Vac "N" Sew, a consumer electronics outlet, offers a price reduction of $100 when customers bring in a used vacuum cleaner and exchange it for a new vacuum cleaner or sewing machine. This is an example of a ________.

Question

BlackTom AI · Accepted Answer

The scenario describes a pricing arrangement where a customer trades in an old vacuum cleaner and receives a reduction in price on a new vacuum cleaner or sewing machine. This is a typical example of a trade-in incentive, where the value of the old item is credited toward the purchase.

Option 1: trade-in allowance. This matches the described mechanism exactly, as the policy provides an allowance or credit for exchanging a used item toward a new purchase.

Option 2: functional discount. Functional discounts are reductions given to channel members (like wholesalers or retailers) for performing certain distribution functions, not incentives tied to consumer exchanges of used goods.

Option 3: seasonal discount. Seasonal discounts are offered to encourage purchases during particular times of the year or seasons, not tied to any exchange of used products.

Option 4: cash discount. A cash discount is a price reduction offered for paying with cash or within a specified payment window, separate from any trade-in or credit for old merchandise.

Option 5: by-product allowance. By-product allowances pertain to credits or compensation related to selling or utilizing by-products from production processes, not consumer trade-ins of used consumer goods.

In summary, only the trade-in mechanism described aligns with the concept of a trade-in allowance, while the other options refer to different pricing or discount concepts that do not fit the scenario.

Test: Exam 2

Vac "N" Sew, a consumer electronics outlet, offers a price reduction of $100 when customers bring in a used vacuum cleaner and exchange it for a new vacuum cleaner or sewing machine. This is an example of a ________.

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