Retail discounts

Important

This topic applies to Dynamics 365 for Retail and Dynamics 365 for Finance and Operations.

Overview

This topic provides an overview of the discounts functionality in the Dynamics 365 for Retail. It explains the properties found on the various discount forms, and best practices for discount management. However, this topic does not cover the various discounts types in detail, for example, simple, quantity, mix and match, and threshold discounts. These details will be covered in separate topics created for each of these discount types.

Because retailers require flexible discounting, and discount styles and types vary by retail industry, there are many ways to define discounts in Dynamics 365 for Retail. The discounting functionality in Retail was added on top of the existing discount functionality in the core product (Supply Chain Management), resulting in some duplication of functionality. As a result, the discount types can be configured for five different entities: customer, loyalty program, channel, catalog, and affiliations. Because of the number of discounting options, it's especially important that you plan and document your discounting strategy.

Creating discounts

Each discount type has a dedicated page that you use to create and manage the discount. Dynamics 365 for Retail also has an All discounts page and a Pricing and discounts management workspace, both of which you can use to create a new discount of any type.

Discount headers and discount lines

All retail discounts in Dynamics 365 for Retail have a header and one or more lines. All discount types have properties defined on the header and some discount types have additional properties defined per line. For example, quantity discounts have quantity tiers. People often think about discounts in Dynamics 365 for Retail in terms of the discount header only and assume that all the lines on the discount are related to each other because they share a discount header. However, this view of retail discounts is too simplistic. For simple discounts and quantity discounts, it is more accurate to think of each discount line as an independent discount that shares some properties with the other discount lines. In fact, the retail pricing engine evaluates simple and quantity discounts in just this manner. Each discount line for simple discounts and quantity discounts is independent. For simple discounts, it is easy to understand that each discount line is independent of all other discount lines on the same discount, because there isn't a quantity or amount criterion required to qualify for the discount. For quantity discounts, you might think that the lines can be combined to reach the quantity criterion for a discount, but they don't. The quantity tiers must be reached independently for each line of a quantity discount.

When you create discounts, we recommend that you always avoid or minimize overlapping discount lines. Overlapping discount lines occur when two or more discount lines in the same discount can be applied to the same product. In this case, the retail pricing engine must treat the discount as two or more independent discounts that must then be evaluated against each other to find the best discount amount. In addition, it can be difficult for a user to know what the discount will be just by looking at the discount definition.

Managing discounts

Settings and options that are common to all retail discounts

This section describes the properties that are common to all types of retail discounts.

When you manage retail discounts, it's important that you understand each discount option individually, but it is equally important that you understand which options affect each other and how. The common settings for discounts fall into two categories. In the first category are settings that filter discounts for consideration. Examples include Status, Currency, and Unit of measure. Settings in the second category control the order in which multiple discounts are considered and applied. Examples include Discount concurrency mode and Pricing priority. The following image shows the various properties of a discount.

Discount properties

Discount ID

This field is labeled Discount and holds a unique ID for each discount. It's set when you first create a discount and can't be changed later. In Retail parameters, you can set up independent number sequences for each type of discount. In this case, make sure that the number sequences won't collide. For example, you can use a unique prefix for each discount type. For example, D for discount, Q for quantity, MM for mix and match, and T for threshold.

Discount name

This field is a short free text field that is used to describe the discount. The string value in this field is shown in the MPOS and CPOS cart line and printed on Retail Modern Point of Sale (MPOS) and Cloud POS (CPOS) customer receipts. Therefore, your cashiers and end customers will see this description. It is the primary means for MPOS/CPOS users and customers to know which discount was applied.

Discount type

There are four types of retail discounts in Dynamics 365 for Retail: Discount, Quantity, Mix and match, and Threshold. The discount type is set when you first create a discount and can't be changed later. The discount type determines whether there is a quantity or amount criterion that must be met to qualify for the discount.

Status

The status of a discount can be either Enabled or Disabled. When you first create a discount, the status is Disabled. Discounts can only be edited when they are disabled. When discount data is pushed to a channel, disabled discounts are not pushed. If a discount was previously enabled and pushed to the channel, then this new push will also remove the discount from the channel. When you change the status to Enabled, various validation checks are performed on the discount, depending on the type of discount. The list of validation checks has increased in recent updates of the product to prevent incomplete or poorly defined discounts from being pushed to retail channels. Here is a partial list of the validations that are performed when you enable a discount:

  • A discount must have at least one discount line.
  • The percentage value for a percentage discount must be more than 0 (zero) and less than or equal to 100.
  • The amount value for an amount discount must be more than 0 (zero). Zero and negative amounts aren't valid.
  • A discount must have at least one price group. A discount that doesn't have a price group will never be applied to a transaction.
  • A Unit of measure (UoM) is required for quantity and mix-and-match discount lines.
  • For quantity discounts that have two or more quantity tiers, the discount value is validated to increase as quantities increase.
  • For threshold discounts that have two or more threshold tiers, the discount value for each tier must be equal to or more than the largest discount of the previous tier.
  • For mix-and-match least-expensive discounts, the number of least-expensive products must be more than 1 and less than the number of products that are required to trigger the discount.

Currency

The currency of a discount defines the currency of all amount and price fields on the discount. Different discount types have different field options. The currency also acts as a filter during discount calculation. In Dynamics 365 for Retail, all sales order and MPOS/CPOS transactions have a currency, and the retail pricing engine will consider only discounts that have the same currency.

Discount concurrency mode

This determines which discounts compete on a transaction, and which discounts are compounded together. The three values for this option are Exclusive, Best price, and Compound.

When the value is Exclusive or Best price, only one discount can be applied to a transaction line. The only difference between Exclusive and Best price is the order that the discounts are considered and applied in. Exclusive discounts are always evaluated and applied before Best price and Compound discounts, if all other settings are the same. Therefore, Exclusive and Best price discount never compete for the best price. Two or more Exclusive discounts will compete for the best price, as will two or more Best price discounts.

When the value is Compound, the discount can be compounded with any other discount that is also set to Compound. Therefore, two or more Compound discounts will all be applied to a transaction line. When multiple Compound discounts are applied to a transaction line, they are applied in the following order:

  1. Discount price discounts
  2. Amount-off discounts
  3. Percentage-off discounts

Compound discounts compete with Best price discounts when both types apply to a transaction line. Therefore, the Compound setting is used to determine which discounts are combined. Depending on the discount concurrency control mode used, two or more Compound discounts can be combined and compete with the Best price discounts that apply to the same products. The discount or discounts that have the largest total discount amount are applied.

Discount account

Dynamics 365 for Retail lets you post discount amounts for a transaction to a separate general ledger (GL) account. The discount GL account is set by the product or customer. Dynamics 365 for Retail offers a unique way to separate the discount amounts during posting. You can post each type of discount to a specific GL account. Both options can make it easier for you to determine which discounts or discount types are being used in your general ledger.

Note

When the retail discount account posting feature is enabled, then an additional debit entry and credit entry are made to reclassify the discount posting out of the Dynamics 365 for Retail discount GL account and into the retail discount GL account.

Coupon code required

Starting with Dynamics 365 for Retail version 7.2, the call center coupons are now merged with retail discounts. For a discount, when Coupon code required is set to Yes, the Status field and the standard date fields, Effective date and Expiration date, are not available. These properties are controlled by equivalent properties that are on the Coupons page.

When Coupon code required is set to Yes on a discount, the discount is applied to a transaction only if the coupon code or bar code is provided by MPOS/CPOS. The values of the coupon codes and bar codes are defined and configured in a separate page named Coupons. The Coupons page is where the coupon is linked to the discount. When Coupon code required is set to No, a coupon code isn't required, and the discount will always be applied through its price groups.

Override priority and Pricing priority

These two fields work together. When Override priority is set to Yes , the Pricing priority field becomes available for editing. You can then select a pricing priority to set directly on the discount. When Override priority is set to No , the priority is inherited from the priority of the price group associated with the discount. In the case of multiple price groups association, the priority number is determined by selecting the highest pricing priority of all the price groups associated with the discount.

Description

This field is a free-form text field. It isn't used in the MPOS/CPOS system or in transactions.

Disclaimer

This is a free-form text field. It isn't used in the MPOS/CPOS system or in transactions.

Line type

This field is on all discount lines. The possible values are Include and Exclude. This field is used in combination with the Category, Product, and Variant fields to define the set of products that the discount is applied to. Exclude discount lines always override include discount lines. When Line type is Exclude many of the other fields on the discount line are grayed out, as they do not apply.

Unit of measure

Unit of measure (UoM) is a field on all discount lines except threshold discount lines. This field is label Unit in Dynamics 365 for Retail. The Unit of measure field acts as a filter to determine whether a discount should be applied to a transaction line. The UoM on the transaction line must match the UoM on the discount line. Otherwise, the discount line isn't considered during discount calculation. No UoM conversion is done during discount calculation.

Category, product, variant, and dimensions

Category, Product, Variant, and dimensions are the last discount settings that are common to all retail discounts. These fields are set on each discount line and specify what is being discounted. They act as a filter when the retail pricing engine searches for discounts that can be applied to a transaction. These fields are related to each other according to these rules – categories contain products, and products can come in different variations of size, color, style, and configuration.

The retail pricing engine does not use the parent/child relationships of categories, products, and variants to order retail discounts during discount calculation. This behavior differs from the way that the retail pricing engine handles sales price trade agreements. For example, both a discount for 10 percent on a category and a discount for 5 percent on a product in the same category will be considered. The larger of the two discount amounts will then be used, provided that all other properties are the same and the discounts aren't set to Compound, in which they both will be combined. If you want to force a product discount to be used over a category discount you can use pricing priority or the discount's concurrence mode to cause one discount to be applied before another.

When you edit discounts, the Category, Product, Variant, and Dimensions settings act as filters for each other. The Category and Product fields are automatically set from the Retail Category Hierarchy if a product or variant is entered directly. The following sections provide detailed descriptions of each of these fields.

Category

At a minimum, you must set the Category field. You can select any category from the retail product category hierarchy or any category from a supplemental category hierarchy. However, you can't select categories from channel navigation hierarchies or other non-retail hierarchies. If only a category is specified on a discount line, the discount will be applied to any product in that category, even products that are added to the category after the discount has been created, provided that all other discount criteria are met, such as currency and UoM.

Note

The category that you select on a discount line is hierarchy specific. Therefore, you can't specify a value by typing a partial value in the field, as you can in most Dynamics 365 for Retail fields. If you type in a full category name, the drop-down list will expand, and that category will be selected. In addition, you can press Alt+Down arrow to expand the selection dialog box and then press Tab to move between the hierarchy selection and hierarchy tree within the drop-down list, so that you can use the field without using a mouse.

The capability to work with categories is a key differentiator between retail discounts and trade agreement discounts, and the main reason that we discourage you from using trade agreement discounts. Categories are organized in a multi-level hierarchy. By contrast, the item discount groups that are used by trade agreements are only a single level of grouping, and each group is specific to one of the three trade agreement discount types, such as Line discount, Multiline discount, and Total discount. Therefore, for trade agreements, if you want to use the same set of products in all three trade agreement discount types, you must create and manage three independent discount groups. However, for retail discounts, you must maintain only one category. You can then use that category in all four retail discount types. You can also use the same category in price adjustments, assortment management, and loyalty management.

Product

The product can be a released product or a released product master. All retail discounts are company specific. Therefore, they work only with released products. If you select a product master, the discount will be applied to all variants of the product, even variants that are released after the discount is created, provided that all other discount criteria are met, such as currency and UoM.

Variant

When you select a variant on a discount line, the discount will be applied to just that variant, provided that all other discount criteria are met, such as currency and UoM.

Dimensions

Starting with the Dynamics 365 for Retail 8.1.1 release, we have added the capability to set up discounts at a dimension level for a product. This provides the flexibility to choose one or more dimensions of a product as discount lines. This saves the merchandizing manager from individually adding the variants on which the discounts apply. For example, you can specify a discount on all variants with a specific style or you can specify a discount on all variants that are of a specific color and style.

Note

The capability to set up promotions based on dimensions is not supported for price adjustments. The specific interface for defining the dimensions are removed in Retail versions 10.0.4 and later.

Best practices

  • Before you create discounts, document your discounting strategy and procedure. Keep your documentation up to date as your use of the product evolves.
  • Use independent number sequences for each discount type and configure the number sequences so that the discount ID by itself indicates the discount type. For example, prefix the ID of each discount type with a different alphanumeric constant: Q for quantity, MM for mix and match, and so on.
  • Test your discount configuration using the price simulator before you enable discounts. The price simulator has an option that lets you treat disabled discounts as enabled. This option was designed specifically for testing discounts before they are enabled.
  • Expire discounts when they are no longer valid. In this way, you prevent the total number of discounts that the retail pricing engine considers during a transaction from growing unbounded. Otherwise, the performance of discount calculation can be affected over time.
  • Leverage the supplemental categories to group the products, for example clearance products or last season products.
  • Always avoid or minimize overlapping discount lines.