A vendor rebate is a type of vendor allowance or incentive in which a part of the purchase price is returned by the seller to the buyer when a specified quantity or value of goods has been purchased within a specified period. Unlike discounts which are deducted in advance of payments, rebates are given after payment.
Vendor rebates can be of several types:
Standard rebate: Different purchase thresholds have a different rebate factor, either as a percentage or absolute amount. Thus, an increase in purchased amounts leads to a higher rebate factor. These may be prospective or retrospective.
Growth bonus rebate: A target percentage increase or growth in either quantity or purchase amount for a specific item that triggers the rebate.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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