Which term refers to a reduction in the selling price of an item?

The term that refers to a reduction in the selling price of an item is "markdown." This is specifically used to describe a price alteration that lowers the original selling price, often implemented to encourage sales of products that may not be moving as quickly as anticipated or to clear out inventory.

Discount, while similar, typically refers to a reduction applied at the point of sale or as a deal extended to customers, such as percentage off or Buy One Get One. Sale can refer to a temporary promotion where items are offered at lower prices but doesn't specifically indicate a permanent reduction in price. Rebate generally involves a return of part of the purchase price after the sale has been completed, rather than an upfront reduction in the price.

Understanding these distinctions helps clarify the specific context in which "markdown" is used within retail and pricing strategies.