Difference Between Discount and Rebate


Discount is the deduction which seller provide to the buyer in different condition. Seller may provide discount during purchase or settlement which depends on the type of discount. With the discount, customers will pay less amount compared to the full price. The aim of discounts is to encourage bulk purchases, early payment, and attract new customers. The seller

Type of Discount

  • Early payment discount: it is the normal discount which the seller encourages the buyer to settle payment before the due date. It happens when company provides credit sales to the customer. However, sellers need cash flow to operate the business so they provide discounts when customers pay before a specific date.
  • Quantity Discount: It is the discount seller provides to the customer when they purchase a huge amount of goods. Sellers want to boost the sale quantity, so they provide quantity discounts.
  • Promotional discount: It is the discount that sellers offer a special price to customers during the initial product launch. They want to attract customers to try their products. In order to provide incentives to customers to use their product, they decide to launch the promotional discount.
  • Seasonal discount: It is the discount that the seller provides during a certain of the year when the supply of goods exceeds the demand. It is mostly used for the agriculture industry that produces seasonal output.


Rebate is the option in which seller provides cash back to the customer upon a certain condition is met. The rebate requires the consumer to pay the full amount and receive the cashback later while the discount allows the customer to pay less than the full amount. Rebate will save the buyer on the total cost but they have to wait for some time.

The rebate also provides to the consumer due to other reasons such as poor quality product, inaccurate quantity, product feature, and the delay of deadline. In these cases, the rebate is provided to the buyer as compensation due to the negative impact above.

Type of Rebate

  • Mail-In Rebate: This is the rebate provided by the supplier which buyer will receive a check after purchase a specific product and send the working paper proof. The seller requires buyer to send some documents such as barcode, invoice, or other documents as proof of purchase. Then the seller will send back the check to buyer.
  • Vehicle Rebate: is the rebate provide to consumer to encourage them to purchase new vehicles. Manufacturing provides a rebate to consumers through the dealer.
Discount Rebate
Discount is the amount seller provides to customer by deducting from the full price. Rebate is the amount seller gives back to customer upon a certain condition is completed.
Buyers do not need to pay the full amount, the discount is deducted before payment. Buyers need to pay the full amount, and the rebate will be payback later.
The discount amount is shown on the original invoice and reflects the receivable amount. The rebate amount will not show on the invoice.
Buyers are highly likely to take advantage of the discount amount provide by seller. Only a portion of buyers will meet the required criteria and be able to enjoy the rebate.