Discount in D365 Commerce

Updated: Feb 24

Below written article will provide you great insight of Discount in D365 Commerce/Retail and other important definition and setups required to known to better work capability in Dynamics 365.


What is Discount?


Discounts are deduction of the regular price of a product or service to increase sales. Discount is a term used for pricing strategy which leverages customers to provide goods and services on lower price. Discount Strategy is helpful for driving traffic and it can also be used as sales short term strategy. It typically employed to either attract new customer, retain old ones, enhance finance options, or manage inventory levels.






In D365 Retail/Commerce, Discount types can be configured for below different types of commerce entities types with the help of Price Group which are as follows




Price group are at the heart of Price and Discount management in commerce. Price group are used to assign prices and discount to commerce entities which are as Channel, Catalogs, affiliation, and loyalty program. By Itself price group is just a name, description and optionally a pricing priority. The primary objective of price group is managing the many to many relationships that discount and prices have with commerce entities





Now Let first understand the entities first and the reason for having different prices and discount on the entities


1. Channel


There are three types of channels available in D365 which are as follows


  • Retail Stores


Retail Stores are considered as brick-and-mortar stores used to shop, display range of products, and sell product to the end users. Examples are Reliance, Big Bazar, Twenty-Four Seven convenience store, 7-Eleven etc.




  • Call Center


Call Center channels are used as traditional call centers where customer service representative take order on phone or sell services or product to the customer by creating, updating or manage customer orders over the phone. examples are Insurance call, Investment call, Credit cards services etc.



  • E Commerce Store



E- Commerce store is considered as websites used to organize and sell products online. In D365 Retail User can create own site or connect to an existing website as well. Examples are Amazon.in, Flipkart.com or snapdeal.in etc.




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In Commerce Industry, it’s very normal to have different prices and discount in different channels because of two primary factors that affect channel specific prices are cost and local market conditions

  • Cost


Due to Store are having presence in wide geographical area and product source is far away from channel, so it requires more cost to stock a product. So, if user is having store in large geographical area, so they can set different prices and discount in different channels.


  • Local Market Conditions



A Store may have direct competition across the street will be much price and discount sensitive than a store that doesn’t have direct competitor nearby.


2. Affiliation


A General definition of an affiliation is a link to or association with a group. In Commerce Affiliation are group of customers.



Affiliation is much more flexible tool for customer pricing and discount than the core Microsoft Dynamics 365 concept of customer group and discount groups.


Affiliation can be used for both Price and Discount, whereas non retailing pricing has a different group for each type of discount and price.



A Customer can belong to multiple affiliation but can belongs to only one non-retail pricing group of each type. Affiliation can be setup so that they are linked to customer, they don’t have to be. User can use affiliation for anonymous customer as when needed.


For example, A store has offer for students to have 5% off on meals, So Cashier can assign a Customer to Student affiliation by just seeing a group membership card


Affiliation can be used for differential pricing also. For example, when a retailer sell to an employee, it might want to change the selling price instead of applying a discount on top of the regular price.


Retailer also can have two different prices and discount for B2C and B2B customers based on their purchasing volume. Affiliation enables for both these scenarios.




3. Loyalty Program


A customer loyalty program run by Company or Retailer to offer benefit to frequent customers. In Dynamics 365, Loyalty program in relation to price and discounts, loyalty programs are just an affiliation that has special name.


Both Price and discount can be set for loyalty program as same as affiliation, but customer get loyalty pricing during a transaction or order differ from the way that they get affiliation pricing. Customers get loyalty pricing if loyalty card is added to transaction. When loyalty card is added to transaction, the loyalty program is also added. Then loyalty program enables prices and discount


Loyalty programs have multiplier tier, and the discount can differ for different tier. In this way retailer can give frequent customer larger rewards without having to manually put those customers into special group.


Loyalty programs have additional functionality besides prices and discount. However from the perspective of pricing and discount, they are same as affiliation






4. Catalog


Catalog means a complete list of items in a systematic or alphabetical manner. Some Retailers use physical or virtual catalog to market product to and price them for focused group of customers.



As a part of business model to target marketing via a catalog, these retailers can set differential prices on their various catalogs. Microsoft Dynamics 365 supports this capability by letting you define catalog specific discount and prices, just as user can define channel specific or affiliation specific discount. When you edit a catalog, you can associate price group with the catalog, just as you can associate them with a channel, affiliation, or loyalty program.


Best Guidance to Use Price Group


  • Don’t Use a single price group for multiple entity type.

  • Use Unique set of price group for all available entities type such as channel, Affiliation, or on loyalty programs

  • Use Prefix or suffix in the name of price group for identification

  • Avoid setting price group directly on customer. Instead use an affiliation. In this way user can assign all types of Prices and Discount to customer, not just the price trade agreement

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Types of Discount



1. Simple Discount

An Amount or Percentage off discount on a product. This type of discount is highly used in commerce stores to attract Customers

Promo's Example of Such Discount are



2. Quantity Discount


A discount that is applied when two or more products are purchased. These type of offers and promotion are used by Retailer to sell more. This type of discount is offered by Retailer to entice customer to purchase in larger quantities. It will help Retailer to increase the Unit Per Transaction, Increase Average Bill Value, lower their inventories and reduces per unit cost.

Promo's Example of such discount are





3. Mix and Match Discount


A discount is applied when a specific combination of product is purchased by Customer. These types of Offer promoted by Retailer to sell bundled product in lower price. It will benefit to both the parties where customer gets to buy the product at a discounted price and benefits from saving, on the other hand Retailer get to drive sales of more item in one transaction which help him to achieve high Average transaction value or Average Bill Value and Unit Per Transaction.

Promo's example of such discount are



4. Threshold Discount


A discount is applied when the transaction total is more than a specified amount. This type of discount is used by retailer to increase Bill Value Size and Unit Per Transaction

Promo's of Such Discount are



5. Tender Base Discount or Channel Tender Discount


A discount is applied when the transaction total is more than a specified amount and specific payment type (for example cash, credit, or debit card) is used for payment. These types of offers promoted by Credit Card Companies at Retail or Online Store to convince customer to use their card to complete the transaction

Promo's of Such Example are



6. Shipping Threshold Discount


A discount is applied when the transaction total is more than a specified amount and specific mode of delivery (Two-day shipping or overnight shipping) is used on others. It will be use by retailer to increase the bill value and for customer satisfaction by providing free delivery or discounted delivery charges to the customer

Promo's of Such Example



Important Setups and Options Needs to Consider While Configuring Discount in D365


In D365, User are having options to create discount having dedicate page available in All Discount Page (Path: - Retail & Commerce> Pricing and Discount) and there is an availability of “Pricing and Discount ManagementWorkspace.


Discount Setup are divided into two parts at broad Level which are as follows


1. Filter Discount for Consideration

2. Control the Order in which Multiple discounts are considered

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Filter Discount for Consideration




1. Discount ID


Need to put unique id for each discount, which can’t be changed later

Best Practice Tips


Set Unique Number Sequence for each type of discount and Make sure that the number sequence won’t collide. For example, unique prefix for each discount type such as D for Discount, Q for Quantity, MM for Mix and Match and T for Threshold


2. Discount Name


It’s a short text field used to describe the discount and that description is visible in MPOS and CPOS cart line and Printed on Receipt


Best Practice Tips


Put description short and explainable, which help cashier to identify the discount definition from the content itself.


3. Discount Type

There are four discount types in Commerce which are Discount, Quantity, Mix & Match and Threshold discount. This discount type is set when you first create a discount and can’t be change later.


4. Status


The status of discount can either be Enabled or Disabled. Discount can only be edited when Status is “Disabled” and When user enabled the discount various standard validation checks are performed on the form depending on the discount type


Points to Remember for Interview Question

Ques: - Provide 5 Validation Checks performed while enabling the discount status from Disabled to Enabled

a. A discount must have at least one discount line


b. The Percentage value for Percentage Discount must be more than zero and less than or equal to 100.


c. The amount value for an amount discount must be more than zero (0) and Zero and Negative amount aren’t valid


d. A discount must have at least one price group. A discount that doesn’t a price group will never be applied on transaction


e. A Unit of measure (Uom) is required for Quantity and Mix and Match discount lines


f. For threshold discount 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


g. For Mix and match least expensive discounts, the number of least expensive products more than 1 and less than the number of products that are required to trigger the discount


5. Currency


Currency field play important role to filter discount for consideration. The pricing engine will consider only discounts that have same currency


6. Unit of Measure


Unit of Measure (UoM) is a field on all discount lines except threshold discount lines. The Unit of Measure field act 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 discount line isn’t considered during discount calculation.


Points to Remember for Interview Question

No UoM Conversion is done during discount calculation

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Control the Order in which Multiple discounts are considered


7. Discount Concurrency mode


Discount Concurrency field are having three options to choose which are as follows: - “Exclusive”, “Best Price” and “Compound


Points to Remember for Interview Question




  • Exclusive discounts are always having high priority and applied before Best Price and Compound discount

  • When the Value is Exclus