Rebates

Growth rebate

A rebate paid on the increase in volume over a prior-period baseline, rather than on total volume.

Growth rebates reward change rather than scale, which makes them attractive to suppliers — they only pay for incremental business. They also make the baseline the most contested number in the agreement: what exactly last year’s volume was, on which products, net of what.

Because the baseline has to be reconstructed and agreed, growth programmes are the ones most likely to be evaluated late. A weekly projected landing position against the baseline is worth more here than in any other structure.

Related terms

Tiered rebate

A rebate whose rate increases as cumulative volume crosses defined thresholds.

Volume rebate

A rebate earned on absolute purchase or sales volume over a defined period.

Accrual

The liability or receivable recognised as a rebate is being earned, before it is actually settled.

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