cash discount Definition | Business Dictionaries from AllBusiness.com
Facebook Twitter Google+ You Tube RSS Feed

Business Glossary

SEARCH THE BUSINESS GLOSSARY

Business Definition for: cash discount
cash discount
See also sales discount
cash discount

trade credit feature providing for a deduction if payment is made early. For example: trade terms of "2% 10 days net 30 days" allow a 2% cash discount for payment in 10 days. Term also refers to the lower price some merchants charge customers who pay in cash rather than with credit cards, in which case the merchant is passing on all or part of the merchant fee it would otherwise pay to the credit card company.

cash discount
See also discount
cash discount

reduction in a selling price for prompt payment.

See also trade credit , terms
cash discount

percentage reduction in the gross price given by a seller to a buyer who pays within a set period of time. Cash discounts are given to shorten the length of time the seller must wait to collect the amount due. Cash discounts are offered to buyers in most industries, including media buyers .

A common business phrase for a cash discount is "2/10, net/30," meaning that a 2% discount is offered if the amount due is paid within 10 days; otherwise 100% of the amount due is payable in 30 days. For example, if the amount due is $100, the buyer may pay $98 within 10 days or $100 within 30 days.

Copyright © 2005, 2000, 1995, 1987 by Barron's Educational Series, Inc., Reprinted by arrangement with Publisher.
Copyright © 2006, 2003, 1998, 1995, 1991, 1987, 1985 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
Copyright c 2006, 2000, 1997, 1993, 1990 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
Copyright © 2007, 2000, 1997, 1987, by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
Copyright c 2000, 1994, 1987 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.

Newsletter

Weekly Roundup

Sign up for our weekly Experts roundup, delivered to your inbox each Saturday morning.

Most Recent From our Experts

AllBusiness Experts

AllBusiness Greatest Hits

;
Close

Real Business Owners, Real Business Advice!

Sign up for practical, real-world solutions from successful business owners delivered to your inbox each Saturday morning. FREE.