There is no negative consequence for failing to negotiate, so if you do not want to discard any of your items, you might as well try to negotiate as you could get something better, or some health that can be used straight away!
If you are MARKED FOR DEATH (Adventure pack 1: Cult of the Death Knight), and your health is less than half, you are still allowed to pick the Negotiate option, which would be impossible with the cult die


Items found in the knapsack (Adventure Pack 3: Blight of the Plague Lord) can be traded from the knapsack.