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1.
A lesbian matchmaker.
Julia would never have met Kate had it not been for that rug merchant on Bourbon Street.
by FengTao April 08, 2011
 
2.
An individual, usually foreign, especially Middle Eastern, who displays goods at an inflated price in his shop, but keeps bargaining with you and offering lower prices when you say it's too expensive or you're leaving.

Term is probably rooted in the stereotype of haggling over rugs at a bazaar.
An example are the stores in tourist areas of New York City that sell trinkets and electronics. You ask them how much it is, and if you say "sorry, too high" they keep trying to lure you in with a lower price.

(In a Times Square shop)
"How much is that camera?"
"$99."
"Nah, you know that's too much..."
"For you, my friend, $90"
"No, I'm leaving."
"$80?"
"Damn rug merchant..."
by gatecrasher1 November 28, 2011