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Contracts & Pricing

Rebate

Also known as: Volume rebate, Retrospective discount

A rebate is a partial refund a supplier pays a buyer after purchases, usually for reaching agreed volume or spend targets over a period.

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Unlike an upfront discount, a rebate is paid retrospectively — the buyer pays the standard price and then receives money back once a threshold is met. Rebates reward loyalty and volume, and can be tiered so higher spend earns a bigger percentage back.

Rebates are easy to leave unclaimed if no one tracks the thresholds and reconciles them, so they are a common source of leaked value. Good contract management monitors rebate accruals and ensures they are actually collected.

Frequently asked questions

What is a rebate in procurement?
A rebate is money a supplier pays back to the buyer after purchases, typically for meeting agreed volume or spend targets over a period — a retrospective form of discount.
What is the difference between a rebate and a discount?
A discount reduces the price upfront. A rebate is paid back after the fact, usually once the buyer reaches a spend or volume threshold.

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