Discount is a reduction or deduction (or concession) in the sale price that is extended by a seller to a buyer at the time of sale/ purchase, for multiple reasons, including marketing strategy and staging a reaction against competition. In this sense, it is applied as a percentage to the normal list price (e.g., 10%, 20%, 50%), and therefore it cannot be equal to 100%, as in such as case the offered discount becomes a full waiver of the price. This involves reduction of the actual price of a product or service in a bid, for example, to sell more quantities of a given product or service. Discounts are offered to customers across the board without differentiation or application of eligibility criteria.

Rebate is the amount of the sale price that a seller refunds (rebates) to a buyer, based on certain criteria or conditions being met. A rebate is actually a special type of discount that is refunded to a customer (i.e., a partial refund), if eligible (e.g., when the amount supplied over a period of time reaches a specific level, whether monetarily or in terms of units of products, etc.)

Furthermore, a rebate is offered for specific customers (eligible ones) at a specific time, following the payment of the full price. It is typically part of promotional strategies implemented by sellers to favor particular customers for their continued business.