SAP Free goods functionality is defined as being a discount in the form of free goods. This means, instead of a rebate on the sales price the customer receives a higher quantity or part of the ordered quantity for free. Depending on the free goods condition setup the system generates a subitem for the entered material.

For free goods the condition type NA00 needs to be maintained with transaction codes:

• VBN1 Create Free Goods determination
• VBN2 Change Free Goods determination
• VBN3 Display Free Goods determination

## Inclusive Free Goods

In thie case, the customer receives part of the ordered quantity free of charge. Depending on the customizing a subitem is generated or a discount is calculated during pricing.

For example, customer A orders 100 cartons of material A. The customer should receive 10% of his order as a bonus for free. If a free goods condition with inclusive free goods is maintained the customer receives 100 cartons and gets billed only 90 cartons. The difference of 10 cartons is free of charge. Inclusive means that the free of charge quantity is part of the ordered quantity.

## Exclusive Free Goods

Exclusive free goods are the free goods type where free goods are delivered in addition to the quantity ordered. The free of charge goods always appear as a free subitem. Unlike inclusive free goods, the free of charge item can also have a different SKU.

For example, customer A orders 100 cartons of material A. As a bonus, the customer should also receive 10 cartons of material B free of charge. The customer will receive in total 110 cartons, 100 of material A and 10 of material B. Only 100 cartons of material A are invoiced.