Guide
How to stop staff giving too much discount in a clothing shop
How do I stop my staff from giving too much discount?
Write down your cost for each item, set a lowest price staff may sell at (for example cost + 20%), put a limit on the bill discount staff can give, and make anything below that need your approval. Then check every week how much discount each staff member gave. A billing app with a lowest price and an owner PIN, such as Tap & Bill’s Mol-Bhav Guard, does the checking at the counter so you don’t have to watch every bill.
Why discounts leak in a clothing shop
In most Indian clothing shops the tag price is where the bargaining starts. That is normal, and a good salesman uses it well. The trouble is that the owner can’t stand at the counter all day, and a bill only shows the final price. Nobody sees that the jeans that cost you ₹700 went for ₹650 to close a sale on a busy Sunday.
- New staff don’t know your cost, so they don’t know where the loss starts.
- Staff paid on sales want to close the sale, not protect the margin.
- A bill discount spreads the loss over the whole bill, so it is harder to notice than a low rate.
- At rush hour nobody checks; at month end the profit is simply lower and nobody knows why.
Small amounts add up. If one salesman gives ₹100 more than needed on 10 bills a day, that is ₹1,000 a day, or about ₹30,000 in a 30-day month, straight out of your profit.
The old way: a cost code on the price tag
Many shops write the cost on the tag in a secret code: a 10-letter word with no repeated letter stands for the digits 1 to 0. A common one is BLACKHORSE:
B = 1 · L = 2 · A = 3 · C = 4 · K = 5 · H = 6 · O = 7 · R = 8 · S = 9 · E = 0
A tag reading “₹1,199 · OEE” tells the salesman the cost is ₹700. It is clever and free, but it has gaps:
- Every new staff member has to be taught the code, and once they know it, they know your cost.
- It shows the cost, not how low the salesman may actually go.
- It is only on the tag. Once the bill is made, nothing checks the price.
- The owner still can’t see who gave how much discount.
Step 1: Know your cost for each item
Take the cost from your purchase bills. Clothing shops rarely need a cost for every design: if you bill by item type (Jeans, Kurti, Shirt), one cost per type is enough. Where one type has very different pieces, such as regular and premium jeans, keep them as two items with two costs.
Step 2: Set a lowest price for each item
The lowest price is the least you will accept for one piece. A simple start is cost + a margin you are happy with, rounded to a price that looks normal:
| Item | Cost | Tag price | Cost + 20% | Lowest price | Room to bargain |
|---|---|---|---|---|---|
| Jeans | ₹700 | ₹1,199 | ₹840 | ₹850 | ₹349 |
| Kurti | ₹400 | ₹799 | ₹480 | ₹499 | ₹300 |
| Shirt | ₹450 | ₹799 | ₹540 | ₹550 | ₹249 |
| Saree | ₹1,500 | ₹2,999 | ₹1,800 | ₹1,800 | ₹1,199 |
The room to bargain is what your staff can play with. If it is very small, your tag price may be too low; if staff keep hitting the lowest price, it may be set too high for your market. Use your own margin: 20% here is only an example.
Step 3: Put a limit on the bill discount
A low rate on one item is easy to see. A big discount on the whole bill is not. Decide the most discount staff may give on a bill, for example 10%, and treat anything above it like a price below the lowest price.
Also check each piece after its share of the bill discount. On a ₹1,600 bill (jeans ₹950 + shirt ₹650), a ₹240 discount takes ₹142.50 off the jeans, which then sells for ₹807.50, below a ₹850 lowest price, even though the rate on the bill said ₹950.
Step 4: Decide who can go below
Sometimes you do want to go below: a loyal customer, a last piece, end-of-season stock. Make it the owner’s decision, not the counter’s. The usual choices:
| Rule | How it works | Good for |
|---|---|---|
| Warning only | Staff see a warning, the bill goes through, and the owner sees it later | Trusted staff; the first weeks while you learn how often it happens |
| Owner approval | The bill goes through only after the owner says yes (in an app, a PIN typed at the counter) | New staff, sale season, busy days |
| Sale period | Lower the lowest price of the items on sale for those days, then put it back | Clearance and festival sales |
Step 5: Check every week who gave what
Fifteen minutes once a week is enough. Look at:
- Discount given by each staff member, in ₹ and as a % of their sales. One person far above the others is worth a conversation.
- Every bill that went below a lowest price: who made it, which item, and whether you approved it.
- Items that keep showing up below the lowest price: the lowest price may be wrong, or that item needs a lower tag.
- Profit on items with a cost price. If it drops week on week, discounts are a good first place to look.
Tell staff the rules and why they exist. Most staff give too much discount to close the sale, not to cheat, and a clear lowest price makes their job easier: they know exactly how far they can go.
Doing it in Tap & Bill
Tap & Bill’s Mol-Bhav Guard does steps 2 to 5 at the counter, in the Android app and on the computer:
Enter lowest prices and costs
On Prices & categories, add a lowest price for each item and, if you like, your cost. Staff never see the cost.
Choose how strict
Settings → Mol-Bhav Guard: Off, Warn staff, or Ask for my PIN, with your 4 to 6 digit PIN and a staff discount limit %. Optional: a minimum margin, so the lowest price follows your cost.
Staff bill as usual
Below the lowest price they see, for example, “Jeans ₹750 is below the lowest price ₹850”. You type your PIN to allow it, or they change the price.
Check the report
The owner’s Overview shows each staff member’s bills, discount given and sales below the lowest price, and profit on items with a cost price.
Bills you make on the owner login are never stopped. Today the PIN is typed on the counter phone or computer; approving from your own phone is planned. In the Android app, bills made offline are never lost: if one breaks the rule without your PIN, it is marked “not approved” in your report.