These payments go by many names: rebates, trade discounts, supplier funds, slotting fees,
advertising allowances, dealer incentives, markdown money, bill backs, buy downs, off-invoice allowances, return privileges, lease incentives, charge backs, and others.
The premise that generic manufacturers'
advertising allowances and professional allowances will keep pharmacies in the black "or in some cases just afloat" is flawed and needs to be changed, says Thompson.
The allowances are most often referred to as "co-op" or co-operative
advertising allowances, but, in reality, they comprise a group of possible allowances for a retailer's sales of a particular product, store fixtures, distribution, in lieu of warranty, damaged goods, and so on.
Although not all deductions and disputes are preventable--such as those in the area of marketing and trade promotions,
advertising allowances, and instant rebates at the point of sales (scan-downs)--an automated deductions management system can go a long way toward preventing the disputes that can be prevented, freeing-up collector's time to resolve those that will inevitably occur.
"We must ensure competition laws are kept under review and enforced vigorously when needed." The new Competition Act will ban the fixing of minimum prices by suppliers, unfair discrimination in the grocery trade and the payment of
advertising allowances.
Beyond the merchandise mix, both chains were criticized by vendors for such business practices as chargebacks,
advertising allowances and numerous other "schemes."
* MANY RETAILERS RECEIVE COOPERATIVE
advertising allowances that are volume-based.
Because most vendors offer cooperative
advertising allowances through their trade discount programs, and taxpayers generally view such payments no differently from other discounts, there have been disputes over the correct tax treatment of such amounts.
To encourage adequate spending on local advertising, many administered and contractual VMS also provide financial incentives in the form of
advertising allowances and/or cooperative advertising programs (Somers, Gupta, and Herriott, 1990).
It cost a bundle to produce, and vendors were encouraged to participate by the offering of large
advertising allowances and cash deal incentives to offset print and distribution expenses.
In-store demos, promotional discounts, sales incentives, package deals, and
advertising allowances are all available.
We make sure they are all competitively priced and offer co-op
advertising allowances to participate with the individual retailers.
