Question

T.J. Maxx, an American department store chain, offers price reductions to customers who are willing to purchase slightly damaged merchandise. Which of the following refers to this practice?

O Net sales
O Sales returns
O Sales allowances
O Sales discounts

Answer 1

T.J. Maxx utilizes 'Sales allowances' to provide discounts for damaged goods. A 'sales allowance' is distinct from broader sales discounts or sales returns. L.L.option c.

Step-by-step explanation:

The practice of T.J. Maxx offering price reductions to customers for purchasing slightly damaged merchandise is known as Sales allowances. This practice allows stores to sell items that may have minor imperfections at a discounted rate rather than returning them to suppliers or discarding them. It is different from sales discounts, which are typically offered to all customers for promotional reasons, or sales returns, where customers return goods they have purchased. In contrast, sales allowances specifically deal with reducing the price of items to account for their damaged state.

In the context of a mail-order business like L.L. Bean, addressing issues such as imperfect information about products is crucial. Since customers cannot inspect items in person, the company combats this by building a reputation for quality and offering a money-back guarantee, which helps assure customers about their purchases and encourages business growth.