What is Trade-In?
A trade-in is when a customer hands over an old item, such as a used phone or old gold, and its agreed value is counted towards the price of a new one.
Updated
Meaning
English
A trade-in is when a customer hands over an old item, such as a used phone or old gold, and its agreed value is counted towards the price of a new one.
Roman Urdu
Trade-in matlab gahak purani cheez, jaise purana phone ya purana sona, de kar us ki tay shuda qeemat naye saman ki qeemat me shamil karwata hai.
Also called exchange, part exchange, old for new, purana do naya lo.
Example
A customer buys a new phone for 95,000 rupees and trades in his old phone, valued at 32,000. He pays 63,000 in cash. The old phone enters stock as a used phone at a cost of 32,000.
How it works
Trade-ins are common in mobile shops, jewellery (old gold exchange) and appliances. They make the sale easier for the customer, but they are often recorded badly: the shop treats the trade-in value as a discount. That makes profit look lower than it is, and the old item enters stock with no cost, so its later sale looks like pure profit.
The right way is to treat the trade-in as a form of payment: the new item is sold at full price, the old item is "paid" for at its agreed value and enters stock at that cost. For phones, record the IMEI of the traded-in unit.
In Nafaa
Nafaa records a trade-in as a payment, not a discount, so profit stays correct and the discount PIN is not triggered. It is used for old gold in jewellery and exchange phones in mobile shops, and appliance trade-ins carry a code that pays at checkout.
Related terms
- Split Payment
A split payment is one bill paid with more than one method, such as part cash and part card, wallet or khata.
- Consignment
Consignment is an arrangement where goods are placed in a shop to sell, but the owner of the goods is paid only after they are sold.
- Making Charges
Making charges are what a jeweller charges for the labour of making a piece, added to the value of the gold or silver in it.