Rebate Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Rebate, written in plain English, along with examples of how it is used.

What is Rebate?

(N) Rebate is the special reduction allowed in the selling price of any product sold or otherwise transferred whereby the buyer need to pay only the reduced amount. The effect of rebate is the reduction in purchase cost to the buyer without reduction in selling price to the seller but seller incurs additional expenses in the form of rebate

History and Meaning of Rebate

A rebate is often used as an incentive to attract customers to purchase goods or services. It is a partial refund of a purchase price, given to a buyer in some definition as defined by the seller. The rebate may be offered immediately at the time of purchase or after the buyer provides a proof of purchase.

Rebates have been in use for over a century as a marketing strategy to move inventory or stimulate new sales. They became increasingly popular in the mid-20th century when manufacturers in the United States began using them as a way to compete with each other.

Examples of Rebate

  1. A cell phone provider might offer a $50 rebate to customers who sign up for a new contract.
  2. An appliance store might offer a $100 rebate on a purchase of a refrigerator to help clear out excess inventory.
  3. A car dealership might offer a $2,000 rebate to incentivize customers to purchase a specific car model.
  4. A credit card company might offer a cashback rebate of 1% on all purchases made by a cardholder.
  5. An energy company might offer a rebate on the installation of energy-efficient home appliances to encourage energy conservation.

Legal Terms Similar to Rebate

  1. Discount: A reduction from the full price of a product or service offered at the time of purchase.
  2. Refund: A sum of money returned to a purchaser by a seller.
  3. Promotional pricing: A temporary marketing strategy that offers special pricing to attract customers to purchase goods or services.
  4. Cashback: A rebate in which a percentage of a purchase price is refunded to the buyer in cash.
  5. Incentive: A reward or encouragement to take a specific action, such as purchasing a product or service.