What is a Purchase Allowance?
A purchase allowance is a price reduction that a seller grants to a buyer after a sale. This reduction generally happens due to minor defects, late delivery, or other issues with the product.
Instead of returning the goods, the buyer keeps them at a discounted price, and the seller adjusts the invoice accordingly. This helps maintain customer relationships while avoiding the hassle of returns.
Think of it like ordering a pizza and getting a partial refund because it arrived cold. You still get to eat it but at a lower cost.
