Definition of patronage dividend and rebate

wholesaler vouchers issued to retailers and used as incentive builders by wholesalers to generate increased retailer sales and goodwill. A patronage dividend occurs when a wholesaler offers a retailer a pro rata share of earnings from one or many of the wholesaler's products. A patronage rebate, on the other hand, occurs when a wholesaler refunds part of a retailer's original payment for goods. In both cases, payment may be issued to retailers in the form of a bank check or a merchandise credit voucher.