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What is a rebate agreement?

A rebate agreement represents a contract between two business partners, defining the terms and conditions of a discount that is paid after the purchase of a product. For example, you can define the rebate recipient, the rebate value, and the criteria on which the rebate is based.

What is a rebate example?

For example, a rebate agreement states if a customer purchases 1,000 units of product, then they can claim a 5% rebate. Each unit is $100, so if the buyer purchases 1,000 units, the buyer can claim a rebate reward of $5,000.

Does rebate mean cash?

A rebate is a form of cash back against the purchase of the goods given to the buyer by the manufacturer or the seller of that respective goods after they sell them.

What are the types of rebates?

What are the Types of Rebates? Volume Incentive Rebate. One of the most common types of rebates is a volume incentive rebate. Value Incentive Rebate. Product Mix Incentive Rebate.

How does a rebate work?

A rebate is a form of buying discount and is an amount paid by way of reduction, return, or refund that is paid retrospectively. It is a type of sales promotion that marketers use primarily as incentives or supplements to product sales.

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What is an example of a supplier rebate?

Manufacturers often offer rebates to vendors when they meet a certain purchase volume in a period of time. Lets say that a vendor agrees to purchase 10,000 units of a product from a manufacturer within 6 months. Once they do so, the manufacturer will offer a 10% rebate. This rebate gets passed along to the buyer.

Does rebate mean refund?

A rebate is a refund offered to a customer by a manufacturer, distributor or retailer when a customer makes a purchase. Sometimes referred to as a retroactive discount, rebates are often used as an incentive or marketing tactic to attract customers.

What are the prerequisites in doing rebate agreement?

You can process rebate agreements when the following prerequisite conditions are met: The sales organization in which the sales order is processed must be relevant for rebate processing. Your system administrator sets this indicator in Customizing for Sales. The payer must be subject to volume-based rebates.

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