http://query.nytimes.com/mem/archive-free/pdf?_r=1&res=9A06E4DB113CE733A25755C1A9619C946796D6CF&oref=slogin
Summary: As Banking Facilities develop within the past few years, it is still in question whether the cash discount hasn't outlived its usefulness and should be stopped. A Well-known business man stated that there was no scientific reason for creating cash discounts, it was created largely due to the lack of suffiecient banking facilities. Because of the massive development of the Banking System, the size of the cash discount offer has dropped considerably. The fact that the drop of the discount hasn't seriously affected anyone gives reason to believe that the system should just be done with. The Businesses greatly in favor of the cash discount being demolished seems to be grocery, dry goods, etc. stores. This is due to the fact that they carry too many small accounts because of cash discounts.
Connections: The connection from Chapter 11 to this article is Cash Discounts. A cash dicount is a reduction of the amount that is on a bill if payment is made on or before the date of discount stated on the bill. In this article from the New York Times, the abolishment of cash discounts are being argued upon. The Terms of Sale have also dropped, as they are now 1/3 or 1/2 of what they used to be. This means that what would today be a 2/10,n30 might have been a 6/10n,30. The terms of the cash discounts lowering by fifty to sixty six percent, while still not having much of an effect makes it evident that cancelling cash discounts all together might not make a huge difference.
Reflection: My opinion on cash discounts is that businesses should keep them because they attract customers, and customers will be happy getting them. If anything I believe that businesses should increase the discount given if the payment is made on or before the discount date because it will keep, gain, and help out customers. I also think that Grocery and other food stores should cancel their cash discount systems because there are so many customers and accounts, that they may have a hard time keeping track of cash discounts they offer. In the future maybe they will have an advanced computerized system that will sort out customers and their cash discount when the payments are made, but while most of it is done by man, i believe that only companies that sell more expensive and larger objects should keep the system.
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2 comments:
I disagree with you Shayne, grocery and food stores shouldn't get rid of their cash discounts because I think that, giving discounts, ie. coupons and what not, attracts more people to come buy groceries. And I don't think grocery stores would have too many accounts to deal with. I like the idea of having a bigger discount if the bill was paid on an earlier date though. This would make more people want to buy from them, but at the same time, it might cut the net profit for the company. This probably won't affect the company greatly, but it will gradually. So it's good for us but bad for them.
-Michael Li
please choose a different font colour - preferably white - thanks.
Mr. B
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