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.
It is sometimes called a scan allowance or scanback.
The brand and retailer agree on a discount amount per unit and a promotional window. During that window the retailer sells the product at the reduced shelf price. The point-of-sale system counts every unit scanned at the promotional price, and at the end of the period the retailer claims the agreed amount per unit scanned, usually as a deduction from an invoice.
The defining feature is that the brand pays on units sold rather than units shipped. If the promotion underperforms, the brand funds less. If it overperforms, the brand funds more, which is a cost but also a signal the promotion worked.
This is what separates it from an off-invoice discount, where the brand discounts the whole purchase order at the point the retailer buys, whether or not those units ever reach a shopper.
A scan-down ties brand money to shopper behavior more tightly than most other forms of trade funding, which makes it one of the cleaner mechanisms available.
It also produces a count. The retailer knows exactly how many discounted units moved, and that count is the basis of the claim. For a brand with no other window into store-level sales, the scan data behind a scan-down claim is one of the few hard numbers it sees.
What the count does not contain is a shopper. The brand learns that eleven thousand units sold on promotion. It does not learn whether that was eleven thousand different households or a smaller number buying several each, and it has no way to recognize any of them next time.
A brand runs a one dollar scan-down for four weeks across a grocery chain. The chain reports 42,000 units scanned at the promotional price and deducts $42,000. The brand knows what the promotion cost and how many units moved. It cannot tell how many distinct shoppers that represents, or how many bought again after the price went back up.
Treating scan-down volume as a measure of new buyers. The mechanism counts units rather than people. A deep discount reliably pulls forward purchases from buyers who already use the product, and that looks the same in a scan count as genuine new trial.
Where TrueLoyal fits: Scan data tells a brand how many units moved. A member who scans a receipt tells the brand who bought, which is the piece retail reporting cannot supply. The two answer different questions and are worth keeping separate.
Both are claimed after the promotion runs rather than discounted up front, and scan-down is really a specific type of billback. The distinction worth holding onto is the basis of the claim. A scan-down is calculated per unit scanned at the promotional price at the register. A broader billback may be calculated on units shipped or sold during a period under a negotiated allowance.
It depends on how the promotion performs. An off-invoice discount is fixed at the point the retailer buys. A scan-down scales with what actually sells, so a strong promotion costs more and a weak one costs less.
The retailer does. The brand funds a discount, but retail pricing is the retailer's decision, and the shelf price may not fall by the full amount funded.
It gets a unit count for the promotional period, which is the basis of the retailer's claim. It is aggregate. It identifies no individual shopper and cannot be connected to any purchase the same person makes later.
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.
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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