A billback is a trade promotion the retailer claims after the fact. The retailer buys the product at the regular price, sells it on promotion, and then bills the brand for the agreed allowance based on what moved during the promotional period.
The brand and retailer agree on an allowance and a window before the promotion runs. The retailer purchases at normal cost, so nothing is discounted at the point of sale between them. The promotion then runs in store.
Afterward the retailer submits a claim for the allowance, calculated on units sold or shipped during the window depending on the terms. In practice the claim usually arrives as a deduction from an invoice rather than as a bill the brand chooses to pay.
Billback is one of three common ways to fund a promotion. Off-invoice discounts the purchase order up front, which is simple but funds units regardless of whether they sell. Scan-down pays per unit scanned at the register. Billback sits between them, settling after the period against agreed terms.
Billbacks keep the brand's money attached to a promotion that has actually run, which is better than funding inventory that may sit in a warehouse.
The cost is reconciliation. Because the claim arrives later and usually as a deduction, the brand is checking a number produced by the retailer against an agreement made weeks or months earlier. Where the documentation is loose, the claim is difficult to challenge, and brands routinely pay claims they cannot fully verify because disputing them costs more than the difference.
A brand agrees on a billback allowance for a promotional period at a regional chain. Ten weeks later a deduction appears referencing that promotion, calculated on a unit figure the brand has no independent way to check. The amount is close enough to expectation to approve, and slightly higher than the brand modeled.
Agreeing on the allowance without agreeing on the basis of calculation. Units shipped and units sold during a promotional window can differ substantially, and which one the claim rests on is worth settling in writing before the promotion runs rather than after the deduction lands.
Where TrueLoyal fits: Billback sits entirely between a brand and its retailer. TrueLoyal operates on the other side of the shelf, giving brands a direct relationship with the shoppers who opt in through receipt scanning and member programs.
Off-invoice discounts the purchase order at the time the retailer buys, so the brand funds every unit purchased. Billback settles after the promotion has run, against units sold or shipped in that window, so the funding is attached to a promotion that actually happened.
In effect it is. Both are claimed after the event rather than discounted up front. Scan-down is the narrower case where the claim is calculated per unit scanned at the promotional price at the register.
Retailers generally net claims against invoices they owe rather than paying the brand and then invoicing separately. It is administratively simpler for the retailer and shifts the reconciliation work to the brand.
Document the allowance, the window, and the basis of calculation before the promotion runs, and keep that record somewhere finance can reach it months later. Most billback disputes are lost on documentation rather than on the merits.
A scan-down is a promotional discount funded by the brand and applied at the register. The shopper pays the reduced price, the retailer records each discounted unit as it scans, and the brand reimburses the retailer for the difference on the units that actually sold.
Trade spend is the money a brand pays a retailer to get its products onto the shelf and moving off it. It covers slotting fees for new items, promotional discounts, display and feature advertising, and allowances of various kinds. For most brands selling through retail it is the largest cost line after the cost of goods, commonly running between 15% and 25% of gross sales.
A trade deduction is money a retailer subtracts from an invoice instead of paying it in full. The retailer takes what it believes it is owed, pays the remainder, and leaves the brand to work out what the shortfall was for.
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