In a typical soft-dollar deal, a fund intentionally overpays commissions when it buys or sells stocks, and the broker rebates some (or most) of those commissions in the form of goods or services ("research") that the fund manager can use in its business. For example, a mutual fund might agree to overpay commissions to broker ABC, and broker ABC will, in turn, agree to pay for the fund manager's Bloomberg terminal for the year. The dollars are "soft" because the fund manager never actually writes a check for its terminal. Ultimately, of course, soft dollar payments reduce a fund's return to its shareholders.