Discount Pricing

Objectives Understand the concept of a discount. Determine the meaning of employee discount. Distinguish the difference between cash discount, trade discount, quantity discount, and seasonal discount.

Discount A reduction from the list price or a reimbursement for performance of a specific task.

Employee Discount Discount to encourage workers to buy the products their employer sells or manufactures.

Cash Discount A price discount offered for early payment of bills.

Trade Discount Discount given to wholesalers, retail dealers, or others in a particular trade as repayment for the performance of certain functions.

Quantity Discount A price offered to buyers for placing large orders.

Seasonal Discount A price discount intended to encourage purchase of products during a time of year when sales are traditionally low.

Summary A discount is reducing the list price of an item or service. Employee discounts encourage employees to buy from their employer. Cash discounts encourage early payment of bills.

Summary Trade discounts are given to members of a particular trade. Quantity discount encourage the placing of large orders. Seasonal discounts help boost low sales by discounting off-season merchandise.