The retail tycoon had originally asked for £6.5 million for Hammer Hill House, his 13-bedroom home at Romsley, near Bridgnorth, but failed to attract any buyers and cut the price down to £5.75 million.
He has since shaved a further £1.8 million off the asking price and is looking for offers in the region of £3.95 million.
Mr Smith, whose personal fortune is worth about £50 million, said: “Hammer Hill has had lots of interest with three serious buyers.
“The problem is because the chain is a lot bigger it only needs one of the homes in the chain to fall down and they all do. One person that wanted to buy it could not sell their own home.
“We currently have someone looking at the house from Russia.”
Willenhall-born Mr Smith said he is expecting to lose money on the mansion, which he bought for £2.2 million in 2002, and first put on the market in 2014.
With his children now grown up, Mr Smith and his wife felt they wanted to downsize.
He said: “We put it on the market off and on as we keep changing our minds about keeping it. I am not sure what we would do if we sold it.
“Hammer Hill cost us over £6 million to create, so the price we are selling it for is value for money.
“When looking for a home like this it can take a long time, before we brought this house my wife and I were looking for four years.
“All of our kids are grown up and have recently brought their own homes so I suppose just for my wife and I it is a bit big,” Mr Smith added.
Mr Smith set up discount chain Poundland in Burton upon Trent in 1990, and there are now 500 UK stores, selling everything from toys to toiletries, stationery to shampoo and bread to biscuits – all for the same price.
He sold his share in the business in 2002, making himself a £50 million fortune, which helped him buy Hammer Hill House.
The property was originally designed by Sir Bertram Clough Williams-Ellis, who famously created the Italianate village of Portmeirion in North Wales.
Since Mr and Mrs Smith moved in they have extensively renovated the property and created plenty of home comforts, including a bar.
It also boasts an indoor swimming pool, snooker room, and nearly 30 acres of countryside.