rebate

Definitions (3)

1. A partial refund following a purchase.
2. For a bill of exchange, a discount that is offered if the bill is paid before maturity.
3. The portion of interest on short sale proceeds that is paid out to the borrower of a bond as an incentive for them to borrow the stock from a specific source. When a short sale takes place, the short seller often borrows a security through a lender (who acts as an intermediary), who in turn borrows the security from an owner of custodian. The short sale's proceeds are then returned to the lender, who then invests the proceeds and earns interest on them. Certain short sellers might demand a portion of this interest, in order for them to do business with that particular lender.

Use rebate in a sentence

Although it is also pre-negotiated, a rebate differs from a discount because the purchaser doesn't receive any money back until after he or she has paid the full sales price.

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