United's pursuit of the England star appeared all but over after the Bundesliga giants insisted Sancho will play for them next season.
Dortmund had set a deadline of Monday for United to reach an agreement with them, but the club's chief Michael Zorc insisted United have no chance of signing Sancho now after he jetted off with his team-mates to Switzerland for a pre-season training camp.
But Hargreaves told BT Sport: "Bluff. I'm calling bluff, I think he'll be a Man Utd player in a pretty short time.
"They are just trying to get some more money out of it. It's the nature of the beast.
"Obviously they know United are really interested and they are pretty heavy into negotiations. I think they are bluffing and they know he is going to leave at that price."