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Secret Rebate

Definition - What does Secret Rebate mean?

A secret rebate is an illegal business practice where a preferred customer receives a money kickback. The business offering a secret rebate offers this kickback to the preferred customer because the customer is influencing others to buy from the business through inducement or by simple example.

A secret rebate offends contemporary views of fair business practices because buyers are induced to buy for reasons beyond the open and free market.

Justipedia explains Secret Rebate

In many jurisdictions, a business caught offering a secret rebate withheld from the general public is subject to fines and even criminal penalties.

The dominant theory of capitalism holds that the government should ensure that the market is not unfairly influenced. In this way, the government can make sure that buyers keep the best businesses operating, while weaker businesses naturally fail.

If business is compared to a game with rules, a secret rebate is considered cheating

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