Trade promotion deduction
An amount a retailer withholds from payment to settle promotional allowances, such as discounts, displays or advertising, agreed with a consumer goods supplier.
In consumer goods, promotions are often settled through deductions rather than separate invoices. The retailer takes the agreed amount off a payment and the supplier matches it to a promotion agreement.
Validating them means checking the deduction against the agreement and the sales volume it was based on. Amounts that don't match, or relate to expired promotions, become claims to contest.
Related terms
- Deductions managementValidating, resolving and recovering the amounts customers withhold from payments, from promotional allowances to shortage and damage claims.
- Compliance deductionA penalty a retailer deducts for breaking its supplier requirements, such as late delivery, incorrect labeling or a missing advance ship notice.
- Invalid deductionA deduction the customer isn't entitled to under the agreement, such as a duplicate claim, an expired discount or a penalty for something that didn't happen.