Difference between Rebate and Discount

Key Difference: Rebates require the person to pay the full amount in the store, following which they will be require to fill and send directly to the manufacturer, who will pass on the discount to the customer later. Discounts are reduction in price that is offered on the spot to the consumer.

Rebates and Discounts are both beneficial to the customer in the end as both ensure the customer gets to pay a lower price for the product. However, this is where the similarities end. The terms differ in how the customer receives the discount, the time period and where these are used.  

Rebates require the person to pay the full amount in the store, following which they will be require to fill and send directly to the manufacturer, who will pass on the discount to the customer later. These are common when purchasing electronics such as Laptop and Cell phones, where a rebate form is provided and once the person fills that out and send it to the manufacturer; they return a percentage or the amount they promised. In some cases, the rebate may be available immediately, in which case it is referred to as an instant rebate. Some rebate programs offer several payout options to consumers, including a paper check, a prepaid card that can be spent immediately without a trip to the bank, or even PayPal payout.

Rebates are often given in taxes, where once the person has paid more than required or where he can avail for redemptions, the government deducts that amount from the taxes; they usually return the money via a check, known as Tax Rebates.

Discounts are reduction in price that is offered on the spot to the consumer. He doesn’t have to pay the full amount, but rather the reduced price. This can be in form of direct reduction or a percentage off. For example, prices can directly be slashed by a monetary amount (i.e.: USD 200 reduced in USD 400 iPhone) or they will reduced by a percentage (5% off USD 500).

Discounts are a best way to increase sales, but consumer should be careful of companies hiking prices in order to offer a discount. Additionally, discounts can also be offered from manufacturers to business customers, where manufacturers offer a percentage discount prices, if the customers pay their bill in a stipulated time.

Comparison between Rebate and Discount:

 

Rebate

Discount

Definition

Rebates require the person to pay the full amount in the store, following which they will be require to fill and send directly to the manufacturer, who will pass on the discount to the customer later

Discounts are reduction in price that is offered on the spot to the consumer

When the reduction is offered

Later on unless an instant rebate

On the spot

Paperwork

Yes

No

Uses

Taxes, Consumer Electronics

Any product or service

Return in form of

Cash, giftcards, other products, etc.

N/A

Image Courtesy: blog.wetandforget.com, clker.com

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