Retail POS Dictionary

The following glossary terms are frequently used in retail businesses, retail POS systems, retail inventory management systems, and accounting packages.

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 softwareto 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.

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.

Address Verification Service (AVS)

A service that reduces credit card fraud by verifying the cardholder's address information when the physical card isn't available to swipe through an MSR device (e.g., as with telephone orders). AVS processing doesn't affect whether the charge is approved. Instead, AVS indicates whether or not the address provided by the customer matches the address on file with the credit card company so that the merchant can decide whether or not to process the charge.

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.'

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.

Authorization code (Approval code)

A code typically consisting of numbers which is given when a credit card transaction is authorized.

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.

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.

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.

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."

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.

Card Acceptance Processing Network (CAPN)

American Express's Card Acceptance Processing Network (CAPN) initiative is system-wide expansion of the American Express credit card processing system. CAPN enhances point of sale security, supports expanded amounts, and adds a transaction lifecycle identifier for all American Express transactions. CAPN-compliance is mandatory for all US processors.

Card Verification Value (CVV) or Card Validation Code (CVC)

Often represented as CVV2/CVC2, this safety feature provides consumers with added credit card transaction security by requiring additional three or four non-embossed numbers that are only located on the actual credit card. CVV2/CVC2 processing does not affect whether the charge is approved, but it does reduce credit card fraud when the physical card isn't available to swipe through an MSR device (e.g., as with telephone orders).

This system is referred to as CVV2 by Visa (three digit code on back of card), CVC2 by MasterCard (three digit code on back of card), and CID by American Express (four digit code on front of card).

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.

Cell (Color/Size or Color/Size Combination)

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

Certegy (formerly Equifax)

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

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.

Commit

To allocate (commit) inventory to a transaction (e.g., an open order, ticket, adjustment, etc.).

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.

Customer

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

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-ship

Refers to an item that will be shipped directly from your supplier to your customer.

DUKPT (Derived Unique Key Per Transaction)

A method of PIN pad encryption.

Dun

A demand for payment of a bill or account.

E

EBT (Electronic Benefit Transfer)

An electronic system that allows recipients to receive government benefits (e.g., food stamps) by means of a debit card. Retailers can only accept EBT cards for food items that have been authorized by the USDA’s Food Stamp program

EDC (Electronic Draft Capture)

An automatic method of authorizing, balancing, and settling credit card transactions entered in your retail software package.

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.

Encryption

The technique of automatically scrambling credit card data in the point of sale system before the data is transmitted. Used for security and anti-fraud purposes.

End caps

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

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

FDMS North, First Data North (formerly CES)

A credit card processor responsible for processing payment transactions.

FDMS South, First Data South (formerly NaBANCO)

A credit card processor responsible for processing payment transactions, particularly well-suited for processing transactions in the Caribbean and Latin America.

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

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.

Form feed

The capability of most printers to automatically feed perforated fixed-size rolls of paper to the top of the next page.

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.

Gateway, Internet Gateway

Manages the electronic connection between consumers and financial institutions, and transmits data. An Internet Gateway that processes credit cards is a gateway connection between the point of sale system and the credit card processors.

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

A receipt without prices that allows for easy exchanges of a gift. Gift receipts act as proof of purchase for the gift recipient and allow the purchaser of the gift to keep the original detailed receipt for his or her own records.

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.

I

Industry Type

Determines the retailer's processing rate for credit card transactions:

• Retail: Offers the best processing rates for card swipe ("card present") transactions. Supports AVS and debit card processing.
• Mail-order/Telephone-order (MOTO): Transactions presumed to be "card not present" (no card swipe). Supports AVS and CVV2/CVC2/CID.
• Ecommerce: Transactions presumed to be from a website or other secure electronic source (no card swipe). Supports AVS and CVV2/CVC2/CID

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.

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.

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.

Markup

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

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.

MOTO (Mail-order/Telephone-order)

See Industry Type.

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.

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.

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.

Password

A word or string of characters assigned to a specific clerk that allows access to the retail software.

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.

PCI DSS (Payment Card Industry Data Security Standards)

Data Security Standards (DSS) is a strict set of guidelines designed to protect credit card data from fraud and misuse. DSS guidelines are established and maintained by the PCI Security Standards Council.

PCI DSS may also be referred to as CISP. The Cardholder Information Security Program (CISP) and Payment Application Best Practices (PABP) are guidelines established by Visa to protect credit card data from fraud and misuse.

Period

A specified contiguous interval of time, such as a week or a month.

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.

PIN (Personal Identification Number)

The individual number or code used by a cardholder to authenticate card ownership for point of sale debit transactions.

Planned sales

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

Planogram

Schematic drawings of retail store fixtures that illustrate product placement.

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.

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.

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.

PVV (PIN Verification Value)

The value encoded in the magnetic stripe on the back of a payment card.

Q

Quantity discount

A reduction in price based on the volume of the sale.

R

RBS Lynk (formerly Lynk)

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

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.

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.

Relieve

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

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 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.

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.

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. SKUs are used in retail software to identify items and may be tied to the item's UPC or EAN barcode.

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.

TSYS (formerly Vital, formerly VisaNet)

A credit card processor responsible for processing payment transactions.

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.

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.

Workstation

The computer used to run a retail software package.

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).