What is retail markdown?

Point of Sale (POS) Glossary

A markdown is a reduction in an item’s selling price. A retailer may offer a markdown due to difficulty selling an item at its regular price because a season is ending, an item is no longer trendy, inventory space is low and other reasons.

Markdowns are not the same as sales as they tend to be permanent reductions. They may be quantified by percentage amounts. For instance, a 40% markdown on a $100 item would result in a $60 selling price. Because markdowns may be on closeout merchandise and offer deep discounts, they may carry conditions such as making all sales final.

A point of sale system can be programmed to accommodate markdowns. A store may designate specific SKUs, so at checkout, the POS applies the discount and other terms of the sale specific to that item.