DISCOUNT

discount,n.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. [Blacks Law 8th]