A retailer reduces its invoice by 5 percent since a supplier shipped seasonal merchandise 10 days late.The price reduction is designed to compensate the retailer for additional markdowns.This reduction illustrates a ________.

Question

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This reduction is known as a chargeback, which is a financial penalty imposed by a retailer on a supplier for not meeting agreed-upon terms, such as late shipment in this case. It compensates the retailer for potential losses or additional costs incurred, like markdowns due to delayed merchandise arrival.

A Retailer Reduces Its Invoice by 5 Percent Since a Supplier