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Essay / Research Paper Abstract
This 5-page paper focuses on ethical issues when it comes to vendor/retailer rebates. Bibliography lists 5 sources.
Page Count:
5 pages (~225 words per page)
File: D0_MTverere.rtf
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Unformatted sample text from the term paper:
the general public or other such target market. But from time to time, vendors and their product makers will provide incentive to
the retailers to encourage preferable placement on store shelves or stronger promotion. Such a practice is known as rebates -- and while rebates may seem somewhat into cents on
the surface, they are creating a great deal of trouble for many companies that are using them to encourage retailers to sell a product.
The biggest problem that seems to be coming up in the area of vendor-retailer rebates is how to report it on a cash flow or balance sheet. Although
this might seem to be a rather up front transaction, a great deal of press has been devoted to the difference in reported income of a company, depending on how
a rebate is treated in terms of accounting activity. For example, Ahold NV, but Dutch grocery store operator, stated during early 2003
that its U.S. Foodservice unit ended up overstating earnings by a total of at least $500 million during 2001 -- and in 2002, the company purported it had booked more
discounts from suppliers than actually received (Bryan-Low, 2003). In other words, revenues were inflated to mislead shareholders because of rebates (Bryan-Low, 2003).
In 1999, shareholders complained that Just For Feet, Inc., a shoe retailer, had used rebates to inflate revenues before finally filing for bankruptcy court protection (Bryan-Low, 2003). Shareholders claimed that
company executives ended up recording fake advertising-related rebates of approximately $7.5 million between 1997 and 1999 (Bryan-Low, 2003). Nor were these the
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