• A discount is a reduction in the full price due to either a sale or a promotion.
• An allowance is also a reduction, but generally because the goods are faulty or not fit for purpose.
There are many reasons why someone would get a discount on their goods or services, some companies will offer a discount to new customers, or even offer discounts to encourage early settlement of a bill or invoice. Retailers have many end of season sales during the year, this is when a new season of stock is due. For instance in the clothing business you will find that coming up to winter months the summer stock will go on sale offering discounts, some even as high as 50% off the original price. This can be extremely annoying especially where you may have paid full price one week only to find it discounted the following week!
Here are a few examples of why you would receive an allowance;
• If you ordered a pair of shoes either online or by mail order and they arrived they were totally different to the picture or the description, you would be entitled to a full refund or a reduction.
• If you ordered goods and they arrived damaged or faulty then a full refund would be offered or a reduction in price.
• If an item is wrongly priced, then they would honor the cheaper price.
The reductions will vary depending on what the reasons are and will usually be at the manager's discretion.
There is a great deal of confusion regarding wrongly priced items, some say that the retailer has no choice but to offer the lower price due to legalities.
But the retailer is not obliged to and can claim it to be an error. Thankfully most retailers would honor the lower price as a goodwill gesture.