My take on it
"How do you handle this?"
How would I handle this? As a DM?
Game mechanics. From what I've read, you sometimes use dice (as when the sorceror botched rolls while selling items), but not always. That is probably why the accusations of you being arbitrary or unfair arise. I don't know, though. I'm not in your group. I can only go on what you say here.
I would introduce fair, equitable rules that involve charisma-based skills with DCs that are known and acknowledged. I would devote maybe 10 - 15 minutes at the end of a session to discussing them, and conclude by saying, "Does this seem fair?" I would include a copy of those in my house rules, which are available to anyone as a printout, or a downloadable file on a Yahoo group. That way, it is never a matter of DM versus players. It's all in the dice. Someone with a high charisma and skills dumped into charisma-based skills such as diplomacy will do better than a person with a low charisma and no skill points in charisma-based skills. It's that simple. And characters ALWAYS have the option of buying for price, or trading at a set rate: say 80% value if they trade other items with a combination of coin/gems/whatever. If they choose to haggle, at that point, and get screwed, then they have no one else to blame but themselves.
You don't complain that the DM is being arbitrary when you make an attack roll, and you miss. You complain when the Armor Class of creatures automatically jumps by 5 whenever Bob takes a swing, but Sally (who always wears tight sweaters) hits on a 2.
"I have a character in my party who is made purely for combat. His dump stat is Charisma with an 8. Every feat he has taken is directly used in melee. Every skill point he has spent is combat related with the possible exception of climb."
These sentences are probably why you are getting flak for your post. They have a distinct nyeh-nyeh-nyeh quality about them which is really unrelated to your question, so I'll avoid them, if that's all right.
"So now when the character attempts to purchase stuff or have magic items created I generally have the NPC's stiff him. They demand full price and expect him to deliver material components that can be used to cover half of their material cost. They also take their time making items and rarely give him prompt service unless he pays extra for it. Finally if he says anything rude or complains they will get even tougher in their negotiations."
And that is precisely why it sounds like your player is complaining. It's a problem he can't change, unless he changes characters, can't overcome, can't do anything about, and knows exactly when it is going to happen.
"The player complains that he is getting stiffed and comments of 'unbelievable' are made all the time."
I would probably say the same thing, based upon what you've presented here. He automatically experiences penalties the moment he walks in the door. The fact that you ONLY apply it when he buys big ticket items (i.e. - when it counts) contributes to the arbitrary nature of the situation, rather than making you seem generous. From what it sounds like, having an 8 charisma in your campaign REALLY means that certain people you interact with automatically have a 3 charisma, and become neutral evil, to boot.
"What should I do? He has created a character that is a walking moron outside of combat with very little skills for dealing with the outside world. If I let him straight roleplay and get better deals then he completely gets away with making Charisma his dump stat and social interaction his dump skill set."
He doesn't have to get better deals for good roleplaying. The price is in the book if he wants a magic item constructed. But he also doesn't have to be slapped on the wrist every time he buys a magic item, either.
"I also look at it this way. If a player made a very social character with no combat feats and few points into combat related skills I wouldnt fudge things in combat. I wouldnt let him roleplay describe his attacks and give him tumble for free or let him have the equivalent to cleave just because he describes a cool attack. He designed a character not focused on combat and he pays the price."
Okay, here's a question: How many skill points does a fighter get? 2 per level + intelligence? Unless you have an outrageous point-buy system, that means he's probably getting 2 - 3 skill ranks per level. Even if he's a ranger or a barbarian, or a mix, that still translates into maybe 4 or 5 skill points per level.
Now, let's look at the Charisma-based skills of these classes: Barbarian - Handle Animal (Cha), Intimidate (Cha); Fighter - Handle Animal (Cha); Ranger - Animal Empathy (Cha, exclusive skill), Handle Animal (Cha).
None, nada, zip. The system itself discourages combat-based characters from doing anything like diplomacy. Yes, he can dump all of his cross-class ranks every other level into diplomacy, and by 10th level he will have NO skills except diplomacy, where he has 5 ranks. But why should he? According to what you've said, it won't benefit him at ALL unless he's buying big ticket items. And if you decide to make it a diplomacy roll, as you did with your sorceror, then he can still roll badly and all those skill ranks will be wasted.
Damn if you do, and damned if you don't.
There is nothing wrong with making a low charisma character bad in diplomatic situations. He is going to be a bad liar (Bluff). He is not going to be the guy who can't quite fake the accent or act like a simple commoner when they are trying to sneak into the castle (Disguise). He isn't good at negotiating (Diplomacy), and no, he won't get better deals if he tries to haggle. But that doesn't mean that every time he buys an expensive item, he's going to pay 130% of what anyone else would pay, either.
"The rest of society is going to see him as a big dumb akward doofus that they expect to trip over things."
So they see him as dumb, no matter what his intelligence is, and awkward, no matter what his dexterity is, just because he's got an 8 charisma? Yeah.
"I have considered that but I have one problem. As I said before I think combat focus characters alrady have anadvantage or social focus characters. So by letting the combat character do some roleplaying for a circumstance bonus is giving an unfair advantage. Should I allow a bard to get a possible circumstance bonus to his melee attack if he describes his attack and does so in a cool manner?"
The combat focused character has an advantage if you only reward XP for combat. Someone else has already suggested roleplaying XP awards, and I agree.
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Comments from other miscellaneous people:
"Another thing that does help is to give out roleplaying XP every session, worth about 1/3 the total XP. You do a crappy job roleplaying? You get squat. After several sessions where his buddies are leaving him in the dust XP-wise, even the most hard-headed combat monster I have played with starts to shape up."
See, I prefer this approach. If you want to encourage roleplaying, then reward it. Don't punish people for not doing it. Reward the people who do it well. Give people a reason to enjoy something outside what they might do, normally, and maybe they'll step out and try something new. If not, then let them enjoy the type of character they want to play.
"I agree with you Doc - if the player insists on using Cha as a dump stat, then he gets what he deserves."
I really don't like that sort of "punish the player" mentality.
Especially regarding a fighting-class's skill points per level.
