Retail Glossary

The following glossary terms are frequently used in retail businesses.

A

Account

A category used to group financial information and to create financial statements for a business. Accounts are typically represented by an account number. A well-defined chart of accounts is essential for good financial records.

Accounting interface

A method of transferring distributions and vouchered receivings from retail software to an accounting software package.

Accounts payable

Amounts owed to others (a liability) for goods or services purchased on credit.

Accounts receivable

Amounts owed to a business (an asset), usually by customers who purchased goods or services on credit.

Ad Valorem

According to value. This is a tax imposed on the value of property (references a general property tax), which is typically based on the local government’s valuation of the property.

Adjustment

An increase or decrease to the quantity indicated in the retail software package. The adjustment ensures that the records in the retail software match the actual physical quantity in inventory.

Additional markdown

An increase of a previous markdown to further lower the selling price.

Aging

A process that determines the age (number of days old) of customer open items.

Allocated purchase order

A purchase order that includes goods intended for delivery to multiple locations. Items ordered with an allocated purchase order can be shipped to a single location, and then transferred to their final locations, or they may be shipped to each individual location from the vendor.

Alphanumeric

Consisting of letters, numbers, and/or special symbols (*, &, $, etc.) in any combination.

Alternate unit

Represents a secondary unit of measure for receiving or selling an item. For example, the stocking unit for an item might be 'each,' but you might receive an item by the alternate unit 'case.'

Anchor stores

A major retail store used to drive business to smaller retailers. These larger department stores or grocery stores are generally part of a retail chain and are the prominent business in a shopping mall. Increasingly, malls are looking at more than one anchor store.

Audit trail

A method of tracking transactions through the entire sequence of their history so that all financial information can be traced. Certain reports should be printed or stored electronically in the retail software as part of the business's permanent records.

Authorization

The act of ensuring the cardholder has adequate funds available against his or her line of credit. If authorized, an authorization code will be generated and adequate funds are set aside. The cardholder's available credit limit will be reduced by the authorized amount.

Available quantity

The quantity of an item that is currently available for sale. Generally, the available quantity is equal to the on-hand quantity minus any quantities set aside for open orders.

Average cost

An accounting cost method achieved by calculating or recalculating a weighted average of the cost of all inventory items currently in stock. This cost is recalculated each time items are added to the inventory, and in certain situations, when items are removed from inventory.

Average Inventory Cost

Average inventory cost is found by adding the beginning cost inventory for each month plus the ending cost inventory for the last month in the period. If calculating for a season, you would divide by 7 and for the a year it would be 13.

B

B2B (Business-to-Business)

Business model focused on sales to other businesses. Manufacturers, wholesalers, and suppliers are typical B2B companies.

B2C (Business-to-Consumer)

Business model focused on sales to consumers. Retailers are typical B2C companies.

B2G (Business-to-Government)

Business model focused on sales to national, state, or local government agencies.

Backorder

A type of order normally created when there is insufficient quantity available for a sale or order.

Balance sheet inventory account

An account that tracks the value of on-hand inventory.

Balloon Payment

A large principal payment that typically becomes due at the conclusion of the loan term. Generally, it reflects a loan amortized over a longer period than that of the term of the loan itself (i.e. payments based on a 25 year amortization with the principal balance due at the end of 5 years).

Bankruptcy

Proceedings under federal statures to relieve a debtor who is unable or unwilling to pay its debts. After addressing certain priorities and exemptions, the bankrupt’s property and other assets are distributed by the court to creditors as full satisfaction for the debt.

Barcode

A unique identifier for an inventory item or for a particular color/size combination for an item. A barcode may be printed in machine readable format using one of a number of common symbologies, such as UPC-A, Code 39, etc.

Base Rent

A set amount used as a minimum rent in a lease with provisions for increasing the rent over the term of the lease.

Batch processing

A processing model for entering several transactions in sequence, then finalizing (or posting) all of these transactions at the same time. Batch processing allows multiple employees to enter and edit the same types of transactions simultaneously in their retail software.

Bill of Lading (BOL)

A shipping document that serves as evidence that the carrier received shipment and as a contract between carrier and shipper.

Bin

Represents a physical place to store inventory. Bins are subdivisions of a location and are used to locate items. Generally, bins refer to physical rows/shelves or to actual bins.

Biometric

A measurable characteristic or unique trait, such as a fingerprint, used to recognize the identity of a person. Biometric devices can be used with retail point of sale systems as a secure log in mechanism.

Black Friday

The day after Thanksgiving. While Black Friday is often thought of as the busiest retail shopping day of the year, in fact the busiest retail shopping day of the year is usually the Saturday before Christmas.

The origin of the term Black Friday comes from the shift in profitability during the holiday season. Black Friday marks the day when many retailers shift from being unprofitable, or "in the red," to being profitable, or "in the black."

Brick and Mortar

Brick & mortar means a store with a physical presence. As opposed to it are virtual stores that are present on the net. These days, most retailers have a brick and mortar presence as well as an online store.

Break-Even Point

The point in business where the sales equal the expenses. There is no profit and no loss.

Business Plan

A business plan is a detailed document describing the financial and operational objectives of a company. In retail, a business plan needs to clearly specify the kind of retail - in terms of products, size of the outlets and pricing , target group it wants to attract in addition to other things.

Buyer

An executive who is responsible for selecting, pricing, and purchasing merchandise. In many companies, the term "buyer" designates a department manager, whose responsibilities include, but are broader than, the purchasing function.

C

Calendar

A schedule that defines the beginning and end of an accounting year. For retail purposes, the calendar year may be divided into seasons, months, and weeks.

Calendar year

A 365-day period that begins on January 1 and ends on December 31.

Cash discounts

Discount on the retail price when a shopper pays cash for an item. Many merchants encourage shoppers to pay cash in order to avoid processing fees for credit card transactions.

Cash receipts

Money received from a customer for the purchase of goods or services.

Category

A classification assigned to retail items. Categories are useful for grouping similar items for pricing and reporting purposes.

Category Killer

Category killer, as the name indicates, is a retail chain store that is very dominant in its product category. It has a vast selection of merchandise in its specific category and the prices are so low vis-à-vis competition that smaller retail outlets and chains find it difficult to compete.

Cell (Color/Size or Color/Size Combination)

The block in a retail apparel grid where a color and a size intersect.

Charge Back

A reversal of a credit card transaction, typically initiated by the card issuer at the cardholder's request. Charge backs can occur for any number of reasons, including customer disputes, potential or actual fraud (on the part of merchant, sales associate and/or customer), processing errors, and authorization issues. Merchants are typically assed fees for charge backs by the bank.

Chart of accounts

A list of all of a business's accounts in numerical order, usually grouped by type.

Check Guarantee

A service that guarantees a customer's payment by check for a specified amount. Point of sale merchants must typically follow standard check authorization procedures.

Check Verification

A service used to verify that a checkwriter and/or their checking account information is valid, and/or the account is in good standing.

Closing a drawer

The process of recording the ending amount of cash and other payment types in a drawer before performing end of day posting. Normally, a drawer is closed at the end of each day.

C.O.D. (Collect On Delivery)

A shipping method where the buyer pays for the purchase when goods are delivered.

Commission

The amount of money due to a sales rep when the sales rep makes a sale. Commissions can be based on an item's sales price, profit margin, etc.

Commissions due

The amount of money to be paid to a sales rep who is given credit for a particular sale.

Common Area Maintenance (CAM)

This is the amount of Additional Rent charged to the tenant, in addition to the Base Rent, to maintain the common areas of the property shared by the tenants and from which all tenants benefit. Examples include: snow removal, outdoor lighting, parking lot sweeping, insurance, property taxes, etc. Most often, this does not include any capital improvements that are made to the property.

Cost

• The amount you pay a vendor for merchandise.
• The derived value of an inventory item, calculated over the lifetime of the item.

Cost method

The process that determines the cost of each inventory item. Generally accepted methods of costing include average cost method, standard cost method, first-in, first-out method (FIFO), and last-in, first-out method (LIFO).

Cost of goods sold

Cost of merchandise less any discounts, but including transportation and alteration costs.

Cost of goods sold = merchandise – (discounts + transportation + alteration costs)

Counting a drawer

The process of recording the amount of cash and other payment types in a drawer. Normally, the drawer is counted at the end of each business day.

Credit

• The power or ability to obtain goods, services, or money in exchange for a promise to pay later.
• The right side of an account of any G/L account. Credits will normally be increases to liability accounts and decreases to asset accounts. They may also be increases to income accounts and decreases to expense accounts.

CRM - Customer Relationship Management

Customer Relationship Management (CRM) is a business strategy designed to reduce costs and increase profitability by strengthening customer loyalty.

Customer

An individual or organization that purchases goods and services from your company.

Customer Loyalty Program

A customer loyalty program is a structured and long-term marketing effort which provides incentives to repeat customers who demonstrate loyal buying behavior. Successful programs are designed to motivate customers in a business's target market to return often, make frequent purchases, and shun competitors. In retailing, these programs generally reward loyal customers with discounts, special offers, rebates, points, or prizes. An individual or organization that purchases goods and services from your company.

Cyber Monday

Refers to the Monday immediately following Black Friday, which marks the beginning of the Christmas shopping season for online retailers. In recent years, Cyber Monday has become one of the busiest days for online retailers.

D

Digital Signage

Signage that uses modern technology as against the traditional signage earlier used by retailers and brands. Digital signage is far more attractive, targeted and interactive than the traditional signage with static images and messages.

Discount

Represents a reduction in the price of an item.

Distributions

G/L accounting transactions created during posting.

Drawer

A physical container that stores money and other tender, including checks and credit card drafts, received at the point of sale.

Drawer fund

The amount of money left in a drawer after the drawer has been closed. The drawer fund is typically used to provide startup money (change) for the next business day.

Drop shipping

Drop shipping is the process in which a retailer markets a product, collects payment from the customer and then orders the item from a supplier, to be shipped directly that customer. The retailer's profit is the difference between the amount collected and the amount spent. No inventory is held and the retailer is not involved in the shipping.

E

E-Commerce

Conducting transactions through electronic means; selling products or services over the Internet. Any website that attempts to make a profit is involved in e-commerce.

EDI (Electronic Data Interchange)

Ability to electronically exchange purchasing information between your retail software and the vendor's system.

Employee discount

A reduction in selling price on merchandise sold to an employee.

End caps

The end pieces of display units typically used to display promotional items or featured items.

End-User

The person who uses a product that has been manufactured and marketed. Based on the idea that the “end goal” of a manufactured product is for it to be useful to the consumer.

Ending inventory

Merchandise on hand at the end of an accounting period.

Etailer

Merchants who sell retail goods or services through the Internet.

Related terms: internet retail, retail ecommerce, online retailing, ecommerce, e-retail, e-tail, and e-tailing

Exception reporting

Reporting that only includes information not meeting established criteria. For example, if you plan to sell between 2% and 5% of your inventory per week, then exception reporting would allow you to report on sales outside your criteria limits (e.g., sales that fell below 2% or rose above 5%).

Expenses

Costs of operating a retail business.

F

Facing

The number of similar products (or same SKU) facing out toward the customer. Facings are used in planograms and when zoning a retail store.

Finance charge

An amount charged to a customer's account because of past due invoices.

Fiscal year

Any accounting period that contains one of the following:

• 52 weeks
• 13 four-week periods
• Calendar year (Jan 1 - Dec 1)
• Any 12-month period

Flagship Store

Refers to a ship which is the largest, fastest, newest, most heavily armed, most well known, or the lead ship in a fleet. When applied to a particular retail store, the designation of "flagship" is given to a retailer's primary location, a store in a prominent location, a chain's largest store, the store that holds or sells the highest volume of merchandise, a retailer's most well-known location, a chain's first retail outlet, or the store location in a chain which carries the most high-priced merchandise catering to the most upscale customers.

F.O.B. (Freight On Board)

A shipping term indicating that freight charges are included to the specified destination.

Forecasting

Predicting the future, usually in sales or trends.

Frequent Shopper Program (Customer Loyalty Program)

Program designed to reward customers for their continued business, promote loyalty, increase visitation, and encourage future purchases. Rewards may be in the form of discounts, awards, or other perks.

G

GAAP (Generally Accepted Accounting Principles)

A set of financial accounting standards and reporting guidelines many retail business follow.

General Ledger (G/L)

• The collection of all balance sheet, income, and expense accounts used to keep a business's financial records.
• A software package that uses accounts to summarize a company's fiscal records.

Gift certificate

A voucher for goods or services that is sold to one customer with the expectation that it will be redeemed by another.

Gift receipt

proof of purchase which omits key information, including the price paid for the item. A gift receipt is provided by many retail stores to facilitate the easy return and exchange of products purchased. It provides the recipient of the merchandise the ability to comply with the store's "return with receipt" policy without immediately advertising how much the gift giver spent for the purchase.

Grid

A table or matrix of the available combinations of characteristics for an item, such as color, size, pattern, width, length, and so forth. Retail apparel grids are typically one-dimensional (e.g., color only or size only), two-dimensional (e.g., color/size), or three dimensional (e.g., color/size/pattern).

Grid cell

The intersection of two dimensions (e.g., color and size) in an item grid. Also referred to as a color/size combination, or simply color/size.

GMROI (Gross Margin Return On Investment)

A numerical indicator of the company’s return on its investment for an item or group of items. GMROI measures the profitability of a company.

GP% (Gross Profit %)

The gross profit divided by the price.

Gross profit (margin)

The difference between an item's price and cost.

H

Hang tag

Manufacturer's label describing the merchandise, or a hanging price tag used for apparel and similar merchandise.

Hardlines

A product line largely consisting of merchandise such as hardware, housewares, automotive, electronics, sporting goods, health and beauty aids or toys.

Horizontal Price Fixing

An agreement between two or more parties, generally considered to be competitors, to set, maintain, and charge a specified price for a particular product. This is considered to be a collusion to artificially set prices at a certain level, rather than allowing the free market to organically drive price levels. Horizontal Price Fixing is an unlawful practice in a free market because it is can stifle innovation, reduce GDP growth, artificially raise prices, create inefficiency, and possibly create a monopoly in which output is reduced and prices are raised.

I

Inventory

• Merchandise on-hand for sale to customers in the ordinary course of business.
• The value of merchandise on hand at cost or retail.

Inventory adjustments

An increase or decrease made to inventory to match an item's actual on-hand quantity. Adjustments are typically recorded to account for breakage, theft, loss, incorrect receivings, over shipments, and so forth.

Inventory cost

The actual or average value of on-hand merchandise.

Inventory turnover

Inventory turnover ("turns") is an important indicator of a retailer's success. It refers to the number of times average inventory on hand is sold and replaced during a given period of time.

Invoice

A document denoting money owed from one entity to another.

Issuer, Issuing Bank

The financial institution and member of Visa or MasterCard that holds contractual agreements with, and issues cards to, cardholders.

Item

A clearly identifiable product or service that may be sold to your customers.

J

Journal

Electronic record of transactions, including drawer activity, tickets, inventory adjustments, transfers, purchase requests, and receivings.

K

Keystone Markup

A markup equal to the cost of the merchandise. Retail price is determined by doubling the cost of an item.

Kit

A single inventory item that is constructed from other inventory items (components). For example, you might create a kit called "toolbox set" that includes a toolbox, a hammer, a wrench, and a screwdriver. You could then sell the toolbox set as a single item.

Kiosk

• A small leased area, booth, or cart inside a store or mall. Frequently an extension of a larger retail business.
• An interactive computer display used for gift registries, online shopping, merchandise location, or other electronic interactions between a shopper and a retail store.

L

Landed cost

The final cost per unit of items received into inventory.

Landed cost = (Purchase cost + freight cost + miscellaneous charges) / quantity received

Last cost

The cost of an item as of the most recent purchase of the item.

Layaway

A method of deferred payment in which merchandise is held for the customer until it is completely paid for. The customer makes periodic payments towards the price.

Leased Department

A department in a retail store -- usually a department, discount, or specialty store -- that is rented to an outside party.

Level II Purchase Cards

Purchase cards are Visa and MasterCard cards that look like normal credit cards, but are processed in a special way so that the cardholder (typically a large business or government agency) will receive additional information on the monthly statement regarding the type of goods or services purchased. Level II Purchase cards may also be referred to as Corporate cards, Business cards, or Commercial cards.

Line item

A single item on a ticket, order, or PO.

Line tax

The sales tax associated with a line item.

Location

A physical place where inventory is kept (i.e., a stocking location or warehouse).

Lot-controlled items

Items whose quantities are tracked by unique lot numbers within an item. Lot numbers are commonly used for chemicals, paints, dye-lots, and pharmaceuticals.

Loss leader

A pricing strategy where a particular item is sold below cost in an effort to stimulate other, more profitable sales. For example, during the Thanksgiving season, turkeys are frequently sold at pennies per pound in the hopes that the grocery store will profit from other groceries purchased at the same time.

Loss prevention

Stopping or reducing shrinkage inventory losses (or shrinkage) due to shoplifting, employee theft, paperwork errors, and breakage.

Loyalty

• Commitment to a particular store or brand.
• Program designed to reward customers for their continued business.

M

Management history

Historical daily summary figures for registers, categories, payments, sales reps, and taxes.

Margin (gross profit)

The difference between the cost of an item and its price.

Magnetic Ink Character Recognition (MICR)

The process of check authorization in which data on a check is read by a MICR device and transmitted to the retail software, which in turn sends the data to the check processor. MICR processing eliminates manual data entry and is less prone to errors.

Markdown

A reduction in the original retail price, primarily taken for clearance of broken merchandise, prior stock, or to meet competitor's pricing.

Marketing Calendar

Marketing calendar is a tool used not only by retailers but also other businesses. This tool shows which events are happening, in which location and on which dates.

Markup

Upward revision of the original retail price, resulting in a price higher than the original price.

Merchandise Mix

Merchandise mix also known as product assortment, indicates the total range of products carried by retailers.

Merchant agreement

A written contract between a merchant and the financial institution that details their respective rights, responsibilities, and warranties.

Minimum order

The smallest sale permitted by a manufacturer or wholesaler (vendor).

Miscellaneous charge

An additional charge that is not normally included in the price of an item, such as a fee for shipping or handling.

Magnetic Stripe Reader (MSR)

A device that converts the information contained in the magnetic stripe of a credit card into data that can be understood by retail software.

Merchandising

Buying and selling of goods.

Metrics

Measurements of data surrounding sales activities, resources, and/or deliverables.

Model stock

Represents the desired inventory stocking level of an item. The model stock is designed to assist in purchasing decisions and to ensure there is an adequate supply of merchandise is on hand.

Multiple-Pricing

Selling two or more of the same item at a unit price that is lower than the unit price of a single item. For example, $5.99 each or 2/$10.

Mystery Shopping

Mystery shopping indicates shoppers (generally hired by the senior management of a retail organization or a research company) who shop in a store/multiple stores ad record their experiences. The scores are then used for improvement of weak areas.

N

Net terms

Terms calling for the billed amount of the invoice with no discount allowed.

O

Opening a drawer

The process of recording the beginning amount of cash in a drawer before processing tickets. Normally, a drawer is opened at the start of each day.

On hand

Inventory that is physically present.

On order

Merchandise that has been ordered but not yet received.

Open item

• A type of customer whose account balance is determined by keeping individual document detail and applying payments to specific documents.
• A specific A/R document (e.g., an invoice, finance charge, debit memo, payment, etc.) showing an individual transaction that occurs for an open item customer.

Open-to-buy (OTB)

The dollar amount of merchandise that a retailer can order for a particular period.

Interim open-to-buy is calculated by deducting from the period’s planned purchases the amount of merchandise already received and the retail amount of purchase orders planned for delivery within the period.

Operating Expenses

Not a retail term, it is used in all businesses and indicates sum of all expenses used for running a business.

Order

A request or instruction to buy, sell, or supply goods or services.

Original markup

The initial markup on an item from cost to retail price.

Original retail price

The initial retail price at which merchandise is offered for sale.

Overage

• The amount by which a physical inventory exceeds book inventory.
• The amount by which the actual drawer amount exceeds the reconciled amount at the time the drawer is closed.

Overbought

The condition where a buyer has committed to purchases exceeding the planned purchase allotment for a merchandising period.

P

Packing slip

A contents list (or a copy of the invoice) included with a shipment.

PABP (Payment Application Best Practices)

Guidelines established by Visa to protect credit card data from fraud and misuse.

Payment

Money received from a customer to pay his or her bill. Payments may be made in the form of cash, checks, gift certificates, store credits, debit cards, credit cards, or company-specific A/R charge accounts.

Periodic inventory

A method of determining the value of retail merchandise at periodic intervals by performing a physical count of the items in stock.

Peripheral devices

Retail POS hardware devices used in conjunction with your retail point of sale workstation. Retail POS systems support a number of peripheral devices, including printers, cash drawers, barcode scanners, modems, card readers, check readers, customer displays, weight scales, and PIN pads.

Perpetual inventory

A method used by retail software packages to continually track and monitor the value of inventory and the quantity on hand adjusted for sales, returns, and receipts.

Physical count

The process of counting on-hand inventory. Also called "physical inventory," "periodic inventory" or "taking inventory."

Picking ticket

A list of items used for physically gathering items for shipment. Picking tickets typically include item and customer information, where the item is physically located (the bin), quantity ordered, and a place to write the actual quantity of the item being shipped.

Planned sales

Anticipated sales for a given period of time based on retail sales trends and planned increases over a period of time.

Planogram (POG)

A visual plan which designates the placement of products on a retail store's shelves and displays. The planogram is often delivered in the form of a diagram or drawing, and is usually created by a visual merchandising employee or the merchandising team.

Point-of-Purchase Display

Point of purchase (PoP) displays are promotion or advertising of a product at retail outlet. These PoP displays are generally used next to the products. The merchandise being promoted is usually displayed near the payment counter or near the entry of a store.

Point of Sale (POS)

The physical location at which goods or services are sold to customers. Also called point of purchase.

Price

The amount a customer would pay to buy a particular item from you, or what a customer actually paid for an item.

Pricing unit

The unit of measure by which an item is priced.

Price war

Cycle that begins when one retailers attempts to underprice another, and results in retailers continuing to lower prices in turn to undercut the other.

Prior stock

Stock that has been in a retailer's inventory for more than six months.

Private label

Private labels are also called store brand or house brand. A brand that is owned by the product's reseller rather than by its manufacturer. In rare instances, the reseller may be the manufacturer as well. They are often positioned as lower cost alternatives to regional, national or international brands, although recently some private label brands have been positioned as "premium" brands to compete with existing "name" brands.

The term is often associated with (1) advertised brand versus unadvertised brand (a private brand is most often unadvertised). However, the concept is changing and globally retailers have started advertising private labels too. and (2) national brand versus regional brand or local brand. Here as well, there are retail players that have taken their private labels national successfully.

Processing fees

Fees associated with processing credit card transactions.

Processor

A company responsible for processing payment transactions and is either operated by the acquirer or is acting on the acquirer's behalf.

Product depth

Product depth, also known as product assortment and merchandise depth, indicates total number of each item or particular style of a product available in a shop.

Product Life Cycle

Product life cycle (PLC) is all about stages a product goes through from the launch stage onwards. Four stages of PLC are introduction, growth, maturity and decline.

Product Mix

The combination of products offered for sale by a retail outlet, which takes into account both the variety and quantity of goods. The product mix is more than just inventory. It defines the retail outlet's niche in the market, and the personality of the brand. The product mix is often used to attract a certain demographic of shoppers to the store as well.

Profit center

• A distinct area within your company for which sales, expenses, and profits can be calculated separately from the total sales and expenses of the whole company
• A segment of the G/L account number used in generating distributions

Profit percentage

The difference between the cost of an item and its price, expressed as a percentage value.

Promotion

A special item price available for a limited period of time.

Purchase order (PO)

A record containing the details of an order for merchandise that has been placed with a vendor. Typically, the PO includes the items purchased, costs, discount terms, and shipping information.

Purchase request

An unapproved purchase order. A purchase request contains all the information that will go into a purchase order after the purchase request is approved.

Purge

To remove unnecessary records from your retail software.

Q

Quantity discount

A reduction in price based on the volume of the sale. More the customer buys, lesser the price per unit in case of quantity discount.

R

RBS Lynk (formerly Lynk)

A credit card processor owned by the Royal Bank of Scotland that's responsible for processing payment transactions.

Ready-To-Wear (RTW)

Clothing that is mass produced in standardized sizes and sold at retail stores in a finished condition is called "ready-to-wear" clothing. These clothes are intended to be worn without needing any significant alterations by the end-user. Ready-to-wear clothing is in contrast to clothing that is made-to-order, custom designed, individually fitted or one-of-a-kind, which is sometimes referred to as haute couture.

Receivables

Monies owed to a company by customers who have deferred payments.

Receiving

A document that details the receipt of merchandise ordered from a vendor.

Refund

Money or credit given to customer for the return of merchandise.

Regular price

Typically, the suggested retail price.

Relieve

To remove quantity from inventory due to an adjustment, sale, etc.

Retail POS System (Retail Point of Sale System)

A computerized system made up of retail software and point of sale hardware. Retail POS systems expedite point of sale checkouts, track merchandise performance, reorder items, identify sales trends, enable buyers to make better merchandising decisions, track customers and monitor loyalty, and report on historical sales activity.

Retail price

Typically, the highest price at which an item is sold.

Retail Method

An accounting method used to estimate the cost of ending inventory based on the cost of the goods available for sale relative to the retail price of the goods available for sale.

Retailer

An individual or company that sells goods and services directly to the consumer.

Retailing

The sale of goods to end users, not for resale, but for use and consumption by the purchaser. The retail transaction is at the end of the supply chain. Manufacturers sell large quantities of products to retailers, and retailers sell small quantities of those products to consumers. Retail shops may be on residential streets, shopping streets with few or no houses or in a shopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Online retailing, a type of electronic commerce used for business-to-consumer (B2C) transactions and mail order, are forms of non-shop retailing.

Return

A transaction in which a customer gives back a purchased item in exchange for the amount the customer paid for the item.

Return to vendor (RTV)

• The process of returning to a vendor any items that were previously received on a PO.
• A document authorizing the return of items to a vendor.

Revenue (sales)

Income produced by a company.

Reversal

When an acquirer successfully represents a chargeback to the issuer, the chargeback is reversed and the funds are returned to the merchant.

Rotating stock

Method of stocking new merchandise behind or in place of old merchandise.

S

Sale

A transaction in the retail software in which a customer exchanges an agreed amount for an item.

Sales floor

Sales floor is that part of the store where goods are displayed and sales transactions take place. To put it simply , the part of the store that is accessible to the end customers is known as sales floor.

Sales forecast

Estimate of future sales based on current sales figures and current information from manufacturers, wholesalers, accountants, and bankers.

Sales per square foot

Net sales divided by the square feet of retail selling space.

Sales rep

An employee for whom sales activity and commission information is tracked.

Sales tax

An additional charge levied on the sale of goods and services, usually calculated as a percentage of the purchase price. Sales taxes vary according to the taxable status of the merchandise and customer and can differ according to location.

Same store

Same store or comparable store ("comp"), is a store, or group of stores, open for a year or more. These are generally used for historical comparison purposes, because there is more than one year's data available to compare.

Seasonal merchandise

Merchandise purchased for a specific season that is only in demand for a short period of time (e.g., summer, Christmas, back to school, etc.).

Serial number

A number that identifies a unique unit of an item. Serial numbers are used to track specific items from acquisition to sale to history.

Serialized item

Items whose individual units are assigned unique serial numbers.

Settlement

The act of completing a credit card transaction.

Shoplifting

Shoplifting in retail terms means taking the merchandise offered for sale in a store without making a payment for it.

Shrinkage (Shrink)

The difference between actual stock and book records of stock. Shrinkage represents the aggregate of errors in stock record keeping, plus actual losses of merchandise through shoplifting, employee theft, paperwork errors, breakage, etc.

SKU (Stock Keeping Unit)

A number used to identify each unique item. SKU's are used in retail software to identify items and may be tied to the item's UPC or EAN barcode.

Softlines

A store department or product line primarily consisting of merchandise such as clothing, footwear, jewelry, linen and towels.

Special order

A type of order typically used for items not generally kept in stock, especially those ordered by you from your vendor for a particular customer.

SPIFF (Sales Promotion Incentive Fund or Sales Person Incentive Fund)

Cash, reward, or additional commission paid to sales clerks for increasing sales of a particular item or brand of merchandise.

Split dial

The capability of a point of sale card terminal to dial different phone numbers to obtain an authorization or settlement of different card types.

Statement (Customer statement)

A notice sent to a customer describing monies owed. Statements may include details of invoices, payments, credit memos, debit memos, and/or aging along with the current balance of the account.

Station

A retail point of sale workstation at which tickets and orders are entered and other cash register functions are performed.

Stocking unit

The unit of measure by which an item is kept (stocked) in inventory.

Store

A physical place at which retail business is conducted.

Store credit

A document that represents money owed to a customer by the merchant. A merchant normally issues a store credit (also called a "due bill") when a customer returns merchandise that is not eligible for a refund. Store credits can be redeemed (tendered) by the customer for future purchases.

Sub-category

A specific classification within an item category that further defines the characteristics of a group of items.

Subscription Service

A method of delivering periodic retail software updates that may include product updates, new features, and bug fixes. Subscription services typically have an annual fee.

SVC (Stored Value Card)

The most common type of gift card. Each card is uniquely numbered and represents a specific dollar amount. SVCs typically include a magnetic stripe encoded with a unique ID number allowing them to be processed with a standard MSR device. The "value" of each SVC is typically stored in a central database.

T

Tag

A physical label attached to merchandise for sale, such as an adhesive price tag, hang tag, or butterfly tag.

Target Market

A defined group of consumers whom the retailer attempts to satisfy with their products and services.

Tax

An amount levied on an item at the time of sale for the support of national, state, and/or local government.

Taxable amount

The per unit amount of an item’s price to which a tax can be applied.

Tearsheet

An actual copy of a retail advertisement.

TeleCheck

A check verification service for merchants designed to expedite the processing and handling of checks and reduce fraud.

Tender

Any form of payment that is offered to purchase goods or services.

Terms

A set of payment requirements for an invoice. For example, terms of 2/10, net 30 indicate that an invoice paid within 10 days receives a 2% discount; otherwise the undiscounted amount must be paid within 30 days.

Ticket

A transaction used for the sale or return of goods or services.

Ticket tax

The total tax amount for one ticket or order.

Ticket history

Detailed historical records of the tickets issued in the retail software.

Track 1/Track 2

Information stored on the magnetic stripe on the back of a card. Track 1 stores the cardholder's name, account number, and expiration date. Track 2 stores the account number and expiration date only.

Transaction

A completed record in the retail software that involves the exchange of goods, products, or services.

Transfer

A transaction that facilitates the movement of some quantity of items from one location to another.

Trunk show

Occasion where vendors present their merchandise directly to retail store owners, buyers, and/or customers.

Turn rate (Stock turnover rate)

A measure of how quickly your inventory sells. For example, a turn rate of 6 would indicate that you sell your merchandise quickly enough to replace it six times per year.

U

Unallocated

A purchase request or P.O. where the goods ordered are intended for delivery to a single location.

Uniform Resource Locator (URL)

A unique address that locates a specific resource on the Internet.

Unit

• A quantity of one
• A fixed quantity used as a standard for entering quantities in the retail software. For example, the stocking unit for an item might be 'each,' but you might receive an item from your vendor by the alternate unit 'case.'

UPC (Universal Product Code)

The standard for encoding a set of lines and spaces (or barcodes) that can be scanned and interpreted by retail software to identify a product.

V

Vendor

An individual or organization from which a retailer purchases merchandise for resale.

Visual merchandising

Visual merchandising is all about creating visual displays and arranging merchandise assortments within a store. The purpose is to increase foot traffic and sales by improving the layout and presentation and making it visually appealing. The stores increasingly focus on impulse purchase and ease of navigation for the customer while working on the visual merchandising aspect.

Vouchering

The process of creating an Accounts Payable voucher, or record of what is owed to a vendor, for items received from and invoiced by the vendor.

W

Warranty

A written guarantee of a manufacturer's or retailer's responsibility. A limited warranty provides specific conditions under which a manufacturer or retailer will repair or replace an item.

Wholesale

The resale of new and/or used goods to retailers, to industrial, commercial, institutional or professional users, or to other wholesalers. Wholesalers frequently physically assemble, sort and grade goods in large lots, break bulk, repack and redistribute in smaller lots.

X - Z

Year

An accounting period most often defined by the company’s fiscal year or as a calendar year (January 1 through December 31).