A consumer rebate offer may be preferred by a retailer to a reduction in a good's list price since the rebate does not reduce the retailer's inventory value.

Question

Quizplus · Accepted Answer

A consumer rebate offer allows the retailer to sell the product at its full price, thus not reducing the inventory value on their books, while still offering an incentive to the consumer. The rebate is typically handled post-purchase, often by the manufacturer or a third party, which means the retailer's immediate revenue and inventory valuation are not directly impacted by the discount provided to the consumer.

A Consumer Rebate Offer May Be Preferred by a Retailer