CHAPTER 16 Using Math in Sales - South Lake Marketingsouthlakemarketing.weebly.com/uploads/1/2/4/2/12428029/chapter16.pdfChapter 16 focuses on the concluding steps ... presenting a

INTRODUCE THE CHAPTERChapter 16 focuses on the concluding steps of the sales process—recording the transac-tion, presenting a sales receipt in retail sales, and forms of business-to-business sales. It also covers the functions of cash registers, types of sales transactions, and the steps of fi lling out sales checks, purchase orders, and invoices.

BUILD BACKGROUNDAsk students to think about what happens when they buy something. Do they pay cash or use credit cards? What do they do with their receipts? Then ask them to imagine being a salesperson. Ask: What would be the most challenging thing about each type of transaction—making change, process-ing credit cards, or creating receipts? Tell students that this chapter will teach them more about sales transactions.

16

EXPLORE THE PHOTO

Process purchases, returns, and exchanges. See pages 335, 337, 338, 340–341.Generate and process sales documentation. Sales documents include cash, personal checks, credit sales checks, coupons, and refund slips. Calculate sales tax, discounts, and shipping charges. See pages 339–341.Name the functions of cash registers and point-of-sale. (POS) terminals. Cash registers record sales, store cash and sales documents, and pro-vide receipts. POS terminals can update inventory records, reorder items, store customer informa-tion, print fi nancial statements, sales trends and personnel productivity reports.

Explain the uses for Universal Product Codes (UPCs). UPCs allow for each item to have a dis-tinct item number for identifi cation. The bar code allows the product to be scanned electronically and tracked in the system.Make change. There are two methods: making change with a POS system and making change without a customer display screen. Prepare purchase orders and invoices. A purchase order is a legal contract between the buyer and supplier. An invoice is an itemized list of goods. Explain delivery terms. Delivery terms clarify who will pay for delivery and when the change of title (ownership) will take place.

Market Talk Remind students of the non-computerized cash registers they may have seen. Have students discuss differ-ent types of cash registers they see today.

Quick Think Responses may include: Large stores selling CDs and books which use POS terminals to update store inven-tory, or online stores which use POS termi-nals not only to update inventory but also to record customer preference information.

Ask students to list the potential benefi ts

of POS terminals. Answers might include: more accurate inventory or time saved by not having to physically count inventory.

REVIEW THE OBJECTIVESList all types of retail sales transactions. cash, debit or credit card sales, layaway (will-call), on-approval, or cash-on-delivery (COD) sales

332 UNIT 5 — SELLING

C H A P T E R 16

Chapter ObjectivesAfter reading this chapter, you should be able to:

• List all types of retail sales transactions

• Process purchases, returns, and exchanges

• Generate and process sales documentation

• Calculate sales tax, discounts, and shipping charges

• Name the functions of cash registers and point-of-sale (POS) terminals

• Explain the uses for Universal Product Codes (UPCs)

• Make change

• Prepare purchase orders and invoices

• Explain delivery terms

Market Talk An electronic cash register can

function as a point-of-sale (POS) terminal if it

is connected to a network that keeps track of

sales, inventory, and new merchandise. This

new generation of cash registers functions as a

sales and a marketing tool.

Quick Think Name a store where you often

shop. Is it equipped with conventional cash

registers or POS stations? Why do you think

this store uses that type of register?

Using Math in Sales

EXPLORE THE PHOTO

Gabe Palmer/Corbis

332

For the Teacher TeacherWorks™ Plus

Teacher Resources at glencoe.com

Interactive Chalkboard ExamView® Assessment Suite Fast File Unit 5

For the StudentMarketing Essentials Online Edition

Student Activity Workbook Marketing Math Workbook Marketing Research Project Workbook School-to-Career Activity Workbook Competitive Events Workbook BusinessWeek Reader with Case Studies

Interactive Student EditionStudent Resources at glencoe.com

16

Discuss the performance indicators for the

DECA events listed, so that students understand

how to demonstrate their understanding.

The event acronyms stand for:

AAM: Apparel and Accessories Marketing

Series

ADC: Advertising Campaign Event

ASM: Automotive Services Marketing

Series

BSM: Business Services Marketing Series

EMDM: E-Commerce Management Team

Decision Making Event

FMAL: Food Marketing Series, AL

FMDM: Financial Analysis Management

Team Decision Making Event

FMML: Food Marketing Series, ML

FSRM: Full Service Restaurant Manage-

ment Series

HMDM: Hospitality Services Management

Team Decision Making Event

HRR: Hospitality and Recreation Market-

ing Research Event

MMS: Marketing Management Series

QSRM: Quick Serve Restaurant Manage-

ment Series

RFSM: Restaurant and Food Service

Management Series

RMS: Retail Merchandising Series

SEM: Sports and Entertainment Marketing

Series

SMDM: Sports and Entertainment Marketing

Management Team Decision Making

Event

TMDM: Travel and Tourism Marketing

Management Team Decision Making

Event

TSE: Technical Sales Event

Find timed DECA Prep activities correlated to the Competitive Events Workbook for students and DECA tips for teachers at the Marketing Essentials OLC through glencoe.com.

Chapter 16 — Using Math in Sales 333glencoe.com

ROLE PLAY Check your understanding of DECA performance indicators with the DECA activity in this chapter’s review. For more information and DECA Prep practice, go to the Marketing Essentials OLC through glencoe.com.

DECA Events These acronyms represent DECA com-petitive events that involve concepts in this chapter:

AAM*BMDM*

FMAL* FMML*

QSRM RFSM

RMS*

Performance Indicators The performance indicators represent key skills and knowledge. Relating them to the concepts explained in this chapter is your key to success in DECA competitive events. Keep this in mind as you read, and write notes when you fi nd mate-rial that helps you master a key skill. In these DECA competitive events, you should follow these perfor-mance indicators:• Calculate miscellaneous charges• Process sales transactions• Describe the use of technology in the selling functionThe events with an asterisk also include:• Accept checks from customers• Prepare cash drawers/banks• Open/close register/terminal• Process sales documentation• Use an information system for order fulfi llmentSome events include these performance indicators:AAM Process returns/exchangesBMDM Process returns/exchangesHLM/HMDM Perform bucket (room rack) check

and resolve discrepancies Analyze food and beverage sales

income report Analyze restaurant sales Analyze room sales/occupancy ratesRMS Process returns/exchangesTMDM Calculate cost of event Calculate cost of travel packagesTSE Prepare sales reports

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SECTION 16.1

BELLRINGER ACTIVITY

Divide the class into small groups of two or three. Have each group of students discuss their employers’ procedures and policies (or ones they have observed as customers) about paying for purchases with any of the following:

• cash• checks• debit cards• credit cards

Have each group report their fi nd-ings to the class.

Preteaching

VOCABULARYKEY TERMS Assign six teams of students one vocabulary term each. Have teams predict the meaning of each term and write their predictions on the board. Leave this list on the board so students can see how close their defi nitions were to the actual defi nitions as they work through the chapter.ACADEMIC VOCABULARY Refer students to the OLC through glencoe.com for the Academic Vocabulary Glossary before they read the section.

GRAPHIC ORGANIZERModel using the graphic organizer for students. Tell students to go to the OLC through glencoe.com for a printable graphic organizer.

NCLB

NCLB connects academic correlations to book content.

C Critical ThinkingExplain Ask students: Is it better to pay for purchases using cash or credit? Have students give reasons for their answers. For example, dealing with cash may be simplest for the store, but shoppers may not want to carry large amounts of cash.

READING GUIDE

Ask students to think about the last purchase they made. Ask: How did they pay? Make a chart on the board

tallying the most common payment methods and the steps taken before the transaction was completed.

D Develop Concepts

THE MAIN IDEAHave students list two or three math skills needed to complete transactions.

Model for the students a way to list differences by creating a chart.

BEFORE YOU READ

1. Cash or check 2. 3.

4.

Types of Retail Sales Transactions

5. 6.


Types of Retail Sales TransactionsAs a salesperson or cashier, you will handle several types of

sales transactions. Most will be cash and debit or credit card sales, but you might also deal with layaway (or will-call) sales, on-approval sales, and cash-on-delivery (COD) sales. You will also handle returns, exchanges, allowances, sales tax, and shipping charges.

Summarize List the

differences in handling

various methods of

payment.

READING GUIDE

THE MAIN IDEAThere are many ways to complete a purchase transaction. Basic math skills are essential in all sales transactions.

GRAPHIC ORGANIZERDraw this chart to list six types of retail sales transactions.

OBJECT IVES• List all types of retails sales

transactions

• Process purchases, returns, and exchanges

• Generate and process sales documentation

• Calculate sales tax, discounts, and shipping charges

KEY TERMS• sales check

• layaway

• on-approval sale

• cash-on-delivery (COD) sale

• sales tax

• allowance

ACADEMIC VOCABULARYYou will find these words in your reading and on your tests. Make sure you know their meanings.• transfer

• area

Connect You have finished shopping and are checking out. Describe all the steps that take place before you leave the store.

SECTION 16.1

BEFORE YOU READ

Sales Transactions

ACADEMIC STANDARDSEnglish Language ArtsNCTE 1 Read texts to acquire new information.

Science StandardsNSTA Content Standard E Science and Technology: abilities of technological design

Go to the OLC through glencoe.com for printable graphic organizers, Academic Vocabulary definitions, and more.

D

C

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NCLB




SECTION 16.1

Extended ActivityDemonstrate Sales TransactionsHave students read this section in class and divide the students into four groups. Ask the groups to fashion artifi cial currency, making sure the bills are of a standard size by giving them a blank tem-plate. Make sure each group makes the same number of each denomination of bills: $1, $5, $10, $20, $50, and $100. Also have on hand ten or more play “checks” and simple credit card/debit card receipts and distribute them evenly for each group. Once you have a set of artifi cial currency, checks, and receipts at your disposal, ask each group to organize the documents by category: currency, checks, and receipts. You can use these documents to demonstrate sales transactions through this section.

Discussion Starter

TYPES OF RETAIL SALES TRANSACTIONSAsk students to brainstorm and describe different types of sales transactions. Have volunteers fi nd each type of transaction in the text and read it to the class.

S Skill PracticeGuided PracticeSecurity in Sales Transactions Ask students to imagine they are all section managers in a large department store. The department store has been losing money to fraud. People have passed counterfeit money, bad checks, and paid with stolen credit cards. The cashiers need to be trained to guard against fraud. Ask: How would the section managers design the training? What types of skills would be included?

Model Show students some of the methods people might use to pass bad checks or pay with stolen credit cards, such as saying they lost their identifi cation cards.

Clarify Remind students that no method of fraud prevention in stores may be perfect all the time. Law enforcement and security offi cers are also needed to protect stores from fraud.Chapter 16 — Using Math in Sales 335

Cash or Check SalesA cash sale is a transaction in which the

customer pays for the purchase with cash or a check. The simplest sale occurs when the customer pays in cash. The cashier records the transaction on the register, gives the customer change and a receipt, and wraps the purchase.

When a customer writes a check, you may need to verify his or her identity by requesting a driver’s license and another form of identifi-cation. Every business has rules about accept-ing checks. You will have to learn the policy of your company or store.

Sales ChecksA sales check is a written record of a sales

transaction that includes such information as the date of the transaction, the items pur-chased, the purchase prices, sales tax, and the total amount due. It is valuable to a customer as an itemized receipt.

In its most complete form, a sales check can contain customer information (name, address, and phone number) and details such as the time of the sale and the identity of the salesperson. While handwritten sales checks are becoming less common than printed ones, some small firms still use them. The salesper-son records the transaction by hand in a sales check book that contains at least two copies of each form. One copy is given to the customer and one is retained by the business as a record of the sale.

Math Skills for Handwritten Sales Checks Some math is necessary when preparing

handwritten sales checks. The five steps of this process are shown in Figure 16.1 on page 336. Occasionally, you will not be given a unit price, and you will need to calculate it on your own. This occurs when items are sold in multiple quantities, such as three reams of paper for $15. To find the selling price of one item in an instance like this, you divide the total price by the number of items: One ream of paper in this example would be $5 ($15 � 3).

When the result of the division is uneven, any fraction of a cent is rounded up and

charged to the customer. The price of one ream of paper when three reams are $13.99 is calculated as follows: $13.99 � 3 � $4.6633 or $4.67.

Debit Card SalesBusinesses that have an encrypted, or coded,

personal identification number (PIN) pad can ask customers whether they would like to pay with debit or credit. Customers who choose “debit” key in their private PIN. The terminal then dials out and checks to see whether there are enough funds in the customer’s account to pay for the sale. If so, the funds are transferred to the merchant’s account. The customer does not need to sign a sales draft.

Advantages of Debit Card PaymentsThe bank that issues the debit card charges

the merchant only a flat rate, for example $.59 per sale, regardless of the amount of the sale. They are a convenience to many custom-ers who cannot get approval for a credit card, who prefer not to use a credit card, or who do not carry either a checkbook or large amounts of cash. Most merchants prefer payment by debit card to payment by check because they have access to the money much sooner, there is no risk of insufficient funds, and the cost to the merchant is less than when the customer pays with a credit card.

Credit Card Sales Statistics show that by accepting credit

cards, businesses can increase sales by as much as 40 percent. Primarily because of this potential for increased sales, most businesses today accept one or more of the major credit cards, such as Visa, MasterCard, and American Express cards.

Credit Card Payment on the InternetCredit cards are also the most frequently

used method of payment for Internet pur-chases. Many Internet sites also allow the con-sumer to make purchases with a gift certificate that has a security code the customer must key in. For safety reasons, the payment data (card number, expiration date, security code,

S

335

SECTION 16.1

CONTINUED

D Develop ConceptsGuided PracticeSales Checks Bring to class or cre-ate an example of a sales check. Divide students into groups and have them label the parts of the sales checks, including information as the date of the transaction, the items purchased, the purchase prices, sales tax, and the total amount due.

Demonstrate Show students how to analyze a sales check yourself. Use a real sales check or create one to display on a board. Then ask students to point out the different parts.

Explain Ask students to think about what they might learn if they kept all their sales checks. Explain that keeping sales checks can help individuals budget because they can predict how much they typically spend on items in a given period of time.

Sales Check—Multiple Purchases

Discussion Ask students to look at Figure 16.1. Then, ask them to explain what each of the bold columns means: CODE, QTY, PRICE, DESCRIPTION, and AMOUNT. Also, make sure they understand the last six rows of the sales check: SUB TOTAL, TAX, SHIPPING, TOTAL AMOUNT, PAID, and BALANCE.

Caption Answer You can check your work when you are fi nished and use a calculator or computer when necessary.

For instructions, ideas, and answer guide, go to The Teacher Center at the Marketing Essentials OLC through glencoe.com.

Ask students how conducting sales transactions could help to reinforce and improve basic math skills.

16.1

ODE L’S CAMER A, IN C.1329 Wa lnut Street • Santa Barbara, CA 93101

NEW CUSTOMER DAT E

YES NO 6/17/--NAME

COMPANY

ADDRESS

CITY & S TA TE

PHONE (RESIDENCE) PHONE (OTHER)

SOLD BY TYPE OF SALECASH CHECK C.O.D. CARD TYPE ACCOUNT PURCHASE ORDER NO.

?CODE QTY DESCRIPTION PRICE AMOUNT

6T 1 Olympus digital camera 399.00 399 004B 10 Batteries 2.80 28 0011Y 8 Cleaning cloths 3.00 24 00

SPECIAL INSTRUCTIONS HANDLING — —SUBTOTA L 451 00TA X 31 57SHIPPING

TOTA LAMOUNT 482 57

SHIP VIA: PA ID 500 00PA ID ON # TC # BA LANCE 17 43

CC #7932

Joe BundyThe Daily Times

— —

glencoe.com336 UNIT 5 — SELLING

Step 5—Add subtotal, tax, and shipping to

get the purchase total. This is the amount

the customer will pay.

Step 1—Multiply unit price times quantity

for each item and extend the amounts to

the last column. Remember that the last

two digits on the right are cents. Place a

decimal point to their left, or enter them to

the right of the vertical line dividing the last

column into two unequal parts.

Step 2—Add item amounts to arrive at a

merchandise subtotal. Enter this figure on

the appropriate line.

Step 3—Calculate sales tax or look it up in

a tax table. Sales tax must be paid by the

buyer on all retail sales. It is calculated as a

percentage of the merchandise subtotal. In

most states, food and prescription medicine

are exempt from sales tax, as are shipping

charges.

Step 4—Calculate shipping charges. You

need to decide if you will use U.S. mail or a

specific express mail carrier.

16.1 Sales Check—Multiple Purchases

Go to the Marketing Essentials OLC through glencoe.com to find a project on sales checks.

• Adding Complexity The basic sales check becomes more complicated when the customer buys several items, or

several units of one item.

How can you be sure that the final sales check is accurate?

D

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CONTINUED

SECTION 16.1

S Skill PracticeIndependent Practice

L1 Have students explain how to calcu-late unit price in their own words. total price divided by number of items

L2 Have students fi nd the total cost of a pair of boots whose sales price is $19.95 if the sales tax is 8.9%. $21.72; $19.95 � .089 � $1.78; $19.95 � $1.78 � $21.72

L3 Ask students to calculate the monthly cost of accepting a credit card payment if the amount per month in sales is $100,000 and the interest rate is 2.1 percent. $2,100; $100,000 � (100,000 � 0.021) � $2,100

Model Tell students that sometimes stores offer special deals to customers who buy more of an item, such as buying 3 shirts for $60, when just one shirt would cost $25. Ask students to think of other examples of these types of deals.

Demonstrate Some deals are better than others. Ask students which is the better deal: 3 shirts for $60 or 4 shirts for $75. Walk students through the process of dividing the price by the number of shirts to fi nd the unit price and determine the better deal. 4 shirts for $75 is a better deal

ELL Have students translate the verbal problems into their own language fi rst, then into an equation.

PRACTICE 1 ANSWERS

1. a. $1,166.50; b. $20,405.01 2. $190.00 3. $42,553

Online ActivityCyber ShippingHave each student select an online store and fi nd out how that store calculates shipping costs. Ask students to report their fi ndings to the class and to also note the different methods and costs of shipping.


cardholder’s identity) sent via the Internet are encrypted. This makes it more difficult for unauthorized individuals to gain access to a customer’s card numbers.

Credit Card Payment Costs to the MerchantIf your company accepts credit cards, it

pays a fee to the bank or agency that handles the billing and record keeping for each card transaction processed. This fee is a percentage of credit sales based on a sliding scale, which means that it varies according to the size of the store account and how the charges are processed.

Suppose your store had Visa sales of $100,000 in one month and that another store had Visa sales of only $2,000 in that same month. Your company would pay a smaller percentage for handling.

Overall, the cost of accepting credit cards typically varies from a low of 1.79 percent for MasterCard and Visa to 3.25 percent for Amer-ican Express.

How Are Credit Card Payments Processed?For many businesses, the amount of each

credit card sale is electronically deposited in the business’s bank account as the sale is made. A credit card sales check, or receipt, is issued by the cash register. With this procedure, the credit card company deducts its service charges from the store’s bank account imme-diately, and the store normally has access to the customers’ payment funds the next day. However, some businesses opt to have credit card fees deducted monthly.

Today businesses rarely take manual credit card slips to the bank. Most businesses process manual credit card sales over the phone using an automated system provided by their bank, or by keying in the credit card and sales information directly into their credit card terminal.

Getting Credit AuthorizationWhile credit cards are a convenient alterna-

tive to more traditional forms of payment, somefraud is always possible. Many retail busi-nesses set a floor limit, a maximum amount a

customer is allowed to charge to a credit card, to protect themselves against losses due to the use of stolen or fake credit cards. Illicit charges are disputed by the true cardholder and the credit card company, and the store is liable for only the amount of the floor limit.

Most modern cash registers include an inte-grated credit authorizer. An electronic credit authorizer can also be a device that reads data encoded on credit cards. The sales clerk inputs the amount of the satle into the device. The data are then transmitted to a computer, which returns an approval or a disapproval in less than a minute.

P R A C T I C E 1: CR E D I T CA R D FE E S

Calculate the impact credit card fees would have on the business described below.

1. At Carol’s Pearls and Stones, Visa sales are usually between $13,000 and $15,000 per month. The Visa handling charge is a sliding scale. For $10,000–$14,999, it charges 3 percent of sales; for $15,000–$19,999, 2.5 percent; and for $20,000–$29,999, 2 percent.

That means that for a purchase of $22,000, Visa collects a 3 percent fee on the first $14,999, a 2.5 percent fee on the next $5,000, and a 2 percent fee on the remaining $2,001. The total Visa collects is $614.99.

a. Carol had $15,500 in Visa sales one month. How much more did she net than if sales had been $14,300?

b. How much would Carol have netted in that month if her shop had done $21,000 in Visa sales?

2. Carol has decided to accept the DinersClub card in her shop. The handling charges are 1 percent higher than those for Visa at each sales level. If Carol had $19,000 in Diners Club sales, how much more would she pay in handling fees than she would have for the same amount in Visa sales?

3. Carol had $13,600 in cash sales, $14,800 in Diners Club sales, and $15,200 in Visa sales one month. What were her net sales after handling charges?

Note: Answers to all practice sets at the Marketing Essential OLC through glencoe.com.

S

337



CONTINUED

SECTION 16.1

D Develop ConceptsDrawing ConclusionsRecording Credit or Debit Card

Sales To explain the importance of recording credit and debit card sales, ask students to imagine the things that could go wrong with electronic retail transaction recording systems. Answers might include power outages or computer viruses. Ask students what stores should do if their computers are down and a customer wants to make a purchase using a credit or debit card. Reminds students that there are usually three copies of each manually prepared sales check—one for the customer, one for the seller, and one for the bank or credit card agency. The salesperson might use a mechanical imprinter to transfer the customer’s name and account number to the sales slip, or the salesperson might write the informa-tion on the sales check by hand.

Demonstrate Bring to class or create a sample sales slip. Have students work in pairs to record credit or debit card sales by hand. Students can take turns making up their purchases. If carbon paper is available, students can use it to make copies and label each copy: merchant copy, customer copy, and bank or credit card agency copy.

Clarify Remind students that as sales people they can help protect their businesses from credit card fraud by checking the customer’s signature on the back of the card.

C Critical ThinkingDraw Conclusions Ask students what advantages they see to using a computer-ized sales check versus a handwritten sales check. Answers might include that computers are more accurate or faster.

Safety in Internet Sales

Discussion After students have read the Case Study, lead a discussion about why new systems had to be invented to deal with Internet transactions. Expand the discussion by asking students to compare and contrast the pros and cons of purchasing something online with a credit card versus in a store with a credit card.

Answer: Possible answers may include that the fraud protection is a value-added service worth paying for and/or that the one percent may be less than the amount lost to fraud, when the small business uses other credit card companies.

For instructions, ideas, and answer guide, go to the Teacher Center at the Marketing Essentials OLC through glencoe.com.


Recording Credit or Debit Card Sales

As a salesperson in retail business, you will probably process many credit card sales. Elec-tronic recording of credit card sales is now common and has replaced manually pre-pared credit card sales checks. There are usu-ally three copies of each manually prepared sales check—one for the customer, one for the seller, and one for the bank or credit card agency. You might use a mechanical imprinter

to transfer the customer’s name and account number to the sales slip, or you might write the information on the sales check by hand.

Layaway SalesRemoving merchandise from stock and

keeping it in a separate storage area until the customer pays for it is called layaway, or will-call. Layaway appeals to many shoppers and increases sales. The customer makes a deposit on the merchandise and agrees to pay for the

Safety in Internet Sales

How can a small business sell products over the Internet and be certain it will be paid? How can a buyer be certain a Web merchant will not misuse credit card information? In the early days of Web marketing, credit card fraud frightened away many buyers and sellers.

eBay and PayPal

PayPal is a system developed in 1998 to provide safe transactions over the Internet. Originally, most of PayPal’s customers were individuals involved in auctions on eBay—the huge Internet auction site. More recently, small online businesses, especially those run by individuals, have been signing up with PayPal. To buy a product from a PayPal client, a purchaser fills out a PayPal registration form, entering credit card and sometimes bank account information. PayPal verifies the information and opens an account for the purchaser.

When someone makes a purchase using PayPal, his or her credit card information is not shared with the merchant. In fact, it is not transmitted over the Web at all, where others might see it. The buyer feels safer making the purchase, and the seller is assured of being paid. PayPal has fraud protection that protects both seller and buyer, making it a more and more popular way to transact business.

If PayPal charges 1 percent more to process each transaction than do credit card companies, why would it make sense for a small Web marketer to use the service?

Go to the Marketing Essentials OLC through glencoe.com to find a research project on Internet sales.

Royalty-free/SuperStock/Age Fotostock

DC

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CONTINUED

SECTION 16.1

CONTINUED

D Develop ConceptsIndependent PracticeSales and Customer Service Ask students to research the business pros and cons of layaway, on-approval sales, cash-on delivery sales, refunds, exchanges, and allowances. Suggest that they talk with customer service people at supermar-kets, offi ce supply stores, or home supply stores about some of the problems they face when dealing with customers. Then, have students set up different scenarios and role-play customers interacting with customer service representatives.

Answer Types of retail transactions include

cash, credit or debit card, layaway or will-call, on-approval, COD, returns, exchanges, allowances, sales tax, and shipping charges.

C Critical ThinkingSales Tax Bring in or create a receipt and point out the sales tax if possible. Ask students to generate a list of items, determine their base price, then fi nd the sales tax and total cost based on their own state’s sales tax and the sales tax in another state.

Discussion Lead students in a discussion of the best ways to communicate with bosses about errors. Ask those students who have had jobs to think of times they have talked with their bosses. Review ways to keep conversations friendly and professional.

Answer: Mark did the right thing. If he had been too afraid to talk to his boss, more customers would have been overcharged. In addition, one of these customers might have noticed the error and complained. This could have hurt the busi-ness. Because Richard pointed out the error to his boss, his boss was able to come up with a solution that would be good for the business.


Should You Tell Your Boss?


lower-income person is paying a higher per-centage of his or her income in making the purchase. For this reason, some states exempt certain items, such as food, clothing, or medi-cation from sales tax.

Sales to the U.S. government are never sub-ject to sales tax.

Sales Tax on the InternetIn the past several years, Internet sales

have soared, and some states feel that they should have an easier time collecting tax on

purchase within a certain time period. The customer receives the merchandise when it is fully paid. If not paid for within the agreed-upon time, the goods are returned to stock. The deposit need not be refunded.

On-Approval SalesAn on-approval sale is an agreement per-

mitting a customer to take merchandise (usu-ally clothing) home for further consideration. Some department and specialty stores extend this special privilege to their regular custom-ers. If the goods are not returned within an agreed-upon time, the sale is final. The cus-tomer must then send a check or return to the store to pay for the merchandise. Credit card information may be taken from the customer so that the sale can be processed if the cus-tomer keeps the item. This practice is a safe way for retailers to handle on-approval sales because there is much less risk involved.

Cash-on-Delivery SalesA cash-on-delivery (COD) sale is a

transaction that occurs when a customer pays for merchandise at the time of delivery. Because the customer must receive the mer-chandise delivery, COD sales are not as effi-cient as other types of sales transactions.

Sales Tax A sales tax is a percentage fee placed by

the government on the sale of goods and ser-vices. Rates differ from state to state. State taxes are sometimes combined with local charges.

Who Pays a Sales Tax?Sales tax is paid only by the final user, or

the individual customer who, in most cases, is also the consumer. It does not apply to goods bought for resale. Consumers pay the cost of sales taxes. A sales tax is a regressive tax. It is assessed at a flat rate that applies to persons of all income levels. Thus, a low-income person and a person with a higher income may pay the same sales tax on the same item, but the

Summarize What are the different types of retail sales transactions?

Should You Tell Your Boss?

Mark works at Richard’s Flowers, driving the delivery van. One day he notices that Richard has been charging his customers sales tax on the delivery charges. None of the customers has noticed this. Mark knows that in his state there is no tax on labor costs. He feels uncomfortable with the situation, but he likes his boss and doesn’t want to lose his job. Mark tells Richard about the overcharging and discov-ers it has been done by mistake. Richard decides to write a note to all his custom-ers, telling them about the mistake and offering a discount on their next orders.

Go to the Marketing Essentials OLC through glencoe.com to find a project on overcharging.

Did Mark do the right thing by telling Richard that he had noticed the tax on delivery charges? What if Mark had been too afraid of losing his job to talk about it with Richard? If a customer had discovered the tax, how would that have affected Richard’s business?

D

C

339




SECTION 16.1

CONCEPTSHave students recall the different ways customers may complete a sales transac-tion and the special requirements of sales people in these transactions. Students should discuss the steps a salesperson goes through to accept cash, checks, credit cards, and debit cards.

KEY TERMS Have students review key terms, their spellings, and defi nitions in small groups.

INDEPENDENT REVIEW

L1 Assign and review Chapter 16 activities in the Student Activity Workbook.

L2 Assign and Review Chapter 16 activities in the Marketing Math Workbook.

L3 Assign and Review Chapter 16 activities in the BusinessWeek Reader with Case Studies.

AFTER YOU READHave students complete the Section 16.1 After You Read section review.

ONLINE STUDY TOOLSHave students go to the Marketing Essentials OLC through glencoe.com for the Section 16.1 practice test.

Refund Slip

Discussion Have students discuss why it is important for businesses to keep track of the reasons items are returned. Answers might include: so that businesses can track which items their customers like and dislike and make orders based on this information, or so that they can check to see if the item is defective in some way, or so that they can help individual customers make better purchases in the future.

Caption Answer Store owners want to make sure the customer bought the item at their store and not another similar store. They also want to make sure of the price the customer originally paid for the item and to track inventory.


16.2

Nicky’s REFUND SLIP

Dress Shop

STORE NO. DATE ITEM RETURNED AMOUNT

8/17/-- SKIRT 45 00NAME Stacy McClintockADDRESS 777 Seaview LaneCITY& STATE Marblehead, MA 01945TELEPHONE NO. 781-882-0252 TAX 3 15CUSTOMER’S TOTAL AMOUNT 48 15SIGNATURE Stacy McClintockEMPLOYEE NO. AUTHORIZED BY REASON FOR RETURN6P G. Smith Wrong color

No refunds after 30 days; No refunds without receipt.


all state-to-state sales, including online sales. Legislation is being considered that would set up an Internet sales tax collection system.

The government does not want to put unreasonable burdens on small businesses selling through the Internet. Most of these mom-and-pop businesses do not have sophis-ticated computer software that could apply every state’s unique tax policies to every trans-action. But states complain that they cannot expect residents to keep perfect records of all their Internet transactions and to send the states the taxes that are due voluntarily.

Returns, Exchanges, and Allowances

A return is merchandise brought back for a cash refund or credit. Most businesses are happy to make exchanges because they want their customers to be satisfied. (See Figure 16.2.)

An allowance is a partial return of the sale price for merchandise that the customer

has kept. These are usually given when there is a defect in the merchandise, such as a miss-ing button.

Each of these situations requires a differ-ent type of sales transaction. Some businesses adopt a policy of no returns; however, most feel that accepting returns is an important part of good customer relations. Some businesses accept returns but only offer store credit that can be used to pay for other merchandise from the same business instead of a cash refund.

A transaction that involves returning an item for a replacement with the same price is an even exchange.

How to Handle Sales Tax in Return or Exchange Transactions

Suppose Duane decides he needs a laptop computer to help him keep up with his studies,but he wants a less expensive one than the one he was given for his birthday. The origi-nal computer was priced at $1,149 (excluding sales tax), and Duane wants to exchange it for

16.2 Refund Slip

Go to the Marketing Essentials OLC through glencoe.com to find a project on refunds.

• Refund Policy Most businesses give customers refunds or exchanges under certain circumstances.

Why do stores often insist that the customer have a sales receipt before giving a refund?

340





CULMINATING ACTIVITYAsk students to recall and provide answers to the following questions:

• What are the primary elements of a sales check? product code, quantity, product, unit price, price, subtotal, tax, shipping, total amount, amount paid, balance

• What are the types of sales trans-actions? Cash sales, debit card sales, credit card sales, layaway (or will-call) sales, on-approval sales, and cash-on-delivery (COD) sales, returns, exchanges, and allowances.

SECTION 16.1

NCLB

NCLB Activity correlated to Mathematics and English Language Arts Standards

PRACTICE 2 ANSWERS

1. $112.35 2. $74.90

Key Terms and Concepts

1. A sales check is a written record of a sales transaction that includes such information as the date of the transaction, the items purchased, the purchase prices, sales tax, and the total amount due. A sales check can also contain customer information and details such as the time of the sale and the identity of the salesperson.

2. The bank that issues the card charges the merchant a fl at rate of $.59 per sale, regardless of the amount of sale. Charges for credit card use are considerably higher, 1.79% to 3.25% or more. Merchants accept credit cards because accepting them increases sales up to 40%.

3. A return is merchandise brought back that generates a refund or credit to the buyer.

An exchange is merchandise brought back and replaced by other merchandise. An al-lowance is a partial return of the sale price for defective merchandise that the buyer chooses to keep.

Academic Skills 4. $55.35; ($24.95 � $5.95 � $34.99)

�.80 � $52.71; $52.71 � ($52.71 � .05) � $55.35

5. E-mails should include discussion of increased sales as well as increased costs.

Find answers at the Marketing Essentials OLC through glencoe.com.

16.1 AFTER YOU READ

Problem Solving Solveproblems that arise in mathematics and other contexts. 1. To solve this problem, add the prices

of all items purchased to determine total cost.

2. Multiply total cost by the decimal equivalent of 20 percent to determine discount, and subtract that amount.

3. Multiply price of goods purchased after the discount by the decimal equivalent of the 5 percent sales tax to determine cost of sales tax.

4. Add the amount of sales tax to total cost after the discount to determine total cost.

For help, go to the Math Appendix located at the back of this book.


PR A CT I CE 2

How much will be returned to or paid by the customer in each of the following cases? Assume a sales tax rate of 7 percent.

1. Mr. Williams returned a $330 lamp that did not put out enough light. He chose another style priced at $225. How much will you return to him?

2. Mrs. Crawford returned a $159 printer because it was apparently defective. She chose another model priced at $229. How much more will you charge her?

one priced at $895. To handle this transaction, you refund the difference, $254, plus the sales tax on $254. This procedure is reversed for a customer who wants to exchange an item for one that is more expensive. The customer pays the extra cost and tax of the item.

Consider how a sales check is prepared. Each item is not taxed individually in mul-tiple purchases; instead, the subtotal is used to calculate the sales tax. When looking at the sales check, simply find the item being returned, calculate the difference between that item and the item the customer is taking in exchange for the item returned, and determine the difference in tax on the two amounts. The customer has already paid tax on the original item, so tax is due only on the difference between the two items.

Shipping ChargesNot all purchases can be bought and car-

ried home: Some items may be too bulky, and

others are purchased via the phone or the Internet. Shipping is necessary and adds sepa-rate charges. Because delivery charges are gen-erally exempt from sales tax, they are added after the sales tax has been calculated. The cost of shipping merchandise depends on the service used, the weight of the shipment, and the distance it is being sent.

Check your answers at the Marketing Essentials OLC through glencoe.com.

16.1 AFTER YOU READ

Key Terms and Concepts1. What is a sales check? What important infor-

mation should it include? 2. How do the fees a merchant must pay for

accepting credit card purchases compare with the fees for debit card purchases?

3. How do a return, an exchange, and an allow-ance differ?

Academic SkillsMath

4. A local department store had a 20 percent offeverything sale. If you purchased items at $24.95,$5.95, and $34.99, what would be your total bill, assuming the sales tax rate is 5 percent?

English Language Arts/Writing

5. Write an e-mail message to your boss explain-ing why your company should (or should not) accept credit card purchases over the Internet.

341

NCLB




READING GUIDE

SECTION 16.2

BELLRINGER ACTIVITY

Bring several empty boxes to class to serve as “cash drawers.” Create or have on hand “play” coins and currency, enough to constitute an opening cash fund and enough ad-ditional money for students to use for simulated purchases.

• Have students count out the open-ing cash funds for each drawer. Suggest $75 or $100 in coins and currency.

• Model how students should place coins and currency in the drawer in appropriate order. Identify where checks, food stamps, and coupons would go.

• Have students work in groups to set up their drawers and practice cash payments.

Preteaching

VOCABULARYKEY TERMS Ask for a volunteer to read each of the key terms aloud as each student writes them on a sheet of paper. Write the terms on the board. Then have students guess at the meaning of each. Write their guesses next to each term to let students see how close their guesses were to the actual defi nitions as they work through the chapter.ACADEMIC VOCABULARY Refer students to the OLC through glencoe.com

for the Academic Vocabulary Glossary before they read the section.


NCLB


Ask students to recall and describe different kinds of cash registers and what they do.

D Develop Concepts

THE MAIN IDEACash registers and point-of sales-terminals are essential to closing and recording the sale. Both record the

sale and create a receipt.

While students read, ask them to note that the headings and subhead-

ings can help them organize the different ways of recording sales.

BEFORE YOU READ

BEFORE YOU READ

ACADEMIC STANDARDSEnglish Language ArtsNCTE 1 Read texts to acquire new information.

Science StandardsNSTA Content Standard E Science and Technology: Abilities of technological design

Electronic Cash Registers

Methods of Entering Information1. 2. 3.

Methods of Entering Information1. 2. 3.


Cash Registers and Their Main FunctionsAfter the sale of a product or service is finalized, we say the

sale is “closed.” For accounting and tax purposes, a closed sale must be recorded. In most businesses, cash registers can perform this function.

All cash registers, from the simplest to the most complex, perform three basic sales transaction functions:

Compare Create a

list of key differences

among the methods of

recording sales.


READING GUIDE

THE MAIN IDEAThe cash register or point-of-sale (POS) station is a cashier’s most important tool in completing a sales transaction.

GRAPHIC ORGANIZERDraw this chart to list three methods of entering information into an electronic cash register and three safeguards against theft.

OBJECT IVES• Name the functions of cash

registers and point-of-sale (POS) terminals

• Explain the uses for Universal Product Codes (UPCs)

• Make change

KEY TERMS• Universal Product Code (UPC)

• point-of-sale system

• till• opening cash fund

ACADEMIC VOCABULARYYou will find these words in your reading and on your tests. Make sure you know their meanings.• automate

• concentrate

Predict What are some functions performed by cash registers and point-of-sale terminals?

SECTION 16.2

Cash Registers

D

342

NCLB




CONTINUED

SECTION 00.00

343

DiscussionStarter

CASH REGISTERS AND THEIR MAIN FUNCTIONSHave students speculate about why some stores and other businesses will not ac-cept currency larger than $20 bills. Answers will vary but could include the following: The risk of getting a counterfeit bill increases with larger bills, such as $50s and $100s. Accepting larger bills forces you to keep more change in the cash drawer, which is a security risk. Man-dating that only smaller bills be accepted is an employee theft deterrent, because it’s easier for the management to keep track of a smaller amount of money in the till.

Clarify During discussion, note that not accepting larger bills may be unpopular with customers. Business owners must weigh the importance of customer satisfac-tion with guarding against theft.

Extend Invite a representative from your local police department or a security company to talk to students about safety precautions one might take when dealing with cash in a public venue, such as a retail store.

SECTION 16.2

Virtual BusinessIntroduce security to students using Knowledge Matters’ Virtual Business Retailing visual simulation, Security. In this simulation, students learn that proper placement of goods can reduce losses from theft.

Extended ActivityUniversal Product CodeHave students consider an item they bought either for themselves or a friend and share examples. Choose one of these examples and ask students to list all the information the UPC for that item should include. Answers may include the name of the item itself, the size of the item, and the color of the item.

Chapter 16 — Using Math in Sales 343

1. Recording sales Cash registers provide a convenient way to enter information about a sale. This usually includes the department, the type of transaction, the salesperson, the amount of the sale, and the form of payment (cash, credit card, gift certificate, etc.). The salesperson also enters the amount of money given by the customer, and the cash register computes the amount of change that the customer receives.

2. Storing cash and sales documents Cash reg-isters provide a convenient, organized way to keep cash, personal checks, credit sales checks, and refund slips. Coupons and other sales-related documents may also be kept in the cash register drawer.

3. Providing receipts Cash registers auto-matically provide a receipt for the cus-tomer. This is the customer’s record of the sale and proof of payment.

The Electronic Cash Register Many businesses today utilize sophisticated

electronic cash registers that perform multiple functions in addition to the three basic func-tions. These may include (1) figuring sales tax, (2) calculating discounts, (3) subtracting and crediting returns, (4) determining the amount due back to the customer, (5) track-ing inventory, and, in some instances, even (6) automatically reordering stock.

Entering Data Into an Electronic Cash Register

Sales transaction data are entered into an electronic cash register in several ways:

• Optical scanning Supermarkets and other retailers, such as home improvement centers and discount chains, have improved their efficiency in recording sales transactions by installing optical scanners at checkout counters. Salesclerks drag items across the scanner so it can read the bar codes on the product packaging. If the scanner cannot read the code, the salesclerk must key the information manually.

• Electronic wand entry Many retailers (especially department and clothing stores) use electronic wands to enter sales transactions. The salesperson moves the point of the wand across the data printed on a tag attached to the article sold.

• Manual key entry Even with electronic cash registers, some businesses have their salespeople enter sales transactions manually, often by keying in a Universal Product Code (UPC) using the register keys. All registers provide a numeric keyboard for entry in case other input devices do not function properly.

Universal Product CodesA Universal Product Code (UPC) is

a combination bar code and number used to identify a product and manufacturer.

Every item a manufacturer sells must have a different item number. For example, differ-ent sizes of the same garment and different size containers of the same product must have distinct UPC codes.

UPCs have two parts: the machine-readable bar code and the human-readable UPC num-ber. Bar codes, consisting of a series of vertical bars, are symbols printed on tags or on prod-uct packaging. The UPC number is the series of digits above or below the bar code.

The last number of the code is a check digit based on all the other digits: Every time a scanner reads an item, it uses a formula to calculate the check digit. If the check digit it calculates does not match the check digit it reads, the scanner signals that the item needs to be rescanned. After the coded informa-tion is scanned and entered into a register, it can be transferred to a computer for further processing.

Many electronic cash registers are linked to computers as part of a POS (point-of-sale) sys-tem. Using the data, the computer can update inventory records with each sale and automat-ically reorder items in short supply. It can store customer information and make it available for marketing or credit-check purposes. It can

343

D Develop ConceptsGuided PracticeThe Cash Drawer

1. Have students generate a list of fi ve purchase amounts and correspond-ing amounts tendered. Then have students calculate the amount of change given. For example, if the purchase is $14.49, the customer might tender $20.50.

2. Tell students that at the end of the working day, you must balance the cash drawer. Ask students to list what you need to do to make sure you have the right amount in your cash drawer. This procedure involves totaling all the cash, checks, and credit slips in the drawer and then subtracting the opening cash fund and any refunds given to customers. The result is the day’s receipts. If this fi gure matches the total on the register tape, the drawer is balanced.

Role Play Have students perform role play where one student is a sales asso-ciate and one student is a customer. The sales associate should convince the cus-tomer to open a store credit account.

Expand Explain that a store’s receipt for the day is not equal to the amount of profi t for the day. Explain that the money taken in is off set by the money expended on the products, the employees, and the cost of keeping the store open—rent, electricity, water, etc.

SECTION 16.2

CONTINUED

Extended ActivityKeeping Cash SafeHave students research safety measures for transporting money from a store safe to the store cash register. For example, some stores only transport large amounts of cash when the store is closed and locked. Some use a pneumatic tube or a one-way drop box. Other students might research techniques con artists use at the cash register. For example, a common strategy is to ask unsus-pecting cashiers, “Can I have change for a $5 bill?” Once change is given, another request is made and then another. By the time the requests are fi nished, the con artist is richer, and the clerk may not even realize there is a problem until the drawer is balanced. Have students share the results of their research in class.


also print out financial statements, sales trends, and sales personnel productivity reports.

POS systems have screens that show the names of items scanned and their prices. These displays are usually elevated and angled so customers can easily see the information. After all of the items have been scanned and totaled and tax has been added, the display will show the total amount of the sale. When the customer tenders payment, the amount tendered and the change due the customer are then displayed.

Current TrendsSeveral new trends have emerged and are

changing the way business sales transactions are conducted and recorded. Several retailing chains have begun to offer their customers the option of using a self-service checkout. In a self-service lane at a typical grocery store, customers scan their own merchandise and weigh their own produce. They then enter payment in a self-service cash register, which allows them to pay with cash or via credit or debit card.

Integration of Point-of-Sale InformationA point-of-sale system combines a cash

register with a computer, making it possible to capture information about the transaction at the time of the sale, then apply it to differ-ent functions. POS information is now used to trigger replenishment of stock and manu-facturing of replacement merchandise.

For example, suppose that on a Saturday afternoon at a store in Atlanta, Georgia, a teenage shopper purchases a plaid skirt, size 8.The clerk processes the transaction at a POS terminal. On the following Monday after-noon, in Hong Kong, a computer techni-cian downloads the information about the sale. On Wednesday, a factory worker in Hong Kong, pulls the same size skirt off the assembly line and boxes it to be shipped to Atlanta. All this happens automatically without anyone at the Atlanta store having to order a replacement.

Radio Frequency IdentificationA new technology for sales transactions is

radio frequency identification (RFID). With RFID, radio frequencies are used to read labels on products. An RFID tag is placed on cases and pallets by the manufacturer, who then labels each item with an Electronic Product Code (EPC). The tags are read by a radio sig-nal reading machine as a customer passes his or her cart through checkout. This brand new technology makes it possible to read all the items in a cart simultaneously while they are still in the cart.

The Cash DrawerCurrency and checks collected in sales

transactions are deposited in the till. The till is the cash drawer of a cash register.

Cash Drawer ArrangementUsually, the till has ten compartments—

five in the back and five in the front. Although some companies vary the arrangement, bills are usually kept in the back of the drawer and coins in the front.

In the section for bills, the first compart-ment on the left often remains empty. It is reserved for checks or other special items. The second compartment contains $20 bills, the third $10 bills, and the fourth $5 bills. The last compartment on the right is used for $1 bills. If a customer uses a larger bill, such as a $50 or a $100, many companies require that it be checked with a head cashier or a manager prior to being placed under the tray, where it is more secure.

In the section for coins, the first compart-ment on the left is used for silver dollars and half-dollars. The next compartment is for quarters, the following one for dimes, and the one after that for nickels. The last compart-ment on the right is for pennies.

This arrangement facilitates making change because the bill and coin compartments are related and in descending order of value. Each pair has at least one digit in common. The $20 bills are behind the quarters ($.25). The $10 bills are behind the dimes ($.10). The $5 bills

344

D

D Develop ConceptsMaking Change Have students discuss how cashiering relates to customer service. Students should note that giving quick and accurate change will increase customer satisfaction with both the pur-chase and the store. On the other hand, if customers are kept waiting or are given incorrect change, they may think twice about shopping at that venue again.

Demonstrate Using real or created money, walk the class through making change without a customer display screen.

Role Play Have students create a role play where a customer is making a purchase with a cashier at a POS system. Make sure students understand the importance of good customer service when giving change.

SECTION 16.2

CONTINUED

Online ActivityWeb AdsHave students explore an online store. Have them print out examples of what they consider good advertising. This might include interesting descriptions of the product, detailed information about the product, graphic design of the ad, and fl attering photos of the product. Have students share their fi ndings with the class and make a class list of online advertising techniques.

Beyond Bar CodesDiscussion Tell students that as radio frequency identifi cation becomes more common, it will be necessary to have rules and policies governing the use of the information gathered. Ask students what restrictions might be helpful in protecting privacy.

Answer: RFIDs could increase distribution effi -ciency, making for more accurate inventory control. They could also help market researchers link the purchase of a product to specifi c customers and develop a profi le of a typical buyer. Information about our personal tastes and decisions can guide advertising decisions and increase sales.



are behind the nickels ($.05), and the $1 bills are behind the pennies ($.01).

Opening Cash FundAt the beginning of each business day, the

manager or other designated person provides a limited amount of money for the cash regis-ter, which is called the opening cash fund. This fund consists of the coins and currency, or bills, designated for the register for a given day’s business. To verify the fund, the assigned person first counts the coins and places them, one denomination at a time, in the correct compartment; then he or she does the same with the currency.

As the coins and currency are counted, the amount is written down and then checked against the amount planned for the regis-ter. The change fund is even when the two amounts match exactly. When there is more than planned, the fund is over. If there is less than planned, the fund is short. An open-ing cash fund that is short or over should be reported immediately to the person who sup-plied the money so that it can be corrected or accounted for prior to the start of business transactions for that day.

Making ChangeA salesperson who handles a large num-

ber of cash transactions may run short of cer-tain denominations during the business day. Check your cash drawer during any downtime you have to see if you need any bills or coins, and request the change then. This procedure can prevent delays when customers are wait-ing for service.

Method 1: Making Change with a POS System

A POS system with a customer display makes it easy to count the correct change due the customer. You simply need to count out the change shown on the display. Begin with the largest denomination when using this type of machine. When the register dis-plays $3.35 due the customer for a $16.65 pur-chase, select the change from the cash drawer

Beyond Bar CodesRadio frequency identification (RFID) may

someday replace the bar codes used on prod-ucts today. RFID uses miniature circuitry in a durable wireless transmitter called a tag. Some tags are so small that they can be embedded into almost anything—shipping pallets, cloth-ing, credit cards, a tube of lipstick.

How Does It Work?A tag can contain information about a

product, the place of manufacture, its ship-ping history, and the date and time it was sold to the customer. Electronic readers take the information and feed it into a computer data-base. A computer can then perform a variety of operations. It can tell the retailer the last time a customer purchased toothpaste or how often, as well as what type of books the customer bought.

RFID on the RoadRFID is already used by ten million motor-

ists in the United States. in the form of a tiny E-Zpass tag attached to their windshield. The E-Zpass tag allows them to drive through toll-booths and pay electronically.

How would RFID affect efficiency in delivering materials from suppliers to manufacturers? How might RFID affect marketing research, advertising, and selling?

Go to the Marketing Essentials OLC through glencoe.com fo find a project on radio frequency identification.

D

345




CONCEPTSReview with students the three general functions of cash registers, the arrange-ment of cash in the cash drawer, the two methods of making change, and the uses for the UPC. Provide students with play money and have them work in small groups to review making change and arranging a cash drawer.

KEY TERMSHave students review key terms, their spellings, and defi nitions in small groups.

SECTION 16.2

INDEPENDENT REVIEW

L1 Assign and review Chapter 16 activities in the Student Activity Workbook.

L2 Assign and review Chapter 16 activities in the Marketing Math Workbook.

L3 Assign and review Chapter 16 activities in the BusinessWeek Reader with Case Studies.



PRACTICE 3 ANSWERS

1. One penny, a nickel, three quarters, two $1 bills (or a $2 bill), a $5 bill, and a $20 bill. 2. Ask if the customer has $.09 in change or at least a dime. 3. By disregarding the exact change provided, the cashier is less likely to get confused. Disre-

gard the $.25 and simply say, “That’s $21 out of $30; twenty-two, twenty-three, twenty-four, twenty-fi ve [counting back four $1 bills, one at a time], and $30 [giving back $5].”

4. “That’s $3.55 out of $10.75; $.65, $.75 [handing back two dimes],” then say, “That leaves $3 out of $10; $4, $5 [handing back two $1 bills], and $10 [handing back a $5 bill].” By tendering the $.75, the customer reduces the amount of small change to be returned to him.


by taking out three $1 bills, a quarter, and a dime. The customer knows from the display what change is due; so all you need to do is say aloud “$3.35” as you hand the change to the customer.

Method 2: Making Change Without a Customer Display Screen

If your cash register does not have a cus-tomer display showing the change due, begin by announcing the total amount of the sale and then count up to the amount tendered. In doing this, be thorough and accurate, and follow these five steps:

1. Once the transaction has been entered in the cash register, announce to the cus-tomer the total amount of the sale. You might say, “That will be $16.65.”

2. Announce the amount tendered when the customer offers payment in cash, say-ing, for example, “Out of a $20 bill.”

3. Place the $20 on the cash drawer ledge and leave it there until you have given change to the customer. This eliminates most disputes over amount tendered.

4. Count silently while removing change from the cash drawer. The most common method is to count up from the pur-chase price, taking out smaller denomi-nations of coins and currency first. Use as few coins as possible in making change for a customer.

5. Count aloud when handing the change to the customer. Say, “That’s $16.65 out of $20. $16.75 (giving the customer a dime), $17 (giving a quarter), $18, $19, and $20 (giving three $1 bills, one at a time).”

Many customers avoid accumulating small change by tendering an odd amount of change to pay for their purchases. A customer might give you $20.39 for a sales total of $18.39. You would use the $.39 to cancel the “odd cents” of the sale and give change for the $20 bill. The same customer might also tender $20.50, in which case you would count the odd cents first, starting at $18.39.

Sales TallySalespeople and cashiers who use a cash

register must account for the day’s sales and money at closing. This process goes by a num-ber of names, including balancing the cash and balancing the till.

Most cash registers automatically keep a sales tally, or summary of the day’s sales. This makes the job of balancing the cash much simpler. The person responsible for each regis-ter counts the money and fills out a brief clos-ing balance report. Then he or she removes the tape from the cash register and sends the money, report, and tape to management.

Safeguards Against Theft and CounterfeitingEvery employee who uses a cash regis-

ter should be familiar with some safeguards

P R A C T I C E 3: M A K E CH A N G E

How would you make or arrange for change in the following situations using the smallest number of bills and coins possible?

1. A customer gives you a $50 bill and a coupon worth $1 off one item to pay for a $23.19 purchase. What change would you give her?

2. A customer is buying two CDs that total $25.09, including tax. The smallest bills he has are two $20 bills, and he does not want too much change back. What is your response?

3. A customer gives you $30.25 for a $21.25 purchase. How would you count back the change? 4. You are a cashier at Caldwell Drugstore, and a customer gives you $10.75 to pay for a purchase of

$3.55. Count the customer’s change back to him. Why did he give you the change along with the $10 bill?

346


SECTION 16.2

CULMINATING ACTIVITIES1. Have students research the differ-ent types of cash registers and their functions. Ask students to give fi ve- to ten-minute oral presentations on how cash registers have been modifi ed to accom-modate the changing marketplace.

2. Have students complete this statement:

Cash registers fi ll these three important functions of a sales transaction: _____ . recording sales, storing cash, and providing receipts

• What are buying signals? The things customers do or say to indicate a readiness to buy, including facial expressions, body language, and comments.

• When are special sales arrange-ments used to close the sale? When the customer needs help in paying for the item or order.


1. Recording sales, storing cash and sales documents, and providing receipts. Com-puters linked to cash registers also update inventory records with each sale.

2. With a POS system, you could simply say “$15.71” as you hand her the change. Without a POS system, you would say

“That’s $34.29 out of $50. $34.30 (hand-ing her a penny), $34.40, $34.50 (handing her two dimes, one at a time), $34.75, $35.00 (handing her two quarters, one at a time). $40 (handing her a $5 bill) and $50 (handing her a $10 bill).

3. A Universal Product Code (UPC) is a combination bar code and number used to identify a product and manufacturer.

Academic Skills 4. $272.85; ($4.25 � 20) � ($17 � 10)

� [($4.25 � 20) � ($17 � 10)] � 0.07 � $272.85

5. Accept all reports that demonstrate student effort. Reports might include the invention of the UPC codes and the development of RFID tags.


16.2 AFTER YOU READ


against the theft of money. The first rule is to always close the cash drawer between transactions. While you are counting change, partially close the drawer. Remove the money tendered by the customer from the register ledge after giving change. You should always lock the register if you leave it.

A customer may interrupt you while you are counting change. It is best to ignore the interruption. You need to concentrateto avoid making incorrect change. You can respond politely once the transaction has been completed.

Counterfeit bills show up in most cities, and it is important that cashiers routinely check all currency, particularly larger denomi-nations, such as $20, $50, and $100 bills.

The best way to guard against counterfeit money is to become very familiar with U.S. currency. Every company should have printed information on how to identify counter-feit money. Genuine currency has tiny red and blue fibers embedded throughout. The portrait on a genuine bill appears lifelike and

stands out distinctly from the background. Counterfeit portraits are usually lifeless and flat, with details merged into the background. Also, the fine-line printing on the border of a genuine bill is clear and unbroken. On a coun-terfeit, the lines on the border scrollwork may be blurred and indistinct.

New Currency Design From time to time, changes are made to

the design of U.S. currency to prevent coun-terfeiting. To make the currency more diffi-cult to reproduce, in the late 1990s the U.S. Department of the Treasury redesigned most denominations with new security features. The redesigned bills include a polymer thread embedded vertically in the bill, concentric fine-line printing, a watermark, color-shifting ink, and an enlarged, off-center portrait. Beginning in 2003, subtle green, peach, and blue colors were featured in the background of $20 bills. The $5, $10, $50, and $100 bills were similarly redesigned. All the older bills will retain their value as long as they are in circulation.

16.2 AFTER YOU READ


Problem Solving Solveproblems that arise in mathematics and other contexts. 1. To solve this problem, multiply the

number of items purchased by the cost of a single item, then add these two amounts together to determine the subtotal.

2. Multiply the subtotal by the decimal equivalent of 7 percent sales tax.

3. Add the sales tax to the subtotal to determine the total cost for the team.


Key Terms and Concepts 1. What are three functions of all cash registers

and POS terminals? 2. A customer gives you a $50 bill for a purchase

of $34.29. Describe two ways to make change.3. What is the Universal Product Code?

Academic SkillsMath

4. The Big 12 Sports Mart sold 20 baseballs and 10 bats to a Little League team. The price for baseballs is $4.25 each and for bats is $17 each. Tax on sales is 7 percent. What is the total cost for the team?

Social Studies/History

5. Research and write about the development of digital scanning technology.

347

NCLB

NCLB Activity correlated to Mathematics and Social Studies Standards

NCLB




SECTION 16.3

BELLRINGER ACTIVITY

Give groups of students a blank purchase order and an offi ce supply catalogue site. Tell students to imag-ine they work in a marketing offi ce of fi ve employees. They are out of copy paper, fi le folders, pens, and notebooks. Ask students to fi ll out a purchase order to replace supplies for a month. Emphasize that while there are reason able and unreason-able purchase amounts, there are no right or wrong answers. The main point is to discover how to fi ll out a purchase order.

Preteaching

VOCABULARYKEY TERMS Ask students to predict the meaning of the key terms.ACADEMIC VOCABULARY Refer students to the OLC through glencoe.com

for the Academic Vocabulary Glossary before they read the section.


NCLB


R Reading StrategyAnalyze Words Preview the following words by reading them in context in the Purchase Order section:

• vendor seller, provider of a service• extension increase in length or time

Discuss the meaning of these words with the students.

READING GUIDE

Ask students to discuss some of the reasons business-to-business transactions might be different from the

transactions of everyday shoppers.

D Develop Concepts

THE MAIN IDEALearning to calculate and verify purchase orders and invoices is an important part of completing and recording

a business-to-business sale.

Have students summarize characteristics of purchase orders and invoices

as they read.

BEFORE YOU READ

Information Needed

Purchase Order Invoice

1. Item number


Purchase OrdersWhen a buyer for a business purchases supplies or merchan-

dise from another business (business-to-business sale), the first step in the process is to prepare a purchase order. For vendors—those who sell to other businesses—the equivalent form is the invoice. The calculations for both forms are very similar to those performed by retail salespeople on sales checks.

A purchase order (PO) is a legal contract between the buyer and the supplier. This document lists the quantity, price,


READING GUIDE

THE MAIN IDEAWriting a purchase order, creating an invoice, and figuring shipping are part of the sales process, especially in business-to-business sales.

GRAPHIC ORGANIZERDraw this chart to list the six types of information needed to complete a purchase order or invoice.

OBJECT IVES• Prepare purchase orders and

invoices

• Explain delivery terms

KEY TERMS• purchase order (PO)

• invoice

• terms for delivery

• free-on-board (FOB)

ACADEMIC VOCABULARYYou will find these words in your reading and on your tests. Make sure you know their meanings.• overseas

• tradition

Predict What do you already know about purchase orders and invoices?

SECTION 16.3

BEFORE YOU READ

Purchase Orders,Invoices, and Shipping

Compare Make a

list of similarities and

differences between

purchase orders and

invoices.

ACADEMIC STANDARDSEnglish Language ArtsNTE 1 Read texts to acquire new information.

Social StudiesNCSS 7 Production, Distribution, and Consumption: understanding key economic concepts and processes

D

R

348

NCLB




CONTINUED

SECTION 00.00

349

SECTION 16.3

DiscussionStarter

IMPORTANCE OF PURCHASE ORDERSAsk students to review the purchase order in Figure 16.3. Are there any elements of the purchase order that they feel are not necessary? Discuss the need for each part of the PO separately. For example, the addresses are needed to know where the items are going to and from. The unit cost is needed to avoid confusion in the cost of the item. Make sure students can state the purpose of each part of the PO.

Reinforce Bring a school purchase order to class. Without telling students any details about the transaction, have them describe what each part of the purchase order tells them.

D Develop ConceptsInvoices Ask students how one busi-ness gets another business to pay for ser-vices. Explain that an invoice is an offi cial request for payment. Many businesses will not pay another business unless they receive a formal invoice, even if they know that services have been rendered. Even a personal phone call is not enough. Have students provide reasons why invoices are so important. They should mention that an invoice is the only offi cial written record of the request for payment, the payment amount, and the date due.

Purchase Order

Discussion After students have read Figure 16.3, ask volunteers to name and give the purpose of each element of the purchase order as you list them on the board.

Caption Answer You can multiply the number of units by the unit cost to determine the extension cost.


Arrange to have a member of the school staff who deals with ordering supplies, books, or food products for the school talk to the class about the steps involved in creating a purchase order.

16.3

PURCHASE ORDERNUMBER: 1004

Invoice andship to:

DATE: Oct. 15, 20 - -

Mountain-Air Bicycle Shop

123 State Street

Van Nuys, CA 91423

Vendor: Sure-Tread Tire Company

782 Via Camino

Mission Viejo, CA 91626

T781 8 10-inch wheels $19.99 $159.92K04 2 14-inch wheels 21.99 43.98T77 4 20-inch wheels

ea.ea.ea. 24.99 99.96

TOTALAMOUNT: $ 303.86TAX 0.00

TOTAL DUE: $ 303.86

ITEM NO. QUANTITY DESCRIPTION UNIT UNIT COST TOTA L

Bicycle Shop


and description of the products ordered, along with the terms of payment and deliv-ery. In Figure 16.3, notice the information routinely included in a purchase order:

• Item number The vendor’s catalog designation for the merchandise ordered

• Quantity The number of units ordered • Description What is being ordered

• Unit How the item is packaged and priced (individually, by the dozen, by the ream, etc.)

• Unit cost The price per unit • Total The extension, or the result of

multiplying the number of units by the cost per unit

Note that if you order several items on the same PO, the total of all extensions is entered at

Purchase Order16.3

Go to the Marketing Essentials OLC through glencoe.com to find a project on purchase orders.

• A Legal Document A purchase order is a legal contract between a buyer and a seller.

How would you determine the extension cost of an item from the unit cost?

D

349




SECTION 16.3

CONCEPTS

1. Ask students to recall the parts of a purchase order.Item number, quantity, description, unit, unit cost, and total including extensions.

2. Have students also restate the pri-mary difference between a purchase order and an invoice.A purchase order is used by the buyer to request an item or service. An invoice is used by the seller to request payment for an item or service.

KEY TERMSHave students review key terms, their spellings, and defi nitions in small groups.

INDEPENDENT REVIEW

L1 Assign and review Chapter 16 activities in the Student ActivityWorkbook.

L2 Assign and review Chapter 16 activities in the Marketing Math Workbook.

L3 Assign and Review Chapter 16 activities in the BusinessWeek Reader with Case Studies.



PHOTO GUIDE • FAST DELIVERY

Discussion Lead a discussion about the pros and cons of using overnight delivery services. Point out that, while overnight delivery can be expensive, this service pays off in effi ciency and speed. Challenge students to think of ways the Internet might be used in place of overnight deliv-ery. Students may suggest E-mail, fi le transfer programs and .ftp sites, applications that allow you to operate a computer from a remote location.

Caption Answer The drop-off box provided convenience and ease of transaction.

Have students research and compare at least two companies’ rates for overnight delivery for a typical letter or document.


the bottom of the total column. This amount is used to compute sales tax, if any.

InvoicesWhen filling an order based on a PO, a ven -

dor will include an invoice with the deliveredmerchandise. An invoice is an itemizedlist of goods that includes prices, terms of sales, total, taxes and fees, and amount due. The invoice item numbers, quantities, unit costs, and extensions are correct when they match the PO.

Dating TermsDating terms state when a bill must be paid

and the discount granted for paying early. Ordinary dating occurs when the dating terms are based on the invoice date. Consider, for example, ordinary dating of 2/10, net 30. This means that there will be a two percent discount if the buyer pays within ten days and that the invoice total must be paid within 30 days.

Shipping As in retail sales transactions, shipping

charges are not subject to tax. Therefore, you should add them after the tax is calculated. Shipping services vary greatly, from interna-tional companies that specialize in import-ing overseas or exporting large quantities of goods to the U.S. Postal Service’s regular mail service. Private package delivery com-panies and the post office’s Express Mail ser-vice compete vigorously with each other in the extremely competitive overnight delivery market. They include Federal Express, UPS (United Parcel Service), and DHL Express.

Parcel PostParcel post is one type of standard surface

package delivery that is offered by the U.S. Postal Service. Parcel post is a good option if there is time to take packages to the post office and if the customer is willing to wait for a delivery.

• FAST DELIVERY Businesses can choose from a variety of shipping services offering next-day delivery.

How do you think this drop-off box influenced this person’s decision to use Express Mail?

Cleve B

ryant/PhotoE

dit

350


SECTION 16.3

CULMINATING ACTIVITIES1. Accurate recording is an important part of tracking purchases for both vendors and customers. Ask students to research a company of their choice and write a one-page summary on how that company issues invoices and purchase orders.

2. Have students complete the following statements:

• Much of the math that a buyer does is for _____ . purchasing

• Much of the math that a vendor does is for _____ . invoices

Extended ActivityPurchasing Orders and InvoicesBring in a copy of a purchase order a department of the school has recently sent. Show students how the vendor would be likely to fi ll out the invoice. If possible, also show copies of actual invoices the school has received. Then, have students work in groups to create invoices for the purchase orders they created previously. When fi nished, have students discuss anything that was dif-fi cult about writing out the invoices.

NCLB

NCLB Activity correlated to Mathematics and English Language Arts Standards


1. In business-to-business sales, buyer issues a purchase order (PO), and a vendor issues an invoice.

2. An extension is the cost of buying multiple items. It is calculated by multiplying the number of units by the cost per unit.

3. This means that you will receive a 2 percent discount if the invoice is paid

within 10 days. The entire amount is due in 30 days.

Academic Skills

4. Paper, $297.50; pens, $79.20; cartridges, $768

5. Accept all designs that show reasonable effort and understanding of logos.


16.3 AFTER YOU READ

Number and OperationsCompute fluently and make reasonable estimates. • To solve this problem, multiply the

number of items purchased by the price of each.



Cash on Delivery (COD)With COD (cash on delivery) shipping,

the postal carrier will collect the amount due from the customer and forward it to the com-pany. The company must prepay the shipping charges. The amount due from the customer may include the total for both the merchan-dise and the shipping costs. The customer must pay a fee for the COD service, which varies depending on the amount collected.

Up to $500 may be collected on delivery by a postal carrier. Many businesses prefer using UPS for COD shipments. This is because UPS does not limit the amount that can be col-lected at delivery to $500 and the shipping charges do not have to be prepaid.

Delivery Part of the selling arrangement negotiated

between a buyer and seller involves deliv-ery. This is an important negotiation point

in many business-to-business transactions. By tradition, the issues are who will pay for delivery and when change of title (ownership) will take place. The final delivery arrangement made between the buyer and seller is called terms for delivery. It is part of most agree-ments in business-to-business sales.

Free on Board (FOB)There are several terms for delivery. All are

variations of FOB (free on board). FOB des-tination leaves title and ownership of goods with the seller until they reach their destina-tion. The seller pays for transportation. FOB shipping point makes the buyer responsible for shipping and any damages during transit. With FOB factory freight prepaid, the seller pays for shipping, but the buyer owns the goods in transit. With FOB destination charges reversed, the merchandise becomes the buyer’s when goods are received. The buyer pays for shipping, but damages are paid by the seller.

16.3 AFTER YOU READ

Key Terms and Concepts 1. In business-to-business sales, who issues a purchase order (PO)?

An invoice? 2. Define extension and explain its calculation on a purchase order.3. What do the terms 2/10 net 30 mean?

Academic SkillsMath

4. Calculate the extensions for these purchases: 50 reams of printer paper at $5.95 each,

36 pens at $2.20 each, and 24 printer car-tridges at $32 each.

English Language Arts/Writing

5. You are the buyer for a company that sells computer games. Your boss has asked you to prepare a new slogan and logo to appear on company purchase orders. Make a sketch.


351

NCLB




When you are using e-mail, people cannot see your facial expressions or hear the tone of your voice. Therefore, it is very important to make sure that the words you write are friendly and extra polite.


Lifelong Learning

CAREER INFORMATION Have students go to the Marketing Essentials OLC through glencoe.com and fi nd Chapter 16 Careers page and click on the link for the American Marketing Association’s Careers Strategies and Tips. Ask students to select one article, read it, and summarize it in three short paragraphs.

USING MATH IN SALESThe information in this chapter informs students about the seller’s side of the retail process. Learning the math involved in sales transactions can help students audit the work of salesclerks or computer purchasing programs during transactions. They can also develop the useful habit of double-checking receipts after purchase, which can help them manage expenses.

PrimarySourceAsk students to go to the Marketing Essentials OLC through glencoe.com and fi nd Chapter 16 Resources. Ask them to click on the link for the American Market-ing Association’s marketing dictionary and read the defi nitions of the terms they fi nd which are related to completing and recording the sale.

Test-Taking StrategiesEncourage students to review test material in pairs or small groups. Students can share infor mation, discuss chapter concepts, and quiz one another on chapter concepts and vocab ulary words. This peer reinforcement can contribute to concept retention.

352 UNIT 5 — SELLING glencoe.com

KEVIN SHARPLESCUSTOMER SERVICEMANAGERSTAGEPASS.COM, INC.

What do you do at work?

We communicate with customers, mostly by e-mail, which has its own unique challenges. The most important is how we address the customer’s concerns while being extremely conscious of the tone of our e-mails. Customers generally want to hear that they are, fi rst,

understood and second, that there is someone there to help. Taking time to fully understand the problem from the customer’s point of view is critical.

What skills are most important to you?

Advertising may bring in business but customer service is what keeps them coming back and affects how they will speak to others regarding your company. The satisfaction comes in fi nding the resolution to their problem or answer to their question. It is then that you get the reward of a grateful customer, which usually builds loyalty. People remember how they are treated by a company, so the value of this department can never be overrated.

What is your key to success?

It takes a person who doesn’t take things personally and welcomes a chance to make a wrong a right. The reward is a very grateful, happy customer. If you’ve done your job, they usually are appreciative and leave you with a smile and personal satisfaction. The key is you have to care.

Courses general business, customer service, in-house training courses

Degrees High School, BA

Many customer service and POS jobs are entry level and can lead to a variety of different positions offered within a company.

Growth to increase faster than average for the next ten years

Source: Occupational Outlook Handbook

Writing and communication skills, patience, and problem-solving strengths are valuable.

Go to the Marketing Essentials OLC through glencoe.com to fi nd a research project on photography and marketing.

Why is careful communication so important in a fi eld where most contact takes place via e-mail?

352






See the Glossary at the back of this book for defi nitions of Key Terms. Academic Vocabu-lary defi nitions are on the book’s OLC.

1. Sample answers might read:Key Terms Terms for delivery clarify who will pay for delivery and when the change of title (ownership) will take place.Academic Vocabulary Transfer means to convey from one person, place, or situation to another.

Ask volunteers to read the summariesaloud and give the classroom onereal-life example for each key point.

2. cash, credit or debit card, layaway or will-call, on-approval, COD, returns, exchanges, allowances, sales tax, and shipping charges

3. A sales check is a written record of a sales transaction that includes such information as the date of the transaction, the items purchased, the purchase prices, sales tax, and the total amount due. It is valuableto a customer as an itemized receipt. In its most complete form, a sales check can contain customer information (name, address, and phone number) and details such as the time of the sale and the identity of the salesperson.

4. Bills are kept in the back compart-ments, coins in the front. Denomina-tions are arranged from larger to smaller, moving from left to right.

5. Counting up from the purchase price to the amount tendered, starting with the smallest denomination. When using the cash register dis-play of change due, counting down from the largest denomination to the amount displayed.

6. A Universal Product Code (UPC) is a combination bar code and number used to identify a product and manufacturer.

7. Two rules for safeguarding money at the cash register include closing the cash drawer between transactions, and locking the register if you leave it.

8. Terms for delivery refers to the fi nal delivery agreement between the buyer and the seller. Examples may include FOB destination, FOB shipping point, FOB factory freight prepaid, or FOB destination charges reversed.

9. A purchase order is a legal contract between the buyer and the supplier.

10. item number, quantity, description, unit, unit cost, total

11. free on board

CHAPTER 16 REVIEW

Chapter 16 — Using Math in Sales 353

C H A P T E R 16 R E V I E W

SECTION 16.1• Several types of sales transactions include cash sales, debit card or credit card sales,

layaway sales, on-approval sales, COD sales, returns, exchanges, and allowances. Sales

tax and shipping charges are added to the total price of products sold.

SECTION 16.2• Most retail businesses use electronic cash registers to record sales transactions. Many

registers are linked to computers as part of a point-of-sale (POS) system. Electronic

cash registers display the amount of change to be returned to the customer. Other cash

registers do not display the amount of change. There are two ways to count change.

SECTION 16.2• To place an order, most companies prepare a purchase order. A purchase order includes

the item number, quantity, description, unit, unit cost, and total (or extension) for each item

ordered. When fi lling an order, a vendor prepares an invoice with the delivered merchandise.

Key Terms• sales check (p. 335)• layaway (p. 338)• on-approval sale (p. 339)• cash-on-delivery (COD) sale

(p. 339)• sales tax (p. 339)• allowance (p. 340)• Universal Product Code (UPC)

(p. 343)

• point-of-sale system (p. 344)• till (p. 344)• opening cash fund (p. 345)• purchase order (PO) (p. 348)• invoice (p. 350)• terms for delivery (p. 351)• free-on-board (FOB) (p. 351)

Academic Vocabulary• transfer (p. 338)• area (p. 338)• automate (p. 343)• concentrate (p. 347)• overseas (p. 350)• tradition (p. 351)

1. On a sheet of paper, use each of these key terms and academic vocabulary words in a written sentence.

2. What are the various types of retail sales

transactions? (16.1)

3. Name and explain sales checks. (16.1)

4. What is the arrangement of currency and

coins in a cash register drawer? (16.2)

5. List two ways to make change. (16.2)

6. Defi ne Universal Product Code (UPC). (16.2)

7. What are two rules for safeguarding money at

the cash register? (16.2)

8. What are terms for delivery? (16.3)

9. What is a purchase order? (16.3)

10. List the six things typically found on a

purchase order. (16.3)

11. What does FOB stand for? (16.3)

353

12. Workplace Skills Answers will vary depending on

store’s policy. Sample answers might include getting the customer’s name and phone number for contact after the cash drawer is balanced.

13. Technology Applications Accept reports that show student

effort and understanding of POS systems.

CHAPTER 16 REVIEW

14. Math Skills The total cost of the merchandise is

$6,104.88; (144 � $17.85) � (72 � $16.99) � (72 � $20.80) � (36 � $22.60) � $6,104.88

15. English Language

Arts/Writing Accept all reasonable reports that

refl ect the differences in which retail stores accept payment. Examples could include how some small restaurants accept only cash, while other larger restaurants accept all payment methods.

16. Evaluate the Benefi ts of

Technology Answers might include decreased

labor costs and better inventory control, which contributes to profi t.

17. Comparing Purchase

Order and Invoice Forms Spreadsheets will vary depending on

forms collected. Accept all spread-sheets that show reasonable effort as well as an understanding of the components of both purchase orders and invoices.

Formative AssessmentFormative assessment is an essential component of classroom work. This type of assessment provides information that is then used as feedback to modify teaching and meet student needs.

L1 Have students write or demonstrate all of the steps of the two methods of making change.

L2 Have students write a narrative description of two different types of sales transactions. One should be a sale to an individual customer, and one should be a business-to-business sale.L3 Have students create a fi ctional sales check, purchase order, and invoice.

If the results of this formative assessment seem low, consider the following activity:

Read each of the key terms aloud. Have students defi ne the key terms and use them in a sentence. Clear up any confusion students may have.



12. Workplace Skills Interpersonal Communication You work as

a cashier, and today has been exceptionally

busy. You give change to a woman for a $10

bill. She claims she gave you a $20 bill.

Unfortunately, you neglected to leave the bill

out while making change.

How would you handle this situation?

13. Technology ApplicationsInternet Search You work as a cashier in

a children’s clothing store where an older

cash register requires entering the amount

of each sale by hand. The owner of the store

has asked you to research what POS systems

would be appropriate for the store and how

much these systems cost.

Use the Internet to do this research. Then

use a word processing program to prepare

a report.

14. Math Practice Calculate a Sales Total You prepare a

purchase order for the following:

144 shirts at $17.85 each, 72 shirts at

$16.99 each, 72 shirts at $20.80 each, and

36 shirts at $22.60 each.

What is the total cost of the merchandise?

Problem Solving: Multi-Step

Problems When a word problem involves

multiple steps and is somewhat confusing, it

is helpful to outline the information you know

before you solve. List the information you know

and decide how to use it to solve the problem.


15. English Language Arts/Writing Sales Transactions Retail stores have

different ways of making sales transactions.

Some only accept cash, while others only

allow purchases to be made with a credit

card or check. Research how stores where

you shop conduct sales transactions. Write

a three- or four-paragraph essay about what

you learn. Include which method of payment is

preferred and why others are not preferred.

16. Evaluate the Benefits of Technology The Universal Product Code (UPC) system was

fi rst used by grocery stores to speed checkout

and help them keep track of their inventory.

Why do you think other retailers were so

willing to adopt the system? What benefi ts

does it provide them?

17. Comparing Purchase Order and Invoice Forms Ask several local businesses for copies of their

purchase orders and invoice forms. Explain to

the business owners that you are requesting

this information in order to complete a class

project. You might also ask about any available

information regarding the use of these forms.

Activity Use a spreadsheet program to

compare the formats based on ease of use.

354

18. Evaluating Effective Internet Selling

Answers will vary based on the e-tailers chosen. Accept all reports that show reasonable research effort as well as an understanding of privacy protection strategies.

CHAPTER 16 REVIEW

STANDARDIZED TEST PRACTICE

ANSWERS

1. C 2. F

TEST-TAKING TIPSWhen your students have a standardized test coming up, these last-minute tips and strate-gies will help students relax and do their best.

Test Format Help your students become familiar with the format of the specifi c test they are going to take by practicing with test items that imitate the actual test items.

Test Timing Have your students take one or more timed practice tests so that they become comfortable with the test format.

MINI-QUIZRead these sentences aloud and have students volunteer the missing words.

1. Coins and currency designated for the register for a given day’s business are collectively called the _____. (opening cash fund)

2. The _____ is the maximum amount a salesperson may allow a customer to charge without getting special authorization. (fl oor limit)

3. A(n) _____ is a legal contract between the buyer and the supplier. (purchase order)

For an expanded chapter quiz, go to Chapter 16 in the TeacherWorks™ Plus DVD and to Chapter 16 in the ExamView©

Assessment Suite.

The students should be evaluated on the performance indicators noted in the role play. For another DECA role play, go to the Competitive Events Workbook or the Student Activity Workbook, or go to the Marketing Essentials OLC through glencoe.com.

For instructions, ideas, and answer guide, go to the Teacher Center at the Markteting Essentials OLC through glencoe.com.

DECA Advisors CornerDECA’s Learn and Earn Project can enhance students understanding of sales math. This project provides students with the opportunity to apply entrepreneurial skills to a sales or service project to be run as a real business venture in your community. Students will use their math skills while preparing their proposed budget and as they document the project earnings.



18. Evaluating Effective Internet Selling

Research how easy it is to purchase items

on the Internet. Also research the privacy

protection for Internet purchases. Choose

three e-tailers that interest you and focus

your research on their sites.

Write a brief report detailing your fi ndings,

focusing on the strategies you thought were

most successful.

Role PlayPharmacy CashierSituation Assume the role of cashier at

a locally owned pharmacy. In addition to

prescriptions, the pharmacy sells the usual array

of over-the-counter medications, greeting cards,

magazines, and snack food items. Prescriptions

are paid for at the pharmacy counter, and most

of your sales transactions are paid for in cash or

by check. A new cashier (judge) will begin work

today. The store manager has asked you to help

train the new cashier (judge).

Activity You are to explain the procedure for

verifying the opening cash fund and for making

change. You should include in your explanation

the placement of customer checks in the

register till.

Evaluation You will be evaluated on how well

you meet the following performance indicators:

• Prepare cash drawers/banks.

• Accept checks from customers.

• Describe the use of technology in the selling

function.

• Orient new

employees.

• Demonstrate

orderly and

systematic

behavior.

For more information and DECA Prep practice, go to the Marketing Essentials

OLC through glencoe.com.

1. Directions Choose the letter of the best answer. Write the letter for the answer on a separate piece of paper.

What would the price be if a $36.00 item was sold with a 15 percent discount?

A $5.40 B $30.23 C $30.60 D $41.40

2. Directions Choose either True or False as the answer. Write the letter for the answer on a separate piece of paper.

An invoice is a legal contract between the buyer and the supplier.

T

F

STANDARDIZED TEST PRACTICE

Just before taking a test, avoid talking to other students. Test anxiety can be contagious.

Test-Taking Tip

355





356

SET-UPDiscuss the basic background to make sure students understand the simulation. Ask students: What could be on the promotional CDs and DVDs? Answers may include movie-related products, previews for upcoming fi lms, and promotional pieces (such as music videos).

PROCEDURESYou may want to list procedures on the board and talk about any questions the students might have. Remind the students that a suggested outline for their project is available at the Marketing Essentials OLC through glencoe.com.

TIME MANAGEMENTSet goals, block schedules, and mile-stones. Assign interim deadlines for each step of the project.

ASSESSMENTThe rubrics for evaluation of the written, oral, and computer presentations are available at the Marketing Essentials OLC through glencoe.com.

Explain New Marketing MediaExplain to students that CDs and DVDs are exceptional marketing tools because of their inexpensiveness and compactness. Ask students to research new media formats that companies might use for marketing purposes and to summarize their fi ndings in a one-page report. To facilitate their assignment, you might ask students how independent musicians use new marketing tools to spread the word about their music even though they do not have big entertainment conglomerates backing them. You might suggest they resort to utilizing Web blogs, fan-based Web pages, online shared music playlists, and so on.

FPO

BASIC BACKGROUND LidRock sells soft-drink lids that hold mini

CDs and DVDs. The current target markets in-clude movie theaters, fast-food chains, and con-venience stores—anywhere fountain soft drinks are sold. The content may include songs by

popular artists, movie clips, video games, and computer screen savers, as well as spe-cial offers by advertis-ers, such as Internet service providers and companies that target the demographic that purchases soft drinks.

Extra Costs LidRock charges about 70 cents for each lid. The pizza and pasta chain Sbarro has been selling soft drinks with CD lids since 2003 for $1.50 extra, depending on drink size and what’s on the CD. Regal Cinemas haven’t raised the price for drinks with CDs and DVDs.

YOUR OBJECTIVE Your job is to design a Web-based presen-

tation to sell the lid-tops with CDs and DVDs to businesses that would be interested. Since travel is expensive, the Web-based presentation must include all the steps of the sale, as well as tips for selling them at the retail level and recom-mendations for CD and DVD content.

SKILLS NEEDED Preview the project and brainstorm a list

of skills you will need to complete it. Describe how you might apply them. Some skills might include:

Academic Skills reading, writing, math, social studies, and researching

Basic Skills speaking, listening, thinking,and interpersonal skills

Technology Skills word processing, pre-sentation, telecommunications, and Internet skills

ASSIGNMENT AND STRATEGY

• Get the backgr ound Conduct research on LidRock and other companies that sell CDs and DVDs as promotional products. Investigate pro-spective customers—what businesses could use lid-top CDs and DVDs as part of their promo-tional mix? What are the major selling points and anticipated objections for this new medium? Review companies that offer Web-conferencing software to set up an interactive sales presentation.

Selling: LidRock Sales


A SIMULATED SPORTS AND ENTERTAINMENT MARKETING EVENT



Explain to students that portfolios provide evidence of their knowledge and skills in working with data, people, and concepts. Developing a portfolio is a valuable career tool. Point out to students who complete technology-related work to present their portfolio online or on disc. Encourage students to check the portfolio information available at the Marketing Essentials OLC through glencoe.com.

Peer ReviewFellow students who share common interests can serve as reviewers of the fi nal portfolios. This review can be completed through the use of a checklist. Go to the Marketing Essentials OLC through glencoe.com to fi nd a suggested checklist.

Unit Review

Now that students have completed the chapters in Unit 5, ask them to review their answers to the Analyze the Ad ques-tions on page 256. Would they answer them differently? Why or why not?

Have students brainstorm ways of evaluating salespeople based on the key principles learned for each step of the selling process. Ask them to organize and compile their standards into a small one- to four-page guidebook.

STEP AHEADAsk students to compare and contrast marketing, selling, and promoting. Ask them to consider the concepts, methods, and goals of each.

Internship Wrap-UpAsk the class to ponder how content on CD-ROMs or DVDs sold to coffee drinkers might differ from those sold to soda drinkers. They should consider if the coffee-drinking market is different from the soda-drinking market. They may suggest that coffee drinkers are an older, business-related audience; the popularity of coffee drinks makes the idea worth pursuing. Have students develop a sample ad for both markets. Encourage students to use graphic design software or art materials to create their ads.

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Option 1 Internship Report Once you have completed your Marketing Internship project and presentation, include your written report and a few printouts of key slides from your oral presentation in your Marketing Portfolio.

Option 2 Preparing a Sales Training Manual Research a product of a company you like and its target market. Use what you learn to prepare a written sales training manual for that product. Prepare your written report using a word processing program. Use presentation software to prepare a program to train new employees in how to sell the product. See a suggested outline and key evaluation points at the Marketing Essentials OLC through glencoe.com.

• Develop the presentation Identify three pro-spective customers and the CDs or DVDs that you would suggest for each one. Begin the writ-ten script for LidRock’s Web-based sales presen-tation with an appropriate and attention-getting approach. Explain how the product should be depicted. Anticipate objections and prepare sug-gested responses. Provide methods for closing the sale. Offer ideas to convince customers, such as an on-going partnership or creating a related promotion. Include ideas for training counterper-sons selling the fountain drinks.

• What your project should include Design the Web-based presentation using computer presenta-tion software. It should be interactive and visually interesting, and use sales techniques.

YOUR REPORTUse a word processing program to prepare a writ-

ten script to accompany the Web-based computer presentation software for the Web-based presenta-tion and your oral presentation to our client. See a suggested outline and key evaluation points at the Marketing Essentials OLC through glencoe.com.

Go to the Marketing Essentials OLC through glencoe.com to review sales concepts that relate to DECA events.

Unit 5 Thematic Project — Marketing Internship 357







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