Suppose a store offer a loyalty card. the stores punches the card at every visit and on the seventh visit the customer gets a 20 discount. This is an example of cumulative quantity discount.
A cumulative quantity discount is applied to the total items or quantity bought over a period of time. The buyer keep on adding to the potential discount with each additional purchase and when a certain amount is collected he gets a discount from the company.
Such a policy helps in building repeat purchases.
Quantity discount are those reductions which are given in base price as the result of a buyer purchasing some predetermined or fixed quantity of merchandise.
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