Wholesaler Chargebacks

Posted in Marketing and Strategy Terms, Total Reads: 487

Definition: Wholesaler Chargebacks

Wholesaler chargebacks are those discounts which are given to those contractually bound customers directly purchase from an intermediary wholesale purchaser. These contracted customers, which generally consist of Central government organisations purchasing off the Central Supply Schedule, generally buy the product at its contracted price, plus a mark-up from the wholesaler.

In turn, the wholesaler also charges back to the customers the difference between the initial price paid by the wholesaler and the contracted price which is paid to the wholesaler by the customer. The allowance given due to wholesaler chargebacks is a function of the expected utilization of these programs and reported levels of wholesaler inventory. Wholesaler chargebacks and actual rebates offered could exceed historical experience and the customers’ estimates of future involvement and participation in these programs. Till date, actual rebate claims and wholesaler chargebacks have not differed materially from the customers’ estimates.

Wholesaler chargebacks are mainly found to be offered in the USA.



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