What is the difference between rebates and discounts

The system also encourages customers to pay in full for services with the hope of receiving some rebate or return for their money.

Difference Between Rebate and Discount. Difference Between Similar Terms and Objects. MLA 8 Wither, Christina. Name required. Email required. Please note: comment moderation is enabled and may delay your comment. There is no need to resubmit your comment. Notify me of followup comments via e-mail. Written by : Christina Wither. What is the difference between Discount and Rebate. User assumes all risk of use, damage, or injury. You agree that we have no liability for any damages.

A discount is an immediate cash back return based on the item to be sold at that time. What is a discount? A discount has the following functions: A strategy used by retailers to increase sales A reward system based on a purchase price to encourage buyers A method of reducing stock items to move older items from the shelves A marketing strategy for certain lines of product.

Moving new lines into focus or getting rid of old lines that may have reached their sell by date. A benefit to the consumer either in reduced prices of goods or services rendered.

What is a rebate? A rebate has the following characteristics: A means to encourage positive customer relations Can be used on an individual basis, each rebate would be calculated according to the commitment between the seller and the buyer for services rendered The full purchase price is always received, and the rebate returned later A useful tool for larger sales items and refunds on services like taxes and utilities.

So, to know the Difference Between Discount and Rebate, First of all, we have to clear the meaning of both terms.

These are explained below:. The Discount is the amount that is granted by the seller of the goods and services to its buyer. It is granted for mainly two purposes i. On the basis of these purposes, this term has divided into two forms, shown as below:. It is not shown in the account, Because It is granted before actual sales arise. Cash Discount means that amount of cut from the total amount of the payment receivable from the creditor or cut from the total amount payable to debtors.

It is granted by the receiver to get an earlier payment of the outstanding amount. It has shown in the books of account Because Cash Discount is granted after the actual sale is done. The Rebate is that amount that is granted by the seller of the goods and services to its buyer at the time of defect detected in the goods.

Giving discounts will make the customers revisit the seller in future that in turn will benefit the seller. It can be strategically utilized by the seller to earn more profit as the actual amount of the product or service can be increased, and then a discount can be provided on that amount.

There are two types of discount - cash discount and trade discount. A Rebate is a special kind of discount that is paid to the buyer by the seller or manufacturer. In this case, a partial refund of the original amount is paid back to the customer.

Customers whose purchases reach a certain quantity or amount are eligible for a rebate. Therefore, it has been understood that both rebate and discount are tools used by sellers or manufacturers for targeting their customers. As discount aims to gather more and more customers, the rebate is used to target specific customers and increase the sales of the company.

Register Login. PPO Diploma vs. Articles Difference between Rebate and Discount. Difference between Rebate and Discount: Comparison Chart Basis of comparison Discount Rebate Definition It is a reduction in the original amount of a product or service given to the buyer by the seller. It is the purchase price amount refunded to the buyer by the seller, based on certain conditions.

The key difference between a rebate and a coupon is that a coupon provides an immediate discount. Most people will know coupons from newspaper advertising where the consumer will cut out a special offer.

But these days promotional codes are available via the Internet, and direct marketers may provide a coupon via a direct mail program.