A rain check is a type of assurance that an offer extended at the present time but not accepted will still be available at some point in the future. In terms of finance, this typically translates into merchants allowing customers to claim discounts or special pricing on items currently advertised at those special rates, even though the inventory of those goods has been exhausted. The idea is that the merchant will secure more units of those goods in the future and allow customers provided with the rain check to buy those units at the promised discount price rather than having to pay standard rates.
The overall concept of a rain check is to allow customers to make use of something offered today at a later date, due to some type of extenuating circumstance. One of the best illustrations of this approach can be found with a business such as a public golf course. When a player has already tendered payment for use of the course and a rainstorm develops that makes it impossible to enjoy the services already paid for, the owner of the course provides the player with a voucher or note that can be redeemed to use the facilities at a later date, without the need to tender a second payment.
Retailers often make use of the rain check when the demand for goods on sale exceeds their expectations. Rather than disappoint customers who seek to buy the goods after the supply is exhausted, merchants issue a promise or commitment to secure additional units and allow those consumers to buy the units at the sales price. For example, if an electronics store runs a special price on a specific television model and all the units on hand are sold, the owner may at his or her discretion, issue rain checks to subsequent customers who seek to buy the set before the official end of the sale occurs. Once the model is restocked in the inventory, the owner notifies those customers holding the voucher note that the sets are again available and the vouchers can be redeemed within a specified window of time. Assuming that the consumers do present the vouchers within that time frame, they can purchase the sets at the previous sales price, even though the sale has ended.
The same general approach is found in situations involving a collateralized borrowing and lending obligation (CBLO). The exact structure of this loan note may be in the form of a promissory note, in which the debtor agrees to repay the lender by a certain date, or upon presentation of the note by the debtor. Depending on the nature of this type of rain check, interest may be applied to the amount owed that is also due by the date specified in the note. In all its forms, the rain check establishes a commitment between the two parties involved, with each party taking on specific responsibilities in order to complete the transaction to the mutual benefit of everyone involved.