Rebate

In foreign trade, a rebate typically refers to a portion of the payment returned by the seller to the buyer after shipment, as pre-agreed, to stimulate purchases or compensate the buyer for price competition in the market. Unlike a discount, which is deducted directly on the invoice, a rebate is returned after the fact, possibly in cash, as a credit toward the next payment, or in kind. Use cases include: quantity rebates to encourage the buyer to reach a certain purchase volume, or promotional rebates to help the buyer sell at low prices in the target market. Precautions: Rebate terms should be clearly written into the contract, specifying the calculation base (e.g., FOB price or invoice amount), conditions for return (e.g., after the buyer pays in full), timing and method of return, and compliance considerations to avoid constituting commercial bribery. Difference from commission: A commission is remuneration for an intermediary or agent's services, while a rebate is a price concession given directly to the buyer. It is often confused with 'rebate' in Chinese, but the latter emphasizes long-term cooperation incentives.