Checklist template

Employee discount and markdown abuse controls for fashion retailers

A ready-to-use checklist with 112 items in 6 sections, covering Employee purchases, Discount use, Markdowns, Holds, Reports, Follow-up. Use it as-is in Bindy, or adapt it to your own standards in minutes.

  • 6 Sections
  • 112 Items
  • 92 Yes / No checks
  • 6 Scored ratings
  • 122 Points

Use this template How audits work

1. Employee purchases 16 items

  1. Employee purchases entered in the purchase log in the last 30 days Number
  2. Employee purchases checked against their receipts during the visit Number
  3. Every employee purchase is entered in the purchase log with the date, the style, the price paid and the manager who rang it Yes / No 1 pt
  4. No transaction in the last week shows the same employee number as cashier and as purchaser Yes / No 1 pt
  5. Clothing from the store worn on shift was bought before it was worn, as shown by a receipt or the purchase log Yes / No 1 pt
  6. Garments issued under the wardrobe allowance are recorded per employee and per season Yes / No 1 pt
  7. No employee has received more wardrobe allowance garments this season than company policy grants Yes / No 1 pt
  8. Wardrobe allowance garments are not accepted back for a refund Yes / No 1 pt
  9. Employees buy new arrivals only after the waiting period or launch date set by company policy Yes / No 1 pt
  10. Employee purchases of limited releases (collaborations, limited-edition sneakers) follow the release rules sent by head office Yes / No 1 pt
  11. Employees do not buy the last unit of a size on the first day of a markdown where company policy forbids it Yes / No 1 pt
  12. The receipt of an employee purchase shows the discounted price paid, so a return refunds that amount Yes / No 1 pt
  13. Security tags on an employee purchase are removed at the register during the sale, not in the stockroom Yes / No 1 pt
  14. Alterations or hemming on employee purchases are charged at the rate in company policy, not done free Yes / No 1 pt
  15. Garments taken off mannequins at a floor set are sold to employees only at the price set by head office, not marked down in the store Yes / No 1 pt
  16. Control of employee purchases Rating
    • Logged, rung by a manager and checked at exit 5 pts
    • Logged with gaps 3 pts
    • Not logged or self-rung 1 pt

2. Discount use 21 items

  1. Manual discounts in the last week (% of transactions) Number
  2. The discount rate applied at the register matches the employee's entitlement (full-time, part-time, seasonal) Yes / No 1 pt
  3. The register applies the employee discount only to the categories the policy covers (for example, not to licensed brands or beauty) Yes / No 1 pt
  4. An employee asked could state whether the employee discount applies to clearance merchandise Yes / No 1 pt
  5. The employee is present at the register when a family member uses the discount, where company policy requires it Yes / No 1 pt
  6. Discounted purchases are paid by the employee or the eligible family member, not with a third party's card Yes / No 1 pt
  7. Each employee's discounted spending is tracked against the cap per period set by company policy Yes / No 1 pt
  8. No employee exceeded the discount cap in the last period Yes / No 1 pt
  9. Repeated purchases of the same style and size by one employee were questioned as possible resale Yes / No 1 pt
  10. The employee discount is not applied to gift cards Yes / No 1 pt
  11. The employee discount is not applied on top of a friends-and-family pass in the same transaction Yes / No 1 pt
  12. Friends-and-family passes were issued in the quantity per employee that company policy grants Yes / No 1 pt
  13. The issue of friends-and-family passes is logged by employee Yes / No 1 pt
  14. Friends-and-family passes are collected or voided at the register when redeemed Yes / No 1 pt
  15. An employee visiting from another store is verified in the system before the discount is given Yes / No 1 pt
  16. A courtesy discount given to a client by a stylist or associate carries a manager's approval and a reason Yes / No 1 pt
  17. A flaw discount (missing button, makeup mark, pulled thread) is given only after a manager has seen the flaw at the register Yes / No 1 pt
  18. Single-use promotion codes are voided after use and are not kept at the register Yes / No 1 pt
  19. Loyalty reward certificates left behind by customers are not applied to employee purchases Yes / No 1 pt
  20. A price adjustment on an employee purchase follows the customer policy and is approved by a manager Yes / No 1 pt
  21. Control of discount use Rating
    • Every discount traceable to an entitled person 5 pts
    • Some manual or unapproved discounts 3 pts
    • Discounts given freely or not traceable 1 pt

3. Markdowns 21 items

  1. Clearance items scanned at a register during the visit Number
  2. Clearance items scanned that rang at a price different from the ticket Number
  3. Markdowns on the floor come from the head office price change list Yes / No 1 pt
  4. No style was re-ticketed before the effective date of its markdown Yes / No 1 pt
  5. The list of upcoming markdowns is seen only by managers until the effective date Yes / No 1 pt
  6. Markdown tickets are printed from the handheld with the style number, not written by hand Yes / No 1 pt
  7. A handwritten price on a ticket is not accepted at the register without a manager's check of the price file Yes / No 1 pt
  8. Markdown label printers and red-line pens are locked up when not in use Yes / No 1 pt
  9. Replacement price tickets are printed only by employees authorized to do so Yes / No 1 pt
  10. Each store-level markdown (damage, soiled, last unit) carries a manager's approval Yes / No 1 pt
  11. Each store-level markdown carries a reason code Yes / No 1 pt
  12. Store-level markdowns stay within the percentage limit set by company policy Yes / No 1 pt
  13. Store-level markdowns of the last 30 days were compared with employee purchases of the same styles Yes / No 1 pt
  14. The damage on a garment marked "as is" can be seen and is noted on the ticket Yes / No 1 pt
  15. In a sample of 10 garments on the clearance racks, no clearance ticket was on a full-price style Yes / No 1 pt
  16. Styles marked down to zero or to a pull price were removed from the floor, not sold Yes / No 1 pt
  17. The register refuses a price below the price file without a manager's code Yes / No 1 pt
  18. Garments marked out of stock as damaged are destroyed, donated or returned to the vendor as company policy states Yes / No 1 pt
  19. The disposal of marked-out-of-stock garments is witnessed by a second employee Yes / No 1 pt
  20. End-of-season sample or employee sales took place only with head office approval and a price list Yes / No 1 pt
  21. Integrity of markdowns Rating
    • All markdowns from the price file or approved with a reason 5 pts
    • Some store-level markdowns unapproved 3 pts
    • Early, handwritten or unexplained markdowns 1 pt

4. Holds 20 items

  1. Holds on the hold rack at the time of the visit Number
  2. Holds on the rack past the hold period set by company policy Number
  3. Customer holds are kept in the designated hold area at the cash wrap Yes / No 1 pt
  4. Each hold carries a tag with the customer's name, a phone number, the date and the associate's name Yes / No 1 pt
  5. Expired holds were returned to the sales floor at opening today Yes / No 1 pt
  6. Employee holds are kept apart from customer holds Yes / No 1 pt
  7. Each employee hold is initialed by a manager Yes / No 1 pt
  8. The number of employee holds per person is within the limit set by company policy Yes / No 1 pt
  9. No employee hold was placed in the days before a scheduled markdown on a style included in that markdown Yes / No 1 pt
  10. A search of the stockroom found no merchandise set aside in unmarked bags or boxes Yes / No 1 pt
  11. A search under the cash wrap found no untagged holds Yes / No 1 pt
  12. No garment was found hidden behind fixtures or hung in the wrong size section to keep it from customers Yes / No 1 pt
  13. The last sizes of key styles are on the sales floor, not held back for employees Yes / No 1 pt
  14. Pre-sale holds for a sale event exist only where head office authorized the pre-sale Yes / No 1 pt
  15. Pre-sale transactions are rung on the event date at the event price Yes / No 1 pt
  16. Limited-release items are not held for employees or their friends Yes / No 1 pt
  17. Online order picks are kept apart from holds and labeled with the order number Yes / No 1 pt
  18. Holds for a customer of another store (charge-send) carry the paperwork of the request Yes / No 1 pt
  19. A manager reviews the hold rack every day and initials the hold tags or the hold log Yes / No 1 pt
  20. Control of holds Rating
    • Tagged, dated and cleared on time 5 pts
    • Tagged but past the hold period 3 pts
    • Untagged or hidden merchandise found 1 pt

5. Reports 19 items

  1. The store manager reviews the employee purchase report every week Yes / No 1 pt
  2. The employee purchase report lists each purchase by employee with the discount given Yes / No 1 pt
  3. The exception report of manual discounts and price overrides by cashier is reviewed every week Yes / No 1 pt
  4. The report of store-level markdowns by employee and reason is reviewed every week Yes / No 1 pt
  5. The report of returns of employee purchases is reviewed every period Yes / No 1 pt
  6. The report of price adjustments is reviewed every period Yes / No 1 pt
  7. Each report review is signed and dated by the manager Yes / No 1 pt
  8. Date of the last signed report review Date
  9. Employee purchases made on the first day of a markdown were looked at in the last review Yes / No 1 pt
  10. A payment card used in the discounted purchases of more than one employee was looked at in the last review Yes / No 1 pt
  11. The cashiers with the most manual discounts are identified by name in the last review Yes / No 1 pt
  12. Friends-and-family passes issued were reconciled with passes redeemed after the last event Yes / No 1 pt
  13. The store manager's own purchases and discounts are reviewed by the district manager Yes / No 1 pt
  14. Exception alerts from loss prevention were acknowledged within the deadline set by company policy Yes / No 1 pt
  15. Discount and markdown reports can be opened only by managers Yes / No 1 pt
  16. Employee discount transactions in the last period Number
  17. Employee discount given in the last period (% of sales) Number
  18. Store-level markdowns taken in the last period (dollars) Number
  19. Review of discount and markdown reports Rating
    • Reviewed weekly, signed, exceptions questioned 5 pts
    • Reviewed irregularly 3 pts
    • Not reviewed 1 pt

6. Follow-up 15 items

  1. Each exception questioned with an employee is documented with the date and the explanation given Yes / No 1 pt
  2. Suspected abuse is referred to loss prevention or human resources as company policy states, not settled in the store Yes / No 1 pt
  3. Cases referred to loss prevention that are still open Number
  4. The outcome of each closed case is recorded in the store's file Yes / No 1 pt
  5. The discount and employee purchase policy signed by each employee is on file Yes / No 1 pt
  6. The policy was re-acknowledged by every employee within the period set by company policy Yes / No 1 pt
  7. Employees were briefed on the rules before the last friends-and-family event Yes / No 1 pt
  8. Employees were briefed on the hold and purchase rules before the last major markdown Yes / No 1 pt
  9. An employee asked could state whether employees may buy a newly marked-down style on its first day Yes / No 1 pt
  10. Register permissions were tightened for cashiers with repeated unapproved discounts Yes / No 1 pt
  11. The district manager reviewed the store's discount and markdown results at the last visit Yes / No 1 pt
  12. Corrective actions from the previous review have been completed Yes / No 1 pt
  13. Name of the store manager Short text
  14. Overall control of discounts and markdowns Rating
    • Every discount and markdown traceable and reviewed 5 pts
    • Some unapproved discounts or unreviewed reports 3 pts
    • Discounts or markdowns not traceable 1 pt
  15. Corrective actions required Comments

About this template

This checklist is part of the Bindy template library. Yes / No checks score 1 point when met; ratings score the points shown for each option. The overall score is the percentage of points earned, with N/A answers excluded. In Bindy you can add photos, assign corrective actions, require sign-off and compare results across sites.

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