As was explained to me:
The record companies produced more than could realistically be sold of that particular LP. So to get them into the pipeline, they sold/pushed them on many outlets at greatly reduced fees. But just in case any of that record was returned for credit, it was a means for the record company to be sure they returned the right amount to the outlet, and not more.
Lets say that a record was normally sold to an outlet for $5.00, which then sold it to us for $7.00. Now if this LP wasn't selling, the record company would sell/push it for $1.00 (with the cutout) to get it into the pipeline, hoping that more would sell, and they would get stuck with less. Now if it didnt sell, the outlet couldnt return it to the record company, claiming that they paid $5.00 for it, when in fact they had only paid $1.00. A deterant for fraud, if you will.
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The record companies produced more than could realistically be sold of that particular LP. So to get them into the pipeline, they sold/pushed them on many outlets at greatly reduced fees. But just in case any of that record was returned for credit, it was a means for the record company to be sure they returned the right amount to the outlet, and not more.
Lets say that a record was normally sold to an outlet for $5.00, which then sold it to us for $7.00. Now if this LP wasn't selling, the record company would sell/push it for $1.00 (with the cutout) to get it into the pipeline, hoping that more would sell, and they would get stuck with less. Now if it didnt sell, the outlet couldnt return it to the record company, claiming that they paid $5.00 for it, when in fact they had only paid $1.00. A deterant for fraud, if you will.
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