Undercharge

To bill a customer or client an amount that is less than the standard or actual cost of a service, product, or good provided. This can happen intentionally, perhaps as a promotional tactic or a gesture of goodwill, or unintentionally due to errors in calculation, oversight, or misinterpretation of pricing structures. Undercharging typically results in a loss of revenue for the business or individual providing the service. The degree to which an entity is undercharged can range from a minor discount to a situation where services or goods are practically given away. Understanding the reasons and implications of undercharging is crucial for businesses aiming to maintain financial stability and profitability.

Undercharge meaning with examples

• The restaurant, in an attempt to attract new customers, decided to undercharge for all appetizers for the first month of its grand opening. This created a buzz and increased foot traffic immediately. However, they soon realised it was unsustainable.
• Due to a clerical error, the invoice **undercharged** the client for the extensive consulting work completed. The project manager quickly corrected the error, but not before the client was somewhat displeased with the initial 'lower price' that was offered.
• During the holiday season, the online store frequently **undercharged** for shipping due to a glitch in their automated system. This was discovered and corrected quickly, causing a temporary rise in volume of orders.
• As a gesture of apology for a previous service disruption, the local repair shop chose to undercharge the customer for their repair work, hoping to restore customer trust after the bad experience.
• The salesperson, eager to close the deal, intentionally **undercharged** the client for a bulk order of office supplies, hoping to secure the contract, even though the deal wasn’t so profitable.