Final answer:
The correct term for the seller reducing the customer's balance due to a deficiency in the product or service is sales allowance. To reassure buyers with imperfect information, sellers can offer return policies, provide detailed product info, and supply customer reviews.
Step-by-step explanation:
The term that refers to the seller reducing the customer's balance owed because of some deficiency in the company's product or service is sales allowance. This is different from a trade discount, which is usually given at the point of sale to all customers or under certain conditions; an allowance for uncollectible accounts, which is an estimate of the receivables that might not be collected; and a sales discount, which is an incentive provided to customers for early payment.
To reassure a possible buyer who is faced with imperfect information, a seller of goods might:
- Offer a comprehensive return policy.
- Provide detailed product information and specifications.
- Supply customer reviews and testimonials for social proof.