, Bild printed testimonials from readers who had saved everything from DM2 (80p) on a pair of socks to DM800 (£320) on stereo equipment.

"I am a student and I don't have much money, but somehow I always end up going shopping. Now at least I get a good feeling when I can knock a few per cent off the price," said Ms Elena Bauer from Berlin.

"From a modern perspective the law made no sense and it was high time it was abolished," said Mr Werner Muller, Germany's economic minister. "With the growing popularity of Internet retailing, it was becoming increasingly difficult for German retailers to compete with EU competitors," he said.

With the abolition of the discount law, retail chains are planning an assault on customers with loyalty cards and bonus schemes. Until now the practice was limited by the discount law, but now there is no legislation to stop them, or to protect smaller retailers.

"Customers have to be careful to keep their overall perspective and not to be swayed by free gifts that have nothing to do with what they wanted to buy," warned Mr Hermann Franzen, president of Germany's small retailers association.

In the open-air market in Berlin's Kreuzberg, haggling is a given. The price of everything from teaspoons to watermelons is negotiable, but mostly just among the fruit sellers and their Turkish customers.

Few sellers here believe the claim of a newspaper last week, that the abolition of the Discount Act will turn German shops into a Turkish bazaar.

Sixty-eight years of the Act has bred a culture in Germany where it is considered impolite, or worse, uncivilised, to question the price.

"The Germans always pay the stated price. They would rather change a DM100 note than let me give them two pfennigs off," says one fruit seller. "But in Turkey, if you don't haggle, you only have yourself to blame."