Rick's Bike Shop allows customers to use a credit card for purchases. The shop pays 3 percent of the sale to the credit card company. To promote more business, Rick decides to offer a lower price to customers paying cash-that price being 3 percent less than the standard list price. Rick is giving his customers a(n):
A)trade-in allowance.
B)functional discount.
C)promotional allowance.
D)discount-for-cash.

Question

Quizplus · Accepted Answer

Rick is offering a discount for customers paying cash, which is commonly referred to as a cash discount or a discount-for-cash. It is a way to incentivize customers to pay with cash instead of using a credit card, which can be more costly for the business. This is not a trade-in allowance, functional discount, or a promotional allowance.

Rick's Bike Shop Allows Customers to Use a Credit Card