1. A reduction from the full amount or value of something, esp. a price.
2. An advance deduction of interest when a person lends money on a note, bill of exchange, or other commercial paper, resulting in its present value. See PRESENT VALUE.
3. The amount by which a security’s market value is below its face value.
— Also termed bond discount. Cf. PREMIUM(3). — discount, vb.
bulk discount. See volume discount.
cash discount.
1. A seller’s price reduction in exchange for an immediate cash payment.
2. A reduction from the stated price if the bill is paid on or before a specified date.
functional discount.
1. A supplier’s price discount given to a purchaser based on the purchaser’s role (such as warehousing or advertising) in the supplier’s distributive system. • This type of discount typically reflects the value of services performed by the purchaser for the supplier. If a functional discount constitutes a reasonable reimbursement for the purchaser’s actual marketing functions, it does not constitute unlawful price discrimination and does not violate antitrust laws.
2. A supplier’s price discount based on the purchaser’s relative distance from the supplier in the chain of distribution. • For example, a wholesaler or distributor usu. receives a greater discount than a retailer.
quantity discount. See volume discount.
trade discount.
1. A discount from list price offered to all customers of a given type — for example, a discount offered by a lumber dealer to building contractors.
2. The difference between a seller’s list price and the price at which the dealer actually sells goods to the trade.
volume discount. A price decrease based on a large-quantity purchase.
— Also termed bulk discount; quantity discount.
