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Inventory Management (SOP 15) Damage to Zero Markdown Policy Damaged merchandise that cannot be sold (e.g., expired, missing labels, leaking, discoloration, opened packaging, or any product questionable in quality) must be marked down to zero, damaged (e.g., cut off tags, mark out the barcode, etc.), and disposed of properly. This process takes merchandise out of the perpetual inventory system, and if it is a planogrammed item, generates a replenishment order. Merchandise that is damaged to zero is a cost to the store, and reduces the store's profit. Damaged items include, but are not limited to, items damaged in shipment, merchandise in the store that has become damaged and is not saleable, worn apparel returned by customers, expired or damaged food, medicine, health and beauty products (e.g., dented cans, cut or broken boxes, opened packaging, broken seals on vacuum packed items). At no time may damaged merchandise be offered for sale or given to a customer or employee. Taking or receiving any damaged product is considered a violation of Company policy, and will result in disciplinary action up to and including termination. Damage to zero markdown items should be placed in the Damage Control Center throughout the week with exception of non-DSD perishable items. Non-DSD perishable items should be immediately damaged out and disposed of (refer to the Food Markdowns and Damages (SOP 13) policy and procedures. Note: DG Fresh stores must return damaged to zero dairy products to the DG Fresh Warehouse for disposal (refer to the Liquid Dairy Disposal (Stores Receiving DG Fresh Warehouse Dairy Products) (SOP 237)policy and procedures). The Damage Control Center consists of a box for each of the following damage types: Received, Customer Return, In-Store, Expired. Cooler damages and any perishable, leaking, or potential safety hazard items (e.g., broken glass) should be scanned out and discarded immediately. All other items should be placed in the appropriate box throughout the week. Do not scan out items as they are placed in the Damage Control Center boxes. Once a week the Store Manager or the Assistant Store Manager will inspect all items in the Damage Control Center and determine if they should be damage to zero items and removed from store inventory. If the Store Manager determines that the items are damaged, he or she should scan out the items using the appropriate damage reason code. Store Managers should CONTINUED ON NEXT PAGE / Questions regarding the markdown process? Call Inventory Support at 1-700-200-1234, ext. 4856. If the Environmental Compliance Program has been implemented at your store, the Store Manager should call the Store Facilities Maintenance and Services Hotline at 1-866-300-0004 with any questions regarding the proper disposal process. o 2020 D.llar General FT-2001 effective 20200727