CPG Insights · 7 min

Scan-Based Trading and Scan-Backs, Explained for New Brands

Scan-based trading means you own your product until it sells. A scan-back means you pay a promotion only on units that sell. Here is how both work, where they fit, and what they mean for your cash.

Scope Shelf Editorial · November 11, 2026

A shopper paying at a store checkout terminal — Photo: SumUp on Unsplash

In 2000, Schnuck Markets in St. Louis ran a test with Andronico's Market and about a dozen suppliers. The suppliers kept owning their products right up until a cashier scanned them. Retailer sales rose 3% to 4%. Supplier sales rose 2.5% to 5.2%. Pricing errors fell 70%.

What scan-based trading is

That test, run with the Grocery Manufacturers Association and summarized in the scan-based trading entry on Wikipedia, is the cleanest picture of the idea. In scan-based trading, the supplier owns the product on the store's shelf. The store only buys it at the moment a shopper does, when it's scanned at the register.

It's common for magazines, newspapers and other products a supplier delivers straight to the store. It's rare for a brand-new food brand. But the logic behind it, paying for what sells instead of what ships, is the one that matters to you.

Scan-back promotions are the part you'll actually use

A scan-back is narrower. You agree to pay the retailer a set amount for every unit that scans during a promotion. Run a dollar off for four weeks, and you pay a dollar for each unit the register records in those four weeks. Not one unit more.

Compare that to an off-invoice deal, where you discount everything the store buys whether it sells or sits in the back room. The table below lines up the common terms. Filter by when you pay.

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Scan-based trading	You own the product on the shelf until it's scanned at the register	When it sells	Low cash risk, but you carry shrink and unsold stock
Scan-back	You pay a set amount per unit scanned during a promotion	When it sells	Low. You pay only on real sales
Off-invoice	A discount on every case the store or distributor buys	When they buy	Medium. You pay on product that may never sell
Slotting fee	A one-time payment for a place on the shelf	Before it sells	High. Kept even if the product is dropped
Free fill	Free product to stock the shelf the first time	Before it sells	High. Your first shelf is on you
Promotion chargeback	Discounts billed back to you after a promotion runs	After the promotion	Medium. Often bigger than planned

Scan-based trading
What it means
You own the product on the shelf until it's scanned at the register
When you pay
When it sells
Risk to a new brand
Low cash risk, but you carry shrink and unsold stock
Scan-back
What it means
You pay a set amount per unit scanned during a promotion
When you pay
When it sells
Risk to a new brand
Low. You pay only on real sales
Off-invoice
What it means
A discount on every case the store or distributor buys
When you pay
When they buy
Risk to a new brand
Medium. You pay on product that may never sell
Slotting fee
What it means
A one-time payment for a place on the shelf
When you pay
Before it sells
Risk to a new brand
High. Kept even if the product is dropped
Free fill
What it means
Free product to stock the shelf the first time
When you pay
Before it sells
Risk to a new brand
High. Your first shelf is on you
Promotion chargeback
What it means
Discounts billed back to you after a promotion runs
When you pay
After the promotion
Risk to a new brand
Medium. Often bigger than planned

Standard industry definitions. Exact terms vary by retailer and distributor, so read each agreement.

What it means for your cash

The good

You pay for results. A promotion that doesn't move product doesn't cost you much.
You get real sales data, by store and by week, because payment depends on it.
It's an easier yes for a buyer, because the store isn't stuck with your inventory.

The catch

Under full scan-based trading, you own the product until it sells. Theft and damage in the store can come out of your pocket.
You get paid later, when product sells, not when it ships.
Both sides need clean data. If the store's prices and records are wrong, your bill is wrong.

How Spotlight Shelf uses scan-backs

We built Spotlight Shelf around the same idea. Our distribution buys your product and places it in the store, so you're not consigning inventory or paying for a shelf. What you fund is marketing, promotions and scan-back credits: money tied to shoppers actually buying.

Your product sits on a merchandiser shared by 8 to 12 brands, in at least 10 stores for 90 days, with 10 to 20 more stores on regular shelves. Campaigns start at $10,000. Brands that sell through earn a permanent spot and distribution into 100+ doors. Compare that with the upfront costs in our guide to slotting fees.

What to do next

When a buyer offers a promotion, ask whether it can run as a scan-back instead of off-invoice.
Before agreeing to full scan-based trading, find out who pays for theft and damage.
Ask for weekly sales data by store in writing, as part of the deal.
Budget promotions per unit sold, not per case shipped.