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]