Trade-Ins Versus Supplier Discounts: How to Process

This message provides clarification on trade-ins versus supplier discounts, and how to process the Requisition in each case:

• A trade-in is when a supplier offers a discount on a new purchase in exchange for trading in an old item. For example, when purchasing a new refrigerator, a supplier may provide a discount to the buyer for trading in their old refrigerator.   An item trade-in is not to take place until the resulting Purchase Order is fully approved and emailed to the supplier.
  • A trade-in is identified in two places:
    • In the Billing section on the Requisition, specify the dollar amount of the trade-in in the Asset Trade-In Value field.  The amount should be entered as a positive dollar amount.  The trade-in amount will be deducted from the order total at the time of invoicing by Accounts Payable, but the tax will be assessed on the full pre-trade in value of the item, per California tax law.
    • If the item meets the definition of a capital asset, enter the specific asset number for the trade-in item on the Capital Asset Form.  If the item being traded in does not meet the definition of a capital asset, the information on the trade-in, including item description, model number, and serial number is to be included in the Notes and Attachments section of the Requisition (e.g., “Dell laptop 5410 series 345, serial number 34556 being traded-in as part of this purchase.”).

• A supplier discount is often presented as a percentage or specific dollar amount reduction from the total order or specific line item.   When a supplier offers a discount not related to a trade-in, do the following:
  • Since negative dollar amounts are not possible on the Requisition document, the discounted final price should be reflected in the Price field for the specific line item(s), with a note indicated in the Item Description field identifying the original price.  Whenever possible, we recommend that you contact the supplier and ask them to prepare a price quote that already reflects the discounted price(s).

• Questions on equipment trade-ins? Submit Equipment Management-related questions via the “Ask a Question” tile in AggieEQ.
• Questions on supplier discounts not associated with a trade-in? Submit an Aggie Enterprise Help Request ticket or join Supply Chain Management at Office Hours Tuesday through Thursday, 11am to noon.