1. When a "friend" asks for deeply discounted pricing on an item you are selling, essentially robbing you of money you could easily make from any average buyer, and you grant it almost exclusively because you'd feel bad if you didn't.
2. When a friend immediately demands payable the privilege of knowing him/her in the form of a discount.
"I'm selling my XBox 360 for $140 on craigslist."
"My XBox just red-ringed. Can I get a friend discount on that?"
"Okay, I'll give it to you for $100."
"Sweet, thanks man!"