Rebates, rebate types, and rebate categories
A rebate is money that a supplier agrees to pay a customer, often involving purchasing a certain amount of goods or services from that supplier.
Rebates in Contract Management can be defined, calculated, and tracked.
Rebate types
In contract management, a rebate type is used to categorize your rebates.
Multiple rebates can be assigned to a rebate type. For example, you can create a rebate type for supplies that contain supply-related rebates, and another rebate type that contains administration-related rebates.
After you create a rebate type you can add a rebate to a contract based on the rebate type for which the contract is eligible.
Rebate categories
- Growth Rebate
A growth rebate is based on incremental purchases over the previous period of purchases. For example, if the growth in purchases is greater than 5% but less than 6% compared to the previous period, then the rebate is 5%. If the growth in purchases is greater than 6% but less than 7% compared to the previous period, then the rebate paid is 6%.
If the growth in purchases is greater than 7% but less than 8% compared to the previous period, then the rebate paid is 7%.
When you select Growth Rebate, a check box is available to calculate the expected rebate on the growth from last year to this year only.
- Standard Rebate
- A standard rebate is used based on the total amount purchased of certain items or codes against the amount purchased from the contract. For example, the amount purchased for a group of items on this contract is greater than $49,999, then a rebate of 2% is applied.
- A market share is used when the purchases against this contract are compared to all purchases for a group of items or codes. For example, if the amount of purchase for an item on a contract is 80% or more of the total amount purchased for the item across all purchases, then a 2% rebate is applied.
- Loyalty Rebate
A loyalty rebate is used when you receive a rebate that is based on the maintenance of a certain percentage or amount of the previous rebate due period. For example, if the amount purchased for a group of items on a contract was 90% last quarter and 90% this quarter, then a rebate is due.
- Fixed Rebate Amount
Fixed rebates have a fixed amount with no qualifiers, regardless of the amount that is spent. For example, on a construction contract, a rebate of $1,000 is due at the end of the contract period.
- Multiple Threshold Rebate
This rebate type is used for earning rebate percentages or amounts based on thresholds of qualification spend. For example, if the amount purchased was between $10,000 and $14,999, then a rebate of 2% is due. If the amount purchased was over $15,000, then a rebate of 3% is due.
- Supplemental Rebate
Use this rebate type to associate this type with a multiple threshold rebate. The two rebates share qualification contracts, items, and codes but have varying levels of qualification from one another and earned rebate percentages or amounts. For example, if you have a multiple threshold rebate that is based on quarterly spend of $15,000 and only qualified for two quarters. The supplemental rebate is defined for a total amount on an annual basis more than $40,000, then the supplemental rebate is applied.