You should never give an over allowance on a trade. There is a lot of info out there on trades but there is even more on price. Over allowance=higher pricing. Don't focus on the minority of the customers. Play the odds. Fair trade offers + fair pricing + fantastic follow up= more happy customers.
I see where you're coming from but I do occasionally show customers an over-allowance AND ACV on their trade. I'll write them side by side and show how the trade-difference and OTD the price is the same either way. I use this on (A) customers that I know are shopping me on their trade and have likely seen an over-inflated trade figure, (B) customers who recently bought their vehicle from us and might not respond well to the sting of just seeing the ACV alone, and (C) customers who are upside down in their trade.
In a consultative approach, you can break it down and show them how "most other dealer's" do it versus "the real numbers". I find that showing the overallowance allows you to justify your ACV and your price with market data, for example "I can sell mine for KBB retail and give you KBB trade-in...OR....I can sell mine for my Internet price and give you true wholesale, but it's all the same in the end"
But, yes I agree that you should never JUST give an overallowance on a trade.