/s/ Robert Cummins

 

1.      “Net Purchases” is total Receipts less Returns less Price Protections.

2.      “Cumulative Accounting Method” means that agreed deductions, credits, allowances, rebates or other programs and deals giving Best Buy the right to DFI, offset, etc. shall be calculated on a cumulative basis relative to the total invoice amount – before such other deductions, credits, allowances, rebates or other programs and deals are applied (e.g., invoice is $100, with agreed 2% DFI and a 3% volume rebate, amount payable will be $95.00.  BBY calculates off of the $100). All programs and deals are calculated using the cumulative method off of the manufacturer’s cost.

3.      “Chargeback Accrual” (applies to all chargeback accruals except Freight Allowance: see Freight Allowance definition below) means the % or $ is charged back to the vendor based on the period’s net purchases.  Applies to all purchase order receipts between the effective date and close date of the Vendor Program Agreement.  “Auto Credit” means the % or $ can be charged back to the vendor without proof of performance.

4.      “Deduct the Invoice” (DFI) means the % or $ allowance automatically reduces per unit cost on invoice.  Applies to all purchase orders placed between the effective date and close date of the Vendor Program Agreement.

5.      “Defective Return Programs”

a.      “Defective Allowance” means the agreed DFI or chargeback accrual percentage of net purchases in lieu of Best Buy’s right to return Defective Products.

b.      “Open Return Authorization” (RA) a unique authorization number assigned to a return issued by Best Buy as a pre-approved authorization from the vendor to return defective product.  BBY will provide an electronic listing (including RA, SKU, model, quantity and preliminary pricing) of all products being returned under each Open RA.

c.      “Return to Vendor for Credit” defective product flagged as to be physically returned to vendor for credit.  Vendors must provide Return Authorization number within 2 business days of the request. Vendor will provide at least ninety (90) days advance written notice of the occurrence of a Discontinued Product.

d.      “Vendor Pays Freight for Defective Returns” means the vendor is responsible for the shipping cost of the defective product via their preferred carrier from Best Buy’s Product Return Center to the vendor’s return facility.

e.      “Destroy Authorization for Credit” A unique authorization number assigned to a return issued by Best Buy as a pre-approved authorization from the vendor to destroy the defective product. BBY will provide an electronic listing (including Destroy Authorization number, SKU, model , quantity & preliminary pricing) of all products destroyed under each Destroy Authorization. If due to environmental concerns BBY needs to send the product to a recycler, BBY will charge a fee of $.10 per lb for electronic items and $.15 per lb for items with screens.

6.      “Demo/Display Allowance” Agreed percentage or dollars off of last gross unit cost per demo/display unit in stores at SKU’s end of life. Allowance is colleted via MDF Authorization Form.

7.      “Freight Allowance”

a.      “Chargeback Accrual” means the % or $ is charged back to the vendor based on the period’s gross receipts.  Applies to gross purchase order receipts between the effective date and close date of the Vendor Program Agreement.

b.      “Deduct from Invoice” (DFI) means the % or $ allowance automatically reduces per unit cost on invoice. Applies to gross purchase order receipts between effective and date and close date of Vendor Program Agreement.

c.      Freight Terms: If Domestic Freight Collect, Fuel Surcharge applies as further described in the Collaborative Transportation Management Agreement.

8.      “Item Maintenance Allowance” Percentage of net purchases that is charged back to the vendor to offset the expenses associated with assortment & retail execution (i.e. reset labor, signage, shelf wear & tear, general maintenance).

9.      “Price Protection” means the credit to be issued to Best Buy by Vendor in connection with a price decrease for the products.  The credit is intended to compensate Best Buy for the difference between the new, lower price and the price paid or payable by Best Buy for 100% on-hand and on-order inventory of the affected products. Price Protection is taken based on Gross Invoice Cost.

10.    “Seasonal Dating” means that for purchase orders with delivery dates to Best Buy during the specified period, Best Buy shall be granted an additional number of days or discount, as agreed, to pay the corresponding invoice under open account payment terms. All seasonal dating terms are calculated off of the Gross Invoice Amount.  Best Buy will systematically apply the Seasonal Terms over invoice terms in the event of a terms discrepancy.

11.    “Store Opening Allowance (NSO/Remodel/Relocate)” refers to the amount per store to be funded by Vendor in support of Best Buy’s new store, remodels or relocations. Best Buy processes the invoice once the final store’s grand opening for the month has occurred and Best Buy deducts these allowances from Vendor’s account.

12.    “Volume Rebate” flat or tiered percentage of net purchases based on purchase volume incentives. Funding is retro back to first dollar, unless otherwise specified.

 

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