Question

When a customer returns a used product and purchases a similar new product, price reductions called ______ allowances are sometimes given.

Answer 1

When a customer returns a used product and purchases a similar new product, they may be given a price reduction called a trade-in allowance.

Step-by-step explanation:

When a customer returns a used product and purchases a similar new product, price reductions called trade-in allowances are sometimes given. This means that the customer receives a discount off the price of the new product based on the value of the used product being traded in.

For example, let's say a customer wants to purchase a new smartphone. They have an old smartphone that they no longer need. The retailer offers a trade-in allowance, where the customer can trade in their old smartphone and receive a discount off the price of the new smartphone.

Trade-in allowances are a common practice in industries such as technology and automotive, where customers frequently upgrade to newer models and trade in their old products.