I've got a good one that works, but only towards the end of the holiday. See what you want, see how much they want and decide in your head on a fair price that you're prepared to pay.
Go back towards the end of the holiday and offer them slightly less than the maximum you will pay. After a few 'discussions' tell them that you only have XX (maximum) left as it is the end of the holiday and they can take it or leave it. Make sure that the amount you say you have is all you have in your pocket - or for added impact if there is more than one of you combine the contents of your wallets which miraculously comes to slightly higher than the figure you offered.
This has worked brilliantly for us in the past, and we have got some really nice things for around 1/4 of the initial asking price. I wouldn't do this on trinkets but for higher cost items it works. We've got things like a beautiful wall hanging and silk saris for a bargain using this method. The guy tried to sell us something of cheaper quality for the money we were offering and we told him it was for my Mother. We asked him if he would like us to insult her by taking cheaper goods from his shop and he folded - well, crumpled more like! His downfall was when he said he hadn't sold anything all day...
I know the arguement about it only being a couple of quid, but it's the thrill of the chase! Lets face it, if they didn't make enough they wouldn't sell it. It's such good fun!