Bill-back ad allowance is a form of trade allowance in which retailers receive allowances for featuring the manufacturer’s brand in advertisements.
Further discussion on Bill-back ad allowance:
Retailers do not deduct bill-back allowances directly from the manufactures invoice. Instead, the manufacturer offers a discount to retailers who prominently feature their brand in the retailer’s advertisement. Once the manufacturer sees or receives proof of the ad, retailers can submit an invoice for the discount offered by the manufacturer.
Bill-back ad allowance example:
As an example, let’s say the manufacturer Coke-Cola offers retailers 5% bill-back allowance for each case of Coke-Cola product if the retailer features the brand local newspaper or other publication advertisements. Once the retailer publishes the advertisement and provides proof of the ad to Coke-Cola, the retailer can ask for a 5% ad allowance from Coke-Cola.
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