Discounts and allowances are reductions to a basic price of goods or services.
Trade-in credit, also called trade-up credit, is a discount or credit granted for the return of something.
These are price reductions based on the quantity of a single order.
The expectation is that they will encourage larger orders, thus reducing billing, order filling, shipping, and sales personnel expenses.
There are many purposes for discounting, including to increase short-term sales, to move out-of-date stock, to reward valuable customers, to encourage distribution channel members to perform a function, or to otherwise reward behaviors that benefit the discount issuer.
Some discounts and allowances are forms of sales promotion.
Generally there are two types: Cumulative quantity discounts, also called accumulation discounts, are price reductions based on the quantity purchased over a set period of time.