Prices are fixed in department stores and larger shops, but at most other places bargaining is expected, especially at markets and shops where the prices are not displayed. Roadside stalls will often quote double the price, and sometimes even more, which the seller will accept. So start low, maybe at a third and aim for half.
Some small shops that have prices marked can also be cajoled into giving a “special discount”. Don't expect to able to bargain down too much though. If the prices are already displayed, this should mean that they are fair. Nevertheless, its quite rare to find a merchant who won't budge at all.
To encourage tourists to shop in Thailand a VAT refund for tourists scheme was introduced for tourists to be able to claim back the VAT paid on certain items.
“Visitors entering the Kingdom on tourist visa are entitled to refunds of the 7% value added tax (VAT) paid on goods purchased at shops, department stores and other retail outlets displaying VAT Refund for Tourists signs, where tax refund application forms are available. Prior to airport departure, visitors must present a completed VAT refund form, plus passport information and purchase receipts, to a customs officer. Certain luxury goods, such as jewelry, gold ornaments, watch, glasses, or pen, must be shown to an excise official at the VAT refund office at the departure lounge after passport control. Refunds may be in bank draft form or credited to a credit card.”Source: Revenue Department of Thailand.