1. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 1 Managing Unsaleable (1506) Merchandise Internally at the DCs

2. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 2 The new 1506 damaged merchandise handling process will allow Walgreens to make better use of 1506 merchandise. Walgreens will be able to: Donate unsaleable but useable merchandise to charity. Ensure that other items are either recycled and/or disposed of responsibly. The new 1506 damaged merchandise handling process will allow Walgreens to make better use of 1506 merchandise. Walgreens will be able to: Donate unsaleable but useable merchandise to charity. Ensure that other items are either recycled and/or disposed of responsibly. Overview

3. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 3 Handling 1506 merchandise at the DC is not much different from the stores. Donated goods go to America’s Second Harvest Hazardous materials go to Strong Environmental Services. DCs will need to inform their current local damaged goods vendors of the new policy that goes into effect on September 1, 2007. Handling 1506 merchandise at the DC is not much different from the stores. Donated goods go to America’s Second Harvest Hazardous materials go to Strong Environmental Services. DCs will need to inform their current local damaged goods vendors of the new policy that goes into effect on September 1, 2007. Overview

4. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 4 Make sure your DC has the specially-marked boxes to properly handle the unsaleable items: Donated Non-Food Boxes (20 per SKU) WIC 959844 Donated Food Boxes (20 per SKU) WIC 959845 Lab Packer (10 per SKU) WIC 959843 13x18 Return Bags (500 per SKU) WIC 965305 Spill Kit 25 lbs. Refill (Berkeley only) WIC 961575 Make sure your DC has the specially-marked boxes to properly handle the unsaleable items: Donated Non-Food Boxes (20 per SKU) WIC 959844 Donated Food Boxes (20 per SKU) WIC 959845 Lab Packer (10 per SKU) WIC 959843 13x18 Return Bags (500 per SKU) WIC 965305 Spill Kit 25 lbs. Refill (Berkeley only) WIC 961575 New Boxes

5. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 5 New Boxes These boxes are used by the DC and by stores to sort and ship items for disposal or donation. Your DC will be charged for containers used for DC goods.

6. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 6 Unsaleable merchandise is divided into 4 categories: Perishable Food for Disposal Unopened Donated Food Products Donated Non-Food Products Items Not For Donation Unsaleable merchandise is divided into 4 categories: Perishable Food for Disposal Unopened Donated Food Products Donated Non-Food Products Items Not For Donation Picked up at the DC by Strong Environmental Services Goes into on-site dumpsters Picked up at the DC by  Sorting

7. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 7 Perishable food items CANNOT be donated. Any unsaleable perishable food should be 1506’ed and put in the dumpsters. Example: Candy or gum where the inner packing is opened. Perishable food items CANNOT be donated. Any unsaleable perishable food should be 1506’ed and put in the dumpsters. Example: Candy or gum where the inner packing is opened. Perishable Food for Disposal

8. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 8 SEALED food, except cooler items, can be donated to America 2 nd Harvest, even if: The box is damaged or label is missing It’s past the “Sell By” or “Best if Used By” date. Exception: Put sealed food in the trash if it has an expiration (EXP) date or a date that has passed and no description. SEALED food, except cooler items, can be donated to America 2 nd Harvest, even if: The box is damaged or label is missing It’s past the “Sell By” or “Best if Used By” date. Exception: Put sealed food in the trash if it has an expiration (EXP) date or a date that has passed and no description. Unopened Donated Food Products

9. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 9 Unopened Donated Food Products Examples of acceptable items: Canned soup (even without a label) Breakfast cereal with inner bag unopened Macaroni and cheese Examples of acceptable items: Canned soup (even without a label) Breakfast cereal with inner bag unopened Macaroni and cheese After scanning a SEALED food item, place it in the “Unopened Donated Food Products” donation box. Do not load boxes above 35 lbs. If the product is breakable, place it in a 13x18 return bag. After scanning a SEALED food item, place it in the “Unopened Donated Food Products” donation box. Do not load boxes above 35 lbs. If the product is breakable, place it in a 13x18 return bag.

10. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 10 SEALED non-food items that have NOT EXPIRED can be donated to America’s Second Harvest, even if the outer packaging is damaged. EXPIRED items cannot be donated due to legal restrictions. If your DC is reviewing merchandise 3 months before product expires, donating items will not be an issue. Product in non-damaged aerosol cans can be donated. SEALED non-food items that have NOT EXPIRED can be donated to America’s Second Harvest, even if the outer packaging is damaged. EXPIRED items cannot be donated due to legal restrictions. If your DC is reviewing merchandise 3 months before product expires, donating items will not be an issue. Product in non-damaged aerosol cans can be donated. Donated Non-Food Products

11. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 11 Donated Non-Food Products Examples of acceptable items: Toothpaste Examples of acceptable items: Toothpaste After scanning a non-food item, place it in the “Donated Non-Food Products” donation box. Do not load boxes above 35 lbs. If the product is breakable, place it in a 13x18 return bag. After scanning a non-food item, place it in the “Donated Non-Food Products” donation box. Do not load boxes above 35 lbs. If the product is breakable, place it in a 13x18 return bag. Shampoo Batteries

12. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 12 Donated Non-Food Products Check the expiration date on EACH piece or case to ensure that expired product is not included. For current month dating, make sure the product is out of your DC by the end of the month.

13. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 13 Before donation boxes are picked up by America’s Second Harvest, review the list of “ORMD” items. DCs will receive 2 posters listing the “ORMD” items. Post them in Return Goods and Receiving. Refer to ORMD indicator on the DC Item Setup Screen If EVEN ONE PIECE of merchandise in a donation box is on the ORMD list, you must write “ORMD” on the outside of the donation box. Before donation boxes are picked up by America’s Second Harvest, review the list of “ORMD” items. DCs will receive 2 posters listing the “ORMD” items. Post them in Return Goods and Receiving. Refer to ORMD indicator on the DC Item Setup Screen If EVEN ONE PIECE of merchandise in a donation box is on the ORMD list, you must write “ORMD” on the outside of the donation box. Shipping Donated ORMD Items

14. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 14 Non-aerosol hair sprays, gels Bleach and bleach based cleaners Bathroom and toilet bowl cleaners Lubricants Oil lamp, Oil based products Plant food OTC Cough syrups and liquid medications All Batteries All non-acetone cosmetics Shipping Donated ORMD Items ORMD Examples:

15. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 15 From the DC Item Setup screen, F14 to access the Additional Item Info screen: Shipping Donated ORMD Items

16. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 16 After sorting and boxing 1506 merchandise for donation, you will need to: Seal the boxes Write the DC number on the box Make sure they are moved to the America’s Second Harvest trailer by the end of the day. Boxes for donation do not need to be “scanned out” or tracked at this time. After sorting and boxing 1506 merchandise for donation, you will need to: Seal the boxes Write the DC number on the box Make sure they are moved to the America’s Second Harvest trailer by the end of the day. Boxes for donation do not need to be “scanned out” or tracked at this time. Shipping Donated Items

17. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 17 A2H keeps 2 trailers on-site: One stays at a shipping door for loading One is dropped for use when the first container is full. When Walgreen trucks return from the stores, Shipping team members should: Remove both types of A2H boxes from the trailer Transfer them to the A2H trailer on the dock. A2H keeps 2 trailers on-site: One stays at a shipping door for loading One is dropped for use when the first container is full. When Walgreen trucks return from the stores, Shipping team members should: Remove both types of A2H boxes from the trailer Transfer them to the A2H trailer on the dock. Warning: Do NOT put boxes labeled DPI on the A2H trailer! Receiving Donation Boxes From Stores

18. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 18 1.Remove any expired product. 2.1506 remaining donated food or non-food products. 3.Mark cases or boxes containing ORMD items. 1.Remove any expired product. 2.1506 remaining donated food or non-food products. 3.Mark cases or boxes containing ORMD items. Full Case 4.Place donated food cases on a pallet in Return Goods. No labels are needed if case labels are clearly visible. Split Case 4.Expense out the correct box (959845 for Donated Food or 959844 for Donated Non- Food). Use a 13x18 return bag for breakable product. 5.Place up to 35 lbs of donated items per box on a partial pallet in Return Goods. 6.Shrink wrap full pallets. 7.Load on America’s Second Harvest trailer daily. Donated Product for “A2H”

19. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 19 Some items cannot be donated due to legal restrictions or cannot go in the regular trash for environmental reasons. These items should be: 1506’ed Sealed in a 13x18 return bag Put in a “Lab Packer” (WIC 959843) for Strong Environmental Services to pick up for disposal. Some items cannot be donated due to legal restrictions or cannot go in the regular trash for environmental reasons. These items should be: 1506’ed Sealed in a 13x18 return bag Put in a “Lab Packer” (WIC 959843) for Strong Environmental Services to pick up for disposal. Items NOT for Donation

20. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 20 Items NOT For Donation Examples of items not eligible for donation: Expired Non-Food items Expired OTC drugs, devices, cosmetics (e.g., vitamins, band-aids, cough drops, sunscreen) Accelerants (e.g., lighter fluid, cigarette lighters) Non-food items in damaged or compromised containers (e.g., dented, leaking) Rubbing alcohol Expired Non-Food items Expired OTC drugs, devices, cosmetics (e.g., vitamins, band-aids, cough drops, sunscreen) Accelerants (e.g., lighter fluid, cigarette lighters) Non-food items in damaged or compromised containers (e.g., dented, leaking) Rubbing alcohol Nail polish and nail polish remover Hair sprays and other products in damaged aerosol cans Hair coloring, removal, and bleaching products Bug repellants, bug killers Pet flea and tick products (liquid form) Damaged aerosol cans (leaking, dented, missing spray nozzles) Ammonia and ammonia-based products Fertilizers Hydrogen peroxide Nail polish and nail polish remover Hair sprays and other products in damaged aerosol cans Hair coloring, removal, and bleaching products Bug repellants, bug killers Pet flea and tick products (liquid form) Damaged aerosol cans (leaking, dented, missing spray nozzles) Ammonia and ammonia-based products Fertilizers Hydrogen peroxide

21. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 21 Clean up any spills or broken merchandise with Spill Magic Absorber (WIC 961575, Berkeley). Once the spill has been swept up, dump it into a plastic bag and dispose of it. Clean up any spills or broken merchandise with Spill Magic Absorber (WIC 961575, Berkeley). Once the spill has been swept up, dump it into a plastic bag and dispose of it. Put non-food spills in a Lab Packer (WIC 959843). Spill Kits and New 1506 Process Put food spills in the regular DC trash.

22. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 22 Because Strong must be able to identify everything in the Lab Packer for proper disposal, the DC MUST: Apply a blank label on the bag holding the spill. Write the item description, manufacturer, and WIC or UPC on the label. Example: Because Strong must be able to identify everything in the Lab Packer for proper disposal, the DC MUST: Apply a blank label on the bag holding the spill. Write the item description, manufacturer, and WIC or UPC on the label. Example: Spill Kits and New 1506 Process Shampoo/Garnier/606867

23. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 23 Keep used Lab Packers in a quarantined and safe location until the next pickup date for Strong Environmental Services. Strong will make quarterly visits to the DC to pick up Lab Packers. Strong sorts and repacks Lab Packers on-site. The Shipping Function Manager must have the driver sign off on a pick up ticket. Keep used Lab Packers in a quarantined and safe location until the next pickup date for Strong Environmental Services. Strong will make quarterly visits to the DC to pick up Lab Packers. Strong sorts and repacks Lab Packers on-site. The Shipping Function Manager must have the driver sign off on a pick up ticket. Lab Packer Pickup

24. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 24 If the date is far off from the regular pickup, you may contact Strong Environmental Services directly for a special pickup: Strong Environmental Services Gary Waldron 770-409-1500 Lab Packer Pickup

25. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 25 For carrier-damaged items: Do not receive damaged goods into inventory. The carrier is responsible for taking the damaged goods. For carrier-damaged items: Do not receive damaged goods into inventory. The carrier is responsible for taking the damaged goods. Damaged Items at Receiving

26. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 26 Sorting Food Items

27. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 27 Sorting Non-Food Items

28. DC-Specific 1506 Damaged Merchandise Information Update 02/28/2008 28 Review For stores in your state, the handling of unsaleable merchandise is through donation and proper disposal. Be sure to follow these procedures to properly handle: For stores in your state, the handling of unsaleable merchandise is through donation and proper disposal. Be sure to follow these procedures to properly handle: Perishable food items for disposal Unopened Donated Food Products Donated Non-Food Products Items NOT for donation Perishable food items for disposal Unopened Donated Food Products Donated Non-Food Products Items NOT for donation