If a seller makes payments to a customer to purchase goods or services, and those payments are equal to the stand-alone selling prices of those goods or services, part of those payments are a refund to the customer.

Question

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If the seller makes payments to a customer to purchase goods or services and those payments are equal to the stand-alone selling prices of those goods or services, it is not a refund but rather a revenue-sharing arrangement or a form of bartering. Refunds are given to customers when they return goods or cancel services and they receive their money back.

If a Seller Makes Payments to a Customer to Purchase