What happens to a retail store's supplier rebates and loyalty program when it's sold?

Supplier rebate arrangements and customer loyalty programs are both contractual relationships, not physical assets, so whether they continue after a sale depends on the specific agreements behind them and how the deal is structured. In a share sale, the corporation that negotiated these arrangements continues to exist, so rebate agreements and loyalty program obligations generally carry forward on their existing terms, subject to any change-of-control provisions a supplier's rebate agreement might include. In an asset sale, these arrangements don't automatically transfer; each would need to be specifically assigned, and many supplier rebate programs are tied to volume commitments or relationship history that a new legal entity may not be able to step into on the same terms.

Customer loyalty programs raise an additional wrinkle: points or credit balances customers have already earned represent a kind of ongoing obligation to those customers, and a new owner needs to decide, and communicate clearly, whether existing balances will be honoured, and on what terms, since simply cancelling them can create real customer relations and potentially legal exposure.

Reviewing supplier rebate agreements and the loyalty program's actual terms and outstanding liability during due diligence avoids inheriting an unpleasant surprise, or unintentionally breaking promises made to customers.