A failure fee is a penalty payment
A)assessed by a retailer to a manufacturer to handle new products that were returned by customers as being defective.
B)a wholesaler makes to a retailer as compensation for sales not made while the product was on the shelf.
C)made by a manufacturer to a retailer for "product demonstration" coupons that were not redeemed by customers during a test market of a new product.
D)a manufacturer makes to a wholesaler as compensation for case-lot sales not made to retailers.
E)a manufacturer makes to a retailer as compensation for sales not made while the product was on the shelf.

Question

Quizplus · Accepted Answer

A failure fee is typically paid by a manufacturer to a retailer as compensation for sales not made while the product was on the shelf. It is essentially a penalty for failing to meet sales targets or for creating excess inventory.

A Failure Fee Is a Penalty Payment