Discounts

Discounts are reductions in the price of goods or services offered to customers. They are used by retailers, manufacturers, and service providers to stimulate demand, clear excess inventory, reward customer loyalty, or compete with rivals. Discounts can be applied at the point of sale or through post-purchase mechanisms such as rebates or refunds.

Common types include quantity discounts (price breaks for larger purchases), seasonal or promotional discounts (temporary cuts tied to holidays or events), cash discounts for early payment, and loyalty discounts for repeat customers. Consumer-facing forms include coupons, promo codes, buy-one-get-one-free offers, and bundled or multi-item discounts. In business-to-business contexts, trade discounts are reductions given to intermediaries, wholesalers, or distributors. Specialized discounts include student, senior, military, or professional discounts. Discounts are usually specified as a percentage off the price or as a fixed amount and may be unconditional or subject to terms and exclusions (minimum purchase, product category limitations, expiration dates). Some discounts are automated, while others require consumer action, like coupon redemption. Rebates differ from upfront discounts in that the saving is received after purchase, often requiring forms or proofs of purchase.

Economic considerations include impact on revenue, profit margins, and price perception. Discounts can attract new customers and increase sales volume but may also cannibalize full-price demand or train customers to expect lower prices. Businesses must balance strategic goals with pricing integrity and comply with applicable laws and fair-trading practices.