Questions and Answers
What is a Quantity Discount?
What defines a Seasonal Discount?
What is a Cash Discount?
What is a Trade Discount?
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What is a Trade-in Allowance?
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What is an Advertising Allowance?
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What is a Coupon?
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What is a Rebate?
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Study Notes
Discounts and Allowances
- Quantity Discount: Incentive for customers to purchase large volumes of a product, typically reducing the unit price based on the amount bought.
- Seasonal Discount: Encourages sales during off-peak times of the year; businesses offer discounts to boost sales when demand is typically low.
- Cash Discount: Reward for customers who pay immediately or opt for cash payment instead of credit, promoting faster payments and reducing credit risk for sellers.
- Trade Discount: A certain percentage off the invoice price, given to businesses at different distribution levels, aiding in price competitiveness among distributors.
- Trade-In Allowance: Price reduction offered when exchanging an old product for a new one, incentivizing consumers to upgrade and facilitating sales for new merchandise.
- Advertising Allowance: Financial support provided to retailers or distributors who actively market a product, which can either be a direct price cut or a specific monetary contribution towards advertising efforts.
- Coupon: Promotional tool providing a direct price reduction, distributed in printed form, aimed at encouraging purchases and increasing customer engagement.
- Rebate: Post-purchase refund offered to customers, usually a portion of the purchase price, which serves to incentivize sales and attract new customers to the brand.
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Description
Test your knowledge of various types of discounts and allowances with these flashcards. Each card provides a definition that will help you understand how businesses offer price reductions based on different criteria. Perfect for students in finance or marketing courses!