Deduction Library / Markdowns
Markdowns
MABD — Must Arrive By Date — is the date on the purchase order by which product must reach the retailer’s facility. A MABD deduction is a penalty or a related claim when the shipment misses that date. It is related to OTIF, but it is not the same thing. OTIF is a performance score. MABD is a date on a PO.
Why Retailers Assess It
When an item will not sell at the current price, the retailer protects margin by lowering the price and seeking support from the supplier. Many supplier agreements include programs for seasonal, end-of-life, and inventory-flush activity. The deduction is how that support is collected.
How to Validate
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Find the agreement that authorizes markdown support for that item and period.
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Confirm units on hand versus units the retailer deducted against.
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Check whether the markdown was retailer-initiated, mutually agreed, or applied from a standing policy.
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Separate a markdown from a rollback, a promotional allowance, or a defective claim using the same dollars.
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Verify timing. Support taken after the product has already sold through is a different claim than support on remaining inventory.
Documents You Typically Need
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Markdown or clearance agreement
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Item list, stores or banners, and dates
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Inventory position used to calculate the claim
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Invoice or debit-memo detail
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Prior cost and retail if the math depends on a difference
* Additional documents may be needed depending on the retailer and claim type.
Common Causes
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Markdown or clearance agreement
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Item list, stores or banners, and dates
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Inventory position used to calculate the claim
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Invoice or debit memo detail
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Prior cost and retail if the math depends on a difference
Recovery Notes
Markdowns need a paper trail of who asked for the support and on how many units. “The item was slow” is not authorization. If the supplier did agree, confirm the math before the claim is treated as closed.
Related types: Rollbacks, Allowances, Pricing.
Related service: Retail Deduction Recovery