what is a pro rata discount 
a pro rata discount is a type of discount a merchant offers a customer companies offer customers discounts for a variety of reasons they might offer one as an incentive to a new customer to try a product or service they might offer a discount if the customer makes a purchase during a specific time or as a bonus to a returning customer the pro rata part of the discount varies depending on how the merchant has structured their offer a merchant might offer a new customer 20 off their first purchase of products if they spend 100 or more each item would receive a 5 discount if the customer buys four products a pro rata discount could also apply if a customer joins a monthly subscription service on any day other than the first of the month the merchant would apply a pro rata discount and only charge the customer for the number of days in the month they had the service rather than charging the full subscription price for the month the bottom linepro rata translates to in proportion in latin each entity or individual is entitled to a share of a whole that s equal to their ownership percentage it s a common concept in business finance and investing dividends are awarded to investors based on the proportion of their investment to the whole a shareholder who owns 100 000 of a company s 1 million outstanding shares owns 10 of the company s outstanding stock and is therefore entitled to a pro rata portion commensurate with 10 of dividends paid 