Discount

“ Because if you did give the cash discount yourself it would be so trifling that the people would not realize it was of any advantage to them. If somebody comes in and spends a dollar with you, and you give them two cents discount, what is it to them? It is nothing at all! But if you give them trading stamps, those have a real value in their eyes. ”

“ Consequently, on either of these two theories, cash discount would have to be shown in the trading section of the profit and loss statement, in the one case as a direct deduction from sales, in the other as a selling cost.
Correct Method of Showing Cash Discount.—Other accountants maintain that cash discount is a financial management item; that a manager, in order to secure ready funds with which to take advantage of the discounts offered him on his own purchases, extends to his customers sufficient inducement to secure the early and prompt payment of their bills. ”

“ On the one hand, it recognizes that the quantity discount may be utilized arbitrarily and without justification in savings effected by quantity sales, to give a discriminatory advantage to large buyers over small ones. ”

“ DISCOUNT, in commerce, a term employed by traders, merchants, and bankers; especially by the two former, when they purchase commodities on the usual time of credit, and on condition that the seller allow the buyer a certain discount at the rate of so much per cent. per annum, for the time during which credit is generally given; provided the buyer pay ready money for such commodities, instead of taking the usual time of credit. ”

“ The usual method by which money is loaned in the great [Pg 138] industrial centers is called discount, which is the exchange of a certain sum of money for a note or other credit paper of a larger amount, the interest thus being taken out in advance. Much borrowing in the form of discount is for the same purpose as other borrowing—to acquire control of more productive agents, to embark on new enterprises. The peculiarity of the discount money-market is that an unusual number of loans are made to meet contracts that have already been made. ”

“ An allowance of 8 cents a pound, which is made on bills ordered sent by express or freight, cost of transportation payable on arrival, by the purchaser, is equivalent to a discount of front 15 to 30 per cent. from catalogue prices, varying according to quality, style, copyright, and other considerations, on different books. ”

“ Justice Story said: 'Nothing can be clearer than that, by the language of the commercial world and the settled practice of banks, a discount by a bank means, ex vi termini, a deduction or drawback made upon its advances or loans of money, upon negotiable paper or other evidences of debt, payable at a future day, which are transferred to the bank;' and he added, that if the transaction could properly be called a sale, 'it is a purchase by way of discount.'
Discount, as we have seen, is the difference between the price and the amount of the debt, the evidence of which is transferred. ”

“ Do you believe, that, if any person had notes which insured to him the payment of all the Government demands upon himself, though he had no demands upon him directly, he would not find numbers of persons who would exchange those notes for him at a premium or a discount?—Then you would have a certain proportion of the monetary system of the country circulating at a discount. ”

“ Accordingly each individual will submit to a sacrifice in order to sell his bills before the demand for them is exhausted and a discount is established; but the discount will not be greater than the estimate which the seller makes of the sacrifices which have been pointed out. The case may be briefly stated in figures, taking an instance from two commercial centres where the premium or discount paid on bills between them is not hidden or rendered more complicated by differences of currency, and where accordingly the par value is immediately plain. ”

“ It seems to me that a discount which gives a lowered cost to so large a proportion of respondent's customers and is withheld only from those whose conditions of delivery obviously impose greater handling costs, does not permit the same inferences of effect on competition as the quota discounts which reduce costs to the few only and that on a basis which ultimately is their size. ”

“ Discounsel, dis-kown′sel, v.t. (Spens.) to dissuade. [O. Fr. desconseillier—des, apart, and conseillier, to counsel.]
Discount, dis′kownt, n. a sum taken from the reckoning: a sum returned to the payer of an account: a deduction made for interest in advancing money on a bill.—v.t. Discount′, to allow discount: to advance money on, deducting discount: to put a reduced value on, as in an extravagant statement or fabulous story.—v.i. to practise discounting.—adj. Discount′able.—ns. Dis′count-brok′er, one who cashes notes or bills of exchange at a discount ”

“ In the State of New York the stock of a corporation cannot be sold below par. Where sale below par is allowed, the proper booking of the discount requires consideration. The Interstate Commerce Commission requires that discounts or premiums be shown on the books under those titles, i.e., Discount on Capital Stock and Premium on Capital Stock. This method is to be commended as being true to fact and presenting a full and sufficient record of the facts. ”

“ There are some singular discounts allowed in the book trade. They were happily illustrated on one occasion by Mark Twain. One day while the humorist was connected with a publishing house he went into a book store and picking up a volume asked the price. He then suggested that as a publisher he was entitled to 50 per cent discount. To this the clerk assented.
“As I am also an author,” said Mark, “it would appear that I am again entitled to 50 per cent discount.” ”

“ What’s the use of giving thirty-six hundred dollars for an automobile to put in my stocking when I’d be happier if you’d give me a certified check for twenty-five hundred dollars? You couldn’t get any such discount from the manufacturers, and I’d be more greatly pleased into the bargain. ”

“ With respect to any sales transaction, any discount not in excess of 5 per centum offered by the seller for the purpose of inducing payment by cash, check, or other means not involving the use of a credit card shall not constitute a finance charge as determined under section 106, if such discount is offered to all prospective buyers and its availability is disclosed to all prospective buyers clearly and conspicuously in accordance with regulations of the Board. ”

“ But suppose the sale is concluded, and one of these lines is given for the balance, do you then understand that the whole sum due is to be taken in goods?-Yes. The reason why I expect to get the shawl for a little less if large part of the price is wanted in money, is because I never consider that I realize above what I pay in goods for my hosiery, and very often there is a heavy discount off. ”

“ This may be the legal rate of interest, or any percentage agreed on in advance.
Sometimes wholesale merchants or manufacturers grant esteemed customers, in consideration of prompt payments, a discount from the regular prices. ”

“ The rate of discount for trade bills is usually 1/2 per cent. per annum higher than the rate for bank bills.
The essential feature of almost all the bills on the market is that they represent a commercial transaction, such as a sale of goods, where value passes. It is this that lends them their self-liquidating quality; for they are usually liquidated by the acceptor out of the proceeds of the resale of the goods during the currency of the bill. ”

“ What is not sold during the year becomes a remnant which is disposed of at a discount. Certain styles are not to the taste of the public, and are left to be sold at half price. All of the advances and losses must be covered by the total of sales, or the ruined manufacturer will have to cease producing. ”

“ Shniderman, 60 Harv.L.Rev., at 599-600 (Commission's approach to functional discounts "may have been influenced by the possibility of subtle price discriminating techniques through the employment of wholesalers receiving more than ample discount differentials") .↑ "In practice, the competitive effects requirement permits a supplier to quote different prices between different distributor classes-so long as those who are higher up (nearer the supplier) on the distribution ladder pay less than those who are further down (nearer the consumer) ." ”

“ The sum charged by a bank for cashing a note or time draft is called bank discount. This discount is the simple interest, paid in advance, for the number of days the note has [10] to run. Wholesale business houses usually sell goods on time and take notes from the retailers in payment. ”

“ We generally agree with this description of the legal status of functional discounts. A supplier need not satisfy the rigorous requirements of the cost justification defense in order to prove that a particular functional discount is reasonable and accordingly did not cause any substantial lessening of competition between a wholesaler's customers and the supplier's direct customers. ”

“ If it is an invariable rule of policy always to maintain a sufficient cash balance to take advantage of all discount offerings, there is nothing seriously wrong with the practice of making up the voucher and entering it for the net amount in the Vouchers Payable column ”

“ Instead of getting discounts that add to their profits, they are constantly suffering discounts of the other kind; and, too often, these, and the accumulating stock of unsaleable goods—the consequence of credit temptations in purchasing—reduce the fifteen per cent. you speak of down to ten, and even five per cent. A large business makes large store-expenses; and these eat away a serious amount of small profits on large sales. Better sell twenty thousand dollars' worth of goods at twenty per cent. profit, than eighty thousand at five per cent. ”

“ Always make a point of discounting your bills, even if you have to borrow money from the bank to do it. Let me illustrate what this will save you. Suppose that you can take a two per cent. discount by paying a bill in ten days. Now suppose you allow the bill to run to thirty days. You lose that two per cent. for an accommodation of twenty days. That is at the rate of thirty-six per cent. a year. You can borrow money from the bank at the rate of six per cent. a year, and make so much clear saving. ”

“ Not only is it our aim to have our Catalogue of greatest possible assistance to our patrons in ordering goods, but it is gotten up subject to trade discount, so that he in turn may use it in making sales to his customers of goods he does not carry in stock. ”

“ A firm buys a typewriter with a list price of $150, subject to a
discount of 20% and 10%. How much does it pay?
A discount of 20% means 0.8 of the list price, and 10% more means
0.8 X 0.9 X 150 = 108. ”

“ The employees may have to stand a good round discount to some store-keeper or tradesman in order to secure their money. The best and most satisfactory return for services can be nothing less than solid cash; it encourages better attention to business and relieves the men from possible annoyance and inconvenience. ”

“ Limitation of discounts.Sec. 18. And be it further enacted, That the said bank shall not at any time discount or loan a greater sum than double the amount of the capital stock, which shall be actually paid in. ”

“ Cash Discounts Analyzed.—Sales and purchase discounts are another class of transactions best handled through the cash book, although, strictly speaking, they are not cash transactions. When a customer buys goods on account, he is usually offered two bases of settlement, depending on the length of the credit term allowed. ”

“ Bulk Sales— The Secretary shall make bulk sales of the coins issued under this Act at a reasonable discount. (c) Prepaid Orders at a Discount- (1) IN GENERAL— The Secretary shall accept prepaid orders for the coins minted under this Act before the issuance of such coins. (2) DISCOUNT— Sale prices with respect to prepaid orders under paragraph (1) shall be at a reasonable discount. ”

“ In some articles a discount of five per cent. is allowed in London, and other large cities; and those who thus pay are usually best served. Under the idea of buying cheap, many people go to new shops; but it is safest to deal with people of established credit, who do not dispose of bad goods by underselling. ”

“ They pay 2-1/2% a year if you hold them but if you try to sell them within five years the discount means you only get about .03% on your money. Once a trustee has put you aboard this roller-coaster, he can't conscientiously advise you to get out. ”

“ Inasmuch as the sale or purchase, under this method, must be booked on a cash option basis, this treatment seems to result in a departure from true cost or in the mistake of booking only some of the elements which enter into the cost of merchandise. The price at which a merchant can sell his product must include all direct and indirect costs and provide a margin for profit. The sales discount offered is simply one of these indirect costs. It cannot be more accurately estimated than can the salesman’s salary which is a part of the sale price. ”

“ Macmillan & Co. will abate 2d. in the shilling (no odd copies) , and allow 5 per cent. discount for payment within six months, and 10 per cent. for cash. In selling them to the Public (for cash only) they will allow 10 per cent. discount. ”

“ If the whole sum of discounts continues outstanding at a given amount, there will remain permanently out in circulation a corresponding amount of paper; and if the amount of discounts is progressively increasing, the amount of paper, which remains out in circulation over and above what is otherwise wanted for the occasions of the public, will progressively increase also, and the money prices of commodities will progressively rise. ”