I'm learning some vocabulary in the context of shopping and I have found some ambiguity between some words. Could someone please explain the difference between them?

refund VS. rebate


A refund is usually given when someone returns a defective or unwanted product. The product is received back at the store and the customer receives his or her money back. This return of money is called a refund. A rebate is often a reduction in price offered by the manufacturer. After the product is purchased the customer must fill out a form and mail it to the manufacturer. In a few weeks the customer will receive a check from said manufacturer. In this way the customer receives the lower price.


In the context of 'shopping', refund and rebate differ a little bit. Refund is the full amount you get of what you paid. On the other hand, rebate is not the full amount but somewhat lesser than what you paid. That's because you paid too much.

refund - Money returned to a payer
rebate - A refund of some fraction of the amount paid

For example, if you, for some reason, return the goods (worth $100) to the seller as it is, you get $100 back. In second case, if you pay tax of $100 and submit some 'tax deduction' documents as per the norms of the government, you get, say, $20 back as a rebate. OALD gives an example of a tax rebate and not a tax refund.

  • Tax refund is a more common term than tax rebate in American English.
    – user230
    May 17 '14 at 16:53

Refund - an amount of money that is given back to someone who has returned a product, paid too much, etc.

Rebate - 1: an amount of money that is paid back to you because you have paid too much
2: an amount of money that a business or company pays back to you because you have bought a particular product or service

So far, no one has pointed out that offering a rebate is usually cheaper than a running sale for the seller because many buyers will fail to follow through with filing for the rebate, but they will still consider the lower potential price when they purchase.


  • Taht's because the context defined by OP is clear. Rebate and refund in the scenario of returning something and getting money. And your additional paragraph talks about the amount of money as discount which is quite irrelevant considering OP's concern.
    – Maulik V
    May 17 '14 at 10:26
  • @MaulikV - Is clear to whom? The context defined by the OP, if I recall correctly, was "shop scope." To me, this could include owning a shop, managing a shop, or just shopping in general. Therefore, the explanation of how "rebate" is typically used seems quite relevant. May 17 '14 at 15:52

The Oxford Learner's Thesaurus says:

Refund an amount of money that is paid back to you, especially because you paid too much or because you returned goods to a shop.

Rebate an amount of money that is paid back to you because you have paid too much

with this note:

Refund is more general than rebate which only applies when you have paid too much, especially in tax or insurance money. You can get a refund when you take goods back to a shop or when the goods or service that you bought were not of the quality or standard that you had a right to expect.

(Italic emphasis mine)

Therefore, a rebate is a refund that is paid back to you because you have paid too much. A rebate could be a refund, but a refund doesn't necessarily have to be a rebate.

  • 1
    You are ignoring the other, widely used definition of 'rebate.' That is a bonus of money-back, paid by a party, (often the manufacturer,) just for purchasing a particular product during a promotional period. May 17 '14 at 15:58
  • I appreciate your comment, as I wasn't aware of my ignoring. However, in that case, I think there would be no ambiguity between the two; but I do agree that adding the information about the typical usage is good.
    – user1513
    May 17 '14 at 16:43

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .