Foretravel, Inc. - Page 36

                                                 - 36 -                                                    
            necessary, and then the dealer would in turn adjust the retail                                 
            price to the consumer.                                                                         
                  The rebates offered to dealers when petitioner was in need                               
            of cash also qualify as purchase price reductions between                                      
            petitioner and the dealers.  Petitioner needed cash, and                                       
            petitioner had extended credit to the dealer.  Petitioner offered                              
            the dealer a rebate with the general understanding that the                                    
            dealer would reduce the retail price to the consumer.  The sale                                
            to the consumer put cash in the dealer's hands, which enabled the                              
            dealer to reduce the credit balance owed to petitioner.                                        
            Petitioner's need for cash and the rate of sales at the retail                                 
            level, coupled with the price the consumer was willing to pay the                              
            retailer for a coach, would determine the rebate needed, if any,                               
            to put the product into the hands of the consumer.                                             
                  These factors highlight why a numerical formula setting                                  
            forth the amounts of the rebates may not be practicable in all                                 
            instances.  The fact that a dealer may receive a used coach as a                               
            trade exacerbates the uncertainty, because the used coach must be                              
            valued in order to determine the amount realized by the dealer at                              
            the retail level.  The product sold by petitioner is unique, and                               
            the particular rebates needed to move merchandise into consumers'                              
            hands could fluctuate to such an extent that the rebates could be                              
            determined appropriately only on a transaction-by-transaction                                  
            basis.  We conclude that petitioner's failure to reduce its                                    
            rebate policy into a numerical formula is not fatal to                                         




Page:  Previous  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  Next

Last modified: May 25, 2011