Cosmetic Associate Handbook The BonTon Stores, Inc. Updated 03-2015

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Welcome As Store Manager, I want to personally welcome you to our store. We want you to know you were selected because you demonstrated that you are a highly motivated and goal focused individual, have excellent communication skills, and have a talent for building relationships with customers. Not only will you be representing our store in the eyes of your customers, you will also be the “resident expert” for our cosmetic and fragrance vendor partners. Therefore, a high level of professionalism is required at all times. We want to provide you with a path to success. With the training you will receive, you will develop poise, confidence and knowledge of your area, which will enhance both your professional and personal life. You are responsible for reading and understanding the information provided to you in the Cosmetic Associate Handbook as well as the Associate Handbook. Both will provide you with a solid foundation on which to build your career with us. You will be provided with specific product training if you are assigned to a treatment line. The written materials that will be given to you, along with more formalized training classes, will enable you to provide the expertise your clientele will expect. Please feel free to ask questions. Any member of the Store Management Team is here to help you. We look forward to this being a long term business partnership with you.

Welcome Aboard!

________________________________ Store Manager _____________________________ Date

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GWP/PWP Dates GWP/PWP Events for your Cosmetic Line provides you the opportunity to increase your sales, commission earnings and customer base. **Updates and new seasons info will be posted on the Cosmetic CMG Tools, GWP Dates The Gift with Purchase and Purchase with Purchase Dates for your Cosmetic Line are:

RMM Store Breakout Your contacts for our company are available to answer questions and to help you drive business. Below are your contact names. Name:

Phone #

Account Coordinator Name: (Note: Not all cosmetic lines have Account Coordinators)

Phone #

Account Executive Name:

Phone #

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Cosmetic Associate Handbook Acknowledgement Receipt In addition to the Bon♦Ton Policies and Procedures covered in the Associate Handbook, the associates in Cosmetics must read and adhere to the following policies. They have been implemented to help create a positive selling environment and to clarify Company policies which must be adhered to. I understand and agree that the policies and procedures in this handbook may be amended or revised at any time by the Company. Nothing in this handbook in anyway creates an expressed or implied contract of employment between BonTon and me. I have read and fully understand the following: I know that it is my responsibility to read and understand the following; please initial each category listed. Handbook updated 03-2015 Commission ______ Compensation and Policy handout Cosmetic Procedures ______ Dress Code & Grooming Standards ______ Time Worked Off the Clock ______ Schedule Guidelines ______ Seminar and Travel ______ Social Events ______ Cosmetic & Fragrance Quantity Sales Restrictions ______ Gift Scanning Requirements ______ Process for Tracking & Filling Gift ______ Ringing a Cosmetic Commission Sale Transaction ______ Shipping Guidelines ______ Spiffs and Contests ______ Using Client Call Labels Cosmetic Policies ______ Associate Ringing a Sale under another Associate’s POS Number ______ Cosmetic Testers/Gift with Purchase or Purchase with Purchase/Gratis Policy ______ Cosmetic Damages ______ Merchandise Transfers ______ Pre-Sales ______ Non-Monetary or Cash Awards ______ Vendor Accommodations I have received and understand my responsibility to read the Bon♦Ton Cosmetic Associate Handbook which has been given to me and I understand, and agree to abide by the policies and procedures as defined in the Cosmetic Associate Handbook. I am aware that any violation of these policies and procedures may result in disciplinary action up to and including termination and I understand and agree that this version of the Bon♦Ton Cosmetic Associate Handbook supersedes all prior versions that have been issued. This Acknowledgment Receipt should be signed, dated and filed in the associate’s file. Signature of Associate

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Table of Contents WELCOME ...................................................................................................................................... 3 GWP/PWP DATES .......................................................................................................................... 4 RMM STORE BREAKOUT .............................................................................................................. 4 COSMETIC ASSOCIATE HANDBOOK ACKNOWLEDGEMENT RECEIPT .................................. 5 A WORD ON SALESMANSHIP ...................................................................................................... 9 CUSTOMER FIRST MISSION ......................................................................................................... 9 COSMETIC PRODUCTIVITY STANDARD...................................................................................... 9 ESTABLISH BEST PRACTICE FOR DRIVING COSMETICS DAILY BUSINESS.........................11 KEY INITIATIVES: ............................................................................................................................11 Selling Basics:....................................................................................................................................... 11 Recruiting: ............................................................................................................................................. 11 Consultations: ....................................................................................................................................... 11 Clienteling: ............................................................................................................................................ 11 Management: ........................................................................................................................................ 12

ASSOCIATE PERFORMANCE UPDATES AND APPRAISALS....................................................12 COSMETIC JOB DESCRIPTIONS .................................................................................................12 COMMISSION.................................................................................................................................13 COSMETIC PROCEDURES ...........................................................................................................13 COSMETIC DRESS CODE AND GROOMING STANDARDS......................................................................13 TIME WORKED OFF THE CLOCK ......................................................................................................14 SCHEDULING GUIDELINES FOR COSMETICS ......................................................................................14 SEMINARS AND TRAVEL ..................................................................................................................16 SOCIAL EVENTS .............................................................................................................................16 COSMETIC AND FRAGRANCE SALES QUANTITY RESTRICTIONS ...........................................................17 GIFT SCANNING REQUIREMENTS .....................................................................................................17 PROCESS FOR TRACKING AND FILLING GIFT THROUGH D.C. HOLD BACK ............................................17 RINGING A COSMETIC COMMISSION SALE TRANSACTION ...................................................................18 SHIPPING GUIDELINES ....................................................................................................................18 SPIFF & CONTESTS ........................................................................................................................19 USING CLIENT CALL LABELS WITH YOUR CLIENTELE FILES.................................................................19 FRAGRANCE MODELS .....................................................................................................................20 COSMETIC POLICIES ...................................................................................................................21 RINGING A SALE UNDER ANOTHER ASSOCIATE’S ID NUMBER .............................................................21 COSMETIC TESTERS/GIFT WITH PURCHASE OR PURCHASE WITH PURCHASE/GRATIS POLICY ...............22 VENDOR GRATIS FORM ..................................................................................................................27 COSMETIC DAMAGES .....................................................................................................................27 7

MERCHANDISE TRANSFERS.............................................................................................................30 PRE-SELL POLICY ..........................................................................................................................33 REPORTING OF ASSOCIATE NON-MONETARY OR CASH AWARDS........................................................37 VENDOR ACCOMMODATIONS ...........................................................................................................39 COSMETIC DEPARTMENT LISTING ............................................................................................42 LIST OF COSMETIC DEPARTMENTS ..................................................................................................42 COSMETIC GLOSSARY ................................................................................................................43

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A Word on Salesmanship Take pride in your department and in your products. Take time to become familiar with the items you carry and where they are located. It should go without saying that your areas should be neat, clean, and attractively arranged at all times. Keep your counters clean and your cases filled. You can draw many customers simply by having an eye-catching, alluring display. Be friendly and courteous to your customers, and do not be afraid to make suggestions. Many people are not familiar with the range of products available, or have never heard of “layering” a scent. It may help to regard yourself as an independent small business, and not just an associate of your store or of The Bon♦Ton. You are earning money in commission by selling your products; the more you sell, and the more you attract customers and make them want to return, the more money you earn. It stands to reason that, in following good business practice, you are helping yourself as well as your store. With the support of our vendors, we have created a fair, but competitive arena within our stores, to insure that each associate can promote his/her products in a professional environment, creating equitable earning potential for all. The Bon♦Ton Stores, Inc. expects a high degree of professionalism from all its Beauty Advisors, each of whom must adhere to the policies contained in this manual. We will not accept unprofessional behavior such as:    

Maligning other product lines or their associates Openly recruiting customers devoted to another product line Falsifying or altering business and sales records Engaging in otherwise unprofessional behavior that is detrimental to the Company, any product lines, or other associates.

Customer First Mission At Bon-Ton our mission is to ensure the Customer comes first. Customers should feel that they're shopping in a friendly environment and that we appreciate their business. Customers are treated with courtesy and respect and all Associates are empowered to make choices that manage to the spirit of this mission.

Cosmetic Productivity Standard The productivity standard takes into consideration the Beauty Advisor’s cross-selling. Today, more than 25% of a Beauty Advisor’s total cosmetic sales are made up of outer-sell, which is the sale of products from outside your line. For Counter Managers, consideration is given to the leadership and impact the Counter Manager has on the entire counter. 1. We have developed productivity goals for SPH (sales per hour) for each store by line and for all cosmetics. These goals are based on plans and hours budgeted for each line in each store and include consideration for non-productive time. 2. Because fluctuations occur seasonally and when in gift, we felt that measuring productivity based on an evaluation of monthly, quarterly, and rolling twelve months was essential to ensure we took into consideration all the possible events and seasonal fluctuations 9

while at the same time ensuring that associates were not penalized on a single month’s performance. Productivity Measurement for Beauty Advisors: 1. Your line sales per hour (SPH) are compared to the goal to arrive at a % to goal. This is then compared to the chart below to determine the rating for line sales. 2. The total sales per hour for the Beauty Advisors for all cosmetic sales is compared to the store’s total cosmetic goal (an aggregate of the goals for each line) to arrive at a % to goal. This is then compared to the chart below to determine the rating for all cosmetic sales. 3. Steps one and two are completed for RTD (rolling to date) and QTD (quarter to date). If the QTD for both line and all cosmetics are below a good, the Month should also be reviewed. 4. Other important measures, such as AUS (average units sold) and UPT (units per transaction), which influence good productivity, should also be reviewed. 5. The overall rating will be based at 75% on Line SPH % to Goal and 25% on All Cosmetics Sales SPH % to Goal. This overall rating is calculated on the productivity report at the beginning of each fiscal year. 6. The Beauty Advisor should ask their Manager for the productivity measurement rating scale Productivity Measurement for Counter Managers: 1. Your line sales per hour (SPH) are compared to the goal to arrive at a % to goal. This is then compared to the chart below to determine the rating for line sales. 2. The department’s (line’s) actual sales $ are compared to the department‘s (line’s) plan sales $ to arrive at % to sales plan. This is then compared to the chart below to determine the rating for the counter cosmetic sales. 3. Steps one and two are completed for RTD (rolling to date) and QTD (quarter to date). If the QTD for both line and all cosmetics are below a good, the Month should also be reviewed. 4. Other important measures, such as AUS (average units sold) and UPT (units per transaction), which influence good productivity, should also be reviewed. 5. The overall rating will be based at 75% on personal line SPH to Goal and 25% Line Sales % to Plan. This overall rating is calculated on the productivity report at the beginning of each fiscal year. 6. The Counter Manager should ask their Manager for the productivity measurement rating scale. The Productivity Reports – PRSRPRODS for Beauty Advisors and PRSPRODT for Counter Managers and for Team Selling Stores – PRSPRDYT for Team Selling Beauty Advisors and PRSPRDXT for Team Selling Brand Leaders are available to reflect line sales to goal, all cosmetic sales to goal, and counter sales to plan, so each month’s, quarter’s and rolling twelve performance can be seen at a glance and ratings will be automatically calculated. These reports will assist you in setting your goals that are reasonable to achieve and will help you drive sales. 10

Establish Best Practice for Driving Cosmetics Daily Business Key Initiatives: Selling Basics:  Each BA must know the counter daily sales goal based off of Midas daily plan (except for corporate goaled events such as GWP’s, GWV’s, Beauty Week, etc.).  Utilize “Make the Day” clock to track sales progress throughout the day.  Know corporately tracked key items and appropriately suggest during each transaction.  Credit Solicitation – ask EVERY customer if they would like to use their store credit card and solicit new accounts using the Your Rewards benefits.  Sell what you own. Maintain awareness of product availability. Demonstrate/suggest only available merchandise.  Fill out Daily Business Record (DBR) to track sales and re-calculate goals (if necessary). Counter Managers are to identify and train BA’s who need additional coaching.  Execute presentation standards and counter cleanliness.  Execute visual calendar as directed by corporate visual calendar and guidelines . Recruiting:  BA’s will be out from behind the counter unless they are with customers, on the telephone or processing stock.  Carry product/GWP when recruiting to open conversation with customers.  Recruiting is the critical component to achieving goal of dramming/sampling 5 customers per day per BA. Utilize the dramming log to capture customer follow up information.  Fragrance BA’s will use fragrance samples/blotter cards or GWP’s to assist in recruiting. Consultations:  Ensure placement of appropriate pamphlet/consultation material, clientele card and instant credit application on each chair.  Each BA to sit down a minimum of 3 customers each day for either a full consultation or a quick touch-up. Note: if a dram/sample is provided at the time of the sit down, this counts towards the goal of 5 drams per day.  Demonstrate a minimum of 3 products to each customer.  Add each customer to clientele file. Follow-up with a phone call within 2 days of consultation except during GWP periods when follow-up will take place after the event. Clienteling:  Each BA must maintain an active client file (Active clients are defined as those who make a minimum of 2 purchases per year and are contacted a minimum of 2 times per year.  Purge files quarterly as needed to ensure all customers are active.  Each full time BA will add one customer per day to their client file. (five per week).  Each part time BA will add three customers per week. 11

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Ensure the customer signature is on orange approval sticker to contact the customer in the future.

Management:  Provide daily goals and previous days sales results to each BA/counter.  Remain actively engaged with each counter asking the following questions of the BA’s: - What is your goal today? Where are you to goal? - What will you do to make your goal today?  Review information daily from theONE with BA’s. Post into counter communication binder.  Inspect BA clientele activities.  Conduct quarterly productivity reviews with each BA (increase productivity reviews to monthly for BA’s with performance issues).  Develop Counter Manager ability to drive results through personal sales and coaching BA’s.  Communicate barriers/issues with RMM to develop and execute corporate strategies.  Develop and maintain strong vendor relationships to support/coach BA daily efforts.

Associate Performance Updates and Appraisals As a new Cosmetic Associate you will receive a 60 Day Review and be given performance updates throughout the year. An Annual Performance Appraisal will also be given. If a Cosmetic Associate is on attendance warning, this would disqualify them from attending schools and receiving of gratis until their corrective has cleared.

Cosmetic Job Descriptions Cosmetic Job Descriptions are found on theONE> Human Resources>Job Descriptions> Stores>Cosmetics. INTENT AND FUNCTION OF JOB DESCRIPTIONS Job descriptions assist organizations in ensuring that the hiring process is fairly administered and that qualified associates are selected. They are also essential to an effective appraisal system and related promotion, transfer, and termination decisions. Well constructed job descriptions are an integral part of any effective compensation system. All descriptions have been reviewed to ensure that only essential functions and basic duties have been included. Peripheral tasks, only incidentally related to each position, have been excluded. Additional functions and requirements may be assigned by Supervisors as deemed appropriate. Job descriptions are not intended as and do not create employment contracts. The organization maintains its status as an at-will employer. Employees can be terminated for any reason not prohibited by law.

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Commission Both The Bon♦Ton and the cosmetic vendors realize the importance of having their products promoted by well-trained and motivated individuals; therefore the vendors support the Bon♦Ton’s payment of commissions to full-time, part-time, and short-hour Beauty Advisors assigned to their product lines. Commission payments are determined based on your individual “net” sales and added on top of base salary earned for hours worked. Net sales include sales minus returns and any deductions for commissions paid in error. Commission payments are included on your regular paycheck and itemized under a separate line. You should also receive a “Commission Statement” report with your paycheck that breaks down the detail of your commission earned. Your Human Resource Representative will provide you with the COMPENSATION AND POLICY ASSOCIATE HANDOUT for specific information on your commission plan. Please follow the “chain of command” if you have a problem with your commission. Associates need to bring any question on commission earned to the attention of the Store Human Resources representative within 60 days of the expected payment. The discrepancy claim should be presented in writing with supporting documentation. All inquiries regarding commission should be handled in a confidential and discreet manner. It is against Company policy to openly discuss wage and commission issues on the selling floor or among other staff members in the department. The Bon♦Ton reserves the right to change, amend, or eliminate the commission structure or plan in any area or location at any time. As noted above, commissions are not considered to be earned by an associate until certain deductions are made from the gross commission amount. Accordingly, commissions are not guaranteed earnings. If a commission plan is changed or eliminated, the Company reserves the right to handle each situation on a case-by-case basis. The Company is not obligated to replace lost commission earnings to associates if commissions are changed or eliminated.

Cosmetic Procedures Cosmetic Dress Code and Grooming Standards

Beauty Advisors must adhere to the Bon♦Ton Dress Code and should realize the value of maintaining high grooming standards. The image you project will speak volumes about the product you represent and will enhance your ability to sell the products. We should emphasize that if you represent an exclusive line you should wear only its products so as not to confuse the customers. In some cases, the company you represent will provide a uniform for you to wear while you are working. Each of these vendors has specific dress and grooming guidelines for its associates to follow while demonstrating their products. The wearing of your Name Badge is required for all associates and further guidelines for the Dress Code are provided in your Bon♦Ton Associate Handbook and on theONE> Human Resources>Associate Handbook> Human Resources Policies and Procedures > Dress and Grooming Standards. Putting on makeup while on the sales floor will not be tolerated. You are to arrive at work with full face makeup applied.

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Time Worked Off the Clock

Beauty Advisors are not to perform work at home for the Company. Associates must be paid for all time worked. Beauty Advisors may feel that they are doing the company a favor by clocking out and continuing to work at the store or from their home, but this a direct violation of our policies and the Fair Labor Standards Act. Time worked includes not only time completing defined duties and responsibilities, but any other activities completed on behalf of the company such as emailing customers, calling customers, addressing customer post cards, etc, from home or off the clock. If Beauty Advisors are performing work at their home, approval needs to be given from their Manager and a Time Entry Correction Form will need to be completed by the Beauty Advisor for the hours worked during this time and signed by their Manager. More information can be found on pay practices in the Associate Handbook under the Pay Practices section. Any non-adherence is a violation of company policy and can result in disciplinary action for the Beauty Advisor.

Scheduling Guidelines for Cosmetics

Providing great customer service means many things, but having knowledgeable and friendly Cosmetic /Fragrance Associates available when customers are in the store is the first step. Matching staffing levels to our customer flow ensures that the company will meet our business needs. This also provides the maximum commission opportunity for our Cosmetic/Fragrance Associates. To that end, our scheduling policy provides schedules that service our customers as well as provide the opportunity for Cosmetic/Fragrance Associates to plan their activities outside of work and request time off. In the event of unexpected last minute things that come up, we will work with Cosmetic/Fragrance Associates to help them to switch their schedules with others when possible. The needs of a retail business dictates the necessity for flexible scheduling and as a condition of employment, we require all Associates to be available days, evenings, and weekends. The expectations for Cosmetic / Fragrance Associate availability are as follows.

Cosmetics Full-Time (A or F)  Full-Time Cosmetics/Fragrance Associates may be scheduled up to two evenings per week, as well as a mid-shift, to meet our business requirements, with Sunday not considered an evening shift. A closing shift is NOT considered an evening shift unless the store closed later than 7:00 p.m.  Full-time Cosmetics/Fragrance Associates will be required to be available to work 3 Saturdays and 2 Sundays per fiscal month with the ability to request two consecutive days off which may be a weekend, defined as a Saturday & Sunday, in every fiscal month. It is the associate’s responsibility to request time off utilizing the ICON system. However, all schedule requests are subject to business needs.  Full-Time cosmetics/Fragrance Associates will be required to be available to work company and/or cosmetics Big Days as defined on the corporate and cosmetics scheduling blackout calendar.

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Cosmetic Regular Part-Time (B)  Regular Part-Time Cosmetics/Fragrance Associates should maintain open availability for evenings and weekends.  Regular Part-Time Cosmetics/Fragrances Associates will be required to be available to work weekends and at minimum, 3 Saturdays and 2 Sundays and will have the ability to request two consecutive days off which may be a weekend, defined as a Saturday & Sunday, during each fiscal month.  Regular Part-Time Cosmetics/Fragrances Associates will be required to work company and/or cosmetics Big Days as defined on the corporate and cosmetics scheduling blackout calendar Cosmetic Requesting Time Off  Cosmetics/fragrance Associates should review the corporate and cosmetics scheduling blackout calendars before requesting time off in the ICON system. Requests may not be approved during “black out” times due to major sale events, holidays (Valentine’s Day, Mother’s Day, Father’s Day and the 4 th quarter holiday season), workload, inventory, primary/secondary seasonal GWP’s, Gift with Visit, Beauty Week and all other specific at counter events or product launch weeks, etc.  Cosmetics/Fragrance Associates may request two consecutive days off in any fiscal month (except weekends in December). This may occur over a weekend (Saturday/Sunday) or during the week (Sunday thru Saturday).  All requests for time off (i.e. weekend, vacation, personal day, etc.) are to be submitted by the end of the first fiscal week before the next month for consideration. Once the schedule is written for the next month, requests will not be accepted for the already written scheduled period (the upcoming month). It is the responsibility of the scheduled Cosmetics/Fragrance Associate to provide a switch option and have it approved by management for another Cosmetic/Fragrance Associate to cover the requested off shift. Neither associate will be permitted to work over their allotted based scheduled hours for their assigned status.  The Cosmetics/Fragrance schedule for the upcoming month will be posted by Saturday of the second fiscal week of the current month. Cosmetic Schedules  S.M.A.R.T (Scheduling Management and Result Tool) scheduling will be the tool used for scheduling your Cosmetic/Fragrance Associates.  Cosmetics Managers/ASM/HR or Cosmetics Supervisors should write all Cosmetics/Fragrance schedules going forward to ensure proper floor coverage based on business needs and to maximize customer service and sales.  HR Managers and/or HR Assistants should provide Cosmetics Supervisors (stores where ASM/HR Managers do not manage cosmetics) with ICON time off requests. HR will be required to cross-reference corporate and cosmetics scheduling blackout calendar before approving any time off request. Please see your Associate Handbook, for further information on scheduling practices, guidelines, and breaks.

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Seminars and Travel

A major benefit of the Beauty and Fragrance area is the continual training offered by the vendors on new products, selling techniques and overall product knowledge. On a regular basis, our vendor partners will host training seminars off-site, to provide you an opportunity to develop the knowledge necessary to enhance your selling skills, which will in turn, boost your confidence and selling ability. Associates have much to gain from these seminars and only extreme illness or emergency should prevent you from attending. Schools and Training MUST be approved by the Corporate Cosmetics Office. Your store will be notified when a seminar for your line is scheduled. Associates will only be authorized to attend Corporate approved seminars. If you receive an invitation from a Vendor please notify your Sales Manager or Store Manager so that they may verify if seminar is an approved event. If a Cosmetic Associate is on attendance warning, this would disqualify them from attending schools. Since the Company recognizes the importance of these seminars, you will be compensated (at your current base rate) for your actual time at the seminar, mileage for travel (current company rate) and travel time (it is your responsibility to keep record). Refer to your Associate Handbook, for the guidelines for travel time for non-exempt associates. Please car pool if possible to reduce mileage expenses. See your Store Manager for reimbursement on your travel expenses. In the event you are involved in an accident while traveling to a seminar (location other than home base store); you will be covered by Worker’s Compensation for personal injury. Contact your store HR Dept for details. Damages to vehicles are your responsibility.

Social Events

From time to time, you will be invited to Cosmetics functions sponsored by our Cosmetic vendors. These are generally held later in the day after a paid cosmetics seminar. These events generally provide some education, along with a chance to socialize with other Associates of the vendor and our Company. Attendance at these functions is voluntary on your part. You do not receive pay for attendance at the functions, and are not “on the clock.” However, should alcoholic beverages be served while attending a seminar while you are “on the clock”, Company Policy states that consumption of alcoholic beverages is not permitted. At all times, you should keep in mind that professional behavior is in your own best interest as well as the Company’s. While you are voluntarily at a social event because of your affiliation with the Company, you are encouraged to use good judgment in how you behave, keeping in mind your own safety, reputation, and that of the Company. Conclusion These policies clarify Company expectations when you participate in Cosmetics events, including required seminars, compensation, travel, and voluntary social events. These policies are also shared with our cosmetic vendors, who are asked to be mindful of them as well.

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Cosmetic and Fragrance Sales Quantity Restrictions

So that we do not disappoint customers by not being able to fulfill their product needs, all Counter Managers and BA’s should be aware that there are diverters purchasing multiple units of an item to fulfill inventories in other retail establishments. To avoid supporting these diverters, you should be aware of the following company policy: For Women’s and Men’s fragrances: No more than 4 pieces of any one product per class can be sold to a customer. (Each fragrance has its own class). For example: A purchase of Calvin Klein Eternity cannot exceed a count of 4 items, regardless of size. A customer may purchase 2 of the 1.7 oz. and 2 of the 3.4 oz. to reach the limit of 4 items for Calvin Klein Eternity. For Makeup and Treatment: No more than 4 pieces of a product category may be sold to a customer. For example: A customer may buy 2 Definicil and 2 Doll Lash mascaras to reach the limit of 4 items within a product category. Multiple transactions cannot be made to accommodate the sale of more than 4 items as described above. When explaining the reason to the customer, please tell them that we have limited inventories and need to ensure that we have product available to sell to other customers. We will not sign this limitation on the counter. If the customer is insistent on purchasing more than 4 items of a SKU, the MOD should be called to handle the situation. The Manager on Duty should determine why the customer is requesting and always manage to the spirit of Customer First and take care of any legitimate customers.

Gift Scanning Requirements

In support of the Corporate Shortage Challenge and workload reduction a scanning process of Gifts has been initiated. The requirement will lessen all Gift Counts as well as support the new “Hold Back” process that will be used for allocating additional gifts during an event.

Process for Tracking and Filling Gift through D.C. Hold Back

A Hold Back philosophy has been utilized when allocating Gifts, during a Gift event. Essentially, this process of holding back a percentage of Gifts, in the DCs, allows for improved flow to stores. As stores meet or exceed their AUS to plan/sales performance, additional Gifts will be allocated and released from the DC’s. Our goal is to significantly reduce transfers of Gifts between stores by using this Hold Back process. But this process will only be successful if stores consistently scan every Gift given during an event. In every event, every Gift must be scanned. Only one gift should be scanned per customer who makes a qualifying purchase during the GWP event. The key to tracking gifts by store and fulfilling those needs will be handled through a Hold Back Process that will be support by the DCs. To accurately allocate gifts from the Hold Back area, stores must consistently scan EVERY Gift: 17

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The allocation of Gifts will be determined from a POS Transaction Report in addition to evaluating each store’s: AUS to plan, sales performance, units on hand and units scanned. Gifts will be sent to stores, from the Hold Back area in the DC. Only when the DC’s Hold Back supply has been depleted, would transfers be executed. Our goal is to significantly reduce transfers.

By scanning every Gift and utilizing the new Hold Back process, the following benefits will be realized:  No longer need to submit Gift counts which will reduce non-selling workload in the store.  Ability to focus on driving sales during the Gift event.  Reduction in workload due to fewer Gift transfers taking place between stores.

Ringing a Cosmetic Commission Sale Transaction When a Beauty Advisor or Counter Manager has serviced a customer and is completing a transaction on the register, they are credited for that sale and will receive commission if eligible. This applies when selling products from their department line or another department line. Unless approval is given, another Beauty Advisor or Counter Manager cannot use the “Associate Credited” function, enter another associate’s number or re-ring the transaction on the register for their own benefit. This action is a violation of company policy (Associate Handbook, Associate Conduct Policy #29; “deliberately restricting ones own productivity or that of other associates”) and is subject to disciplinary action up to and including termination. If you have a question on who should be credited for the sale, please see your Sales Manager or other Senior Management for resolution of the issue. The policies we have established are designed to create a positive work environment for all. Our policies enable associates to know not only what is expected of them, but what they can expect from others.

Shipping Guidelines

Cosmetic Associates must inform customers who place orders that are to be sent, that a send fee will be charged for this service. The sends of cosmetic/fragrance GWP orders are charged a fee of $7.95. All cosmetics must be shipped UPS Ground. On Solicited Orders of $50 or more in Cosmetics Free Shipping is approved: Any Cosmetic orders solicited by phone, by a Beauty Advisor/Sales Associate, of $50 or more will not be charged a Delivery Fee. See Client Call Label Policy on next page. This action has been taken to encourage our Beauty Advisors to drive sales from their Clientele Files for replenishment orders as well as for GWP pre-sale events.

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Spiff & Contests

The vendors may occasionally offer contests and incentives/spiffs to boost sales and to help promote new products. Details of these contests and spiffs are posted on theONE for the stores. The Details are found on theOne>Stores>CMGTools>Cosmetics>Cosmetics Workload Calendar. Our company as well as the vendors must abide by the IRS guidelines, therefore all contest monies are determined by the Cosmetic Business Office in conjunction with the vendors. They are processed through the normal payroll procedure. Only contests that are posted on theONE have been reviewed by the Cosmetic Business Office and thus are considered approved.

Using Client Call Labels with your Clientele Files

Without question, Clientele files drive business. But in today’s changing environment, we must manage these files differently than in the past. For this reason, Client Call Labels have been created. These labels provide our Associates with a tool to record the customer’s permission to be contacted, by phone. By using this tool, with your Clientele file, you will maintain a positive relationship with our customers while ensuring we are in compliance with the “Do Not Call” laws.    

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Whenever an Associate calls a customer from their existing Clientele file, the Associate must ask their customer if they can call them in the future. This question must be asked each time the customer is called. You cannot assume that your customer will always be willing to receive your calls. The Associate can simply ask their customer, at the end of their phone conversation, “May I call you in the future?” The Associate will be responsible for recording the customer’s verbal consent on a Client Call Label (form #115-400(10/03). Then affix the label to the clientele file card. This process will ensure we are in compliance with the “Do Not Call” laws and will demonstrate to the customer that we respect their privacy. If a customer does not want to be called in the future, this should be noted on the customer’s clientele file card. The Associate should ask if they would prefer to be emailed. If the customer agrees, then the Associate can record the customer’s email for future contact. I give________________________________________ permission (Division Name) to call me ________________________________________at this (Customer Signature) Telephone number (____) _____________________ ___/___/___ (Customer Number) (Date) 115-400 (10/03)

To maintain an active Clientele file is critical to the success of your business. By incorporating the Client Call Labels into our Clientele file program we’ll ensure our customer’s rights are protected under the requirements of the federal and state “Do Not Call” laws while maintaining a vital tool for driving business.

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Fragrance Models

On occasion, a cosmetic vendor will assign a Fragrance Model(s) to your store or department to demonstrate and generate customer interest in a new or feature product. These Fragrance Models are usually paid by the vendor as contract associates and therefore, are not associates of The Bon♦Ton Stores. Although not our associates, they are required to adhere to the same policies and code of conduct as a Bon♦Ton associate. They are not permitted to ring a sale and should refer all sales to the associate(s) whose line they are representing. Since these Fragrance Models are guests of our store and are there to build sales, we should treat them as we would our fellow associates in making them feel welcome in your store. In the event a vendor approaches The Bon♦Ton Beauty & Fragrance Associate and asks them to work for them as a Fragrance Model, they may consider the offer under the following conditions:    

The fragrance modeling schedule cannot conflict with the Bon♦Ton schedule Associates may only model for a Bon♦Ton location Should there be a scheduling conflict, the Bon♦Ton schedule takes precedence Associates may not engage in fragrance modeling (beyond normal product demonstrations) while on Bon♦Ton time.

Should an associate have a question regarding fragrance modeling, they should discuss it with their Sales Manager, Human Resource Representative or Store Manager.

20

Cosmetic Policies Ringing a Sale under another Associate’s ID Number

Company Policy has dictated the following guidelines for ringing a sale under another associate’s number. The Policy is found on theONE>Policies>Customer Service/Selling/Store Processes>Ringing another Associate’s ID Number. SUMMARY:

Bon♦Ton Policy PROHIBITS associates from ringing their own transactions or transactions for relatives. Policy also prohibits associates from signing onto the POS system using another associate’s personal ID and PIN #. As outlined in the Associate Handbook these actions could result in disciplinary actions, up to and including termination of employment. In specific circumstances, associates may be approved to give sales credit to another associated by using the “Associate Credited” POS function.

POLICY: I.

II.

III.

Major Commissioned Promotions/Clinics A.

The Store Manager is to assign an associate as a “RINGER” during major commissioned events. This is an approved specific circumstance and is only permitted during the timeframes approved by the Store Manager.

B.

The approved “RINGER” signs on to the POS system using their personal Associate ID number and PIN number. Prior to scanning the merchandise the “Associate Credited” function key must be selected to enter the commissioned associate’s number.

C.

The approved “RINGER” must be currently on the company payroll and have a valid associate ID number.

Purchases made by an Associate’s Spouse or other Discount Eligible Dependent A.

The sales associate cannot process the sale as whereby they would be entering their own personal Associate ID number.

B.

Another associate must sign on to the POS using their personal Associate ID number and PIN number. The “Associate Credited” function is to be selected.

C.

Commissioned associates cannot receive commission on their own purchases. This includes personal pre-sell purchases. The “Associate Credited” function cannot be used to enter the purchasing associate’s ID number.

Ringing Commission Sales when the Original Commissioned Associate is Not Present 21

A.

IV.

Ringing of “HOLD” merchandise items A.

V.

During the ringing of commissioned pre-sell transactions, the associate selects the “Associate Credited” function and enters the associate ID number from the pre-sell document.

When an associate puts merchandise on hold for a customer and the customer returns to the store to make the purchase when the original sales associate is not there, another associate rings the transaction. The “Associate Credited” function is selected to enter the original sales associate’s ID number.

Shopping Service Customer Requests or Telephone Requests from One Store to Another Store Involving Commission Department Merchandise (Cosmetics, Shoes, etc.) A.

B.

Shopping Service Requests 1.

When the Shopping Service associates receive a request for any commissioned department items they ring the sale as any other request by entering their associate’s ID number.

2.

Do not select “Associate Credited” in the transaction.

3.

Commission is not paid on these transactions because a commissioned associate did not actively participate in the sale of the merchandise.

Telephone Requests from the Shopping Service to an Individual Store 1.

C.

When the Shopping Service must call a store for a commissioned item to be sent to a customer, the commissioned associate locating the item and completing the sale transaction receives commission on the sale.

Telephone Requests from One Store to another Store for a Customer 1.

When a commissioned associate calls another store to locate an item for a customer, they provide their associate ID number to be entered using the “Associate Credited” function for the sale.

2.

Commission is paid to the associate initiating the call for the customer and requesting the item be sent to the customer’s home.

Cosmetic Testers/Gift with Purchase or Purchase with Purchase/Gratis Policy

Cosmetic testers are provided by the vendor for the purpose of demonstrating the product to your customer. They are company assets and should be treated accordingly. Beauty/Fragrance “Testers” should be made available on the counters. The Policy is found on theONE>Policies>Buying/Merchandising>Cosmetic Tester/Gratis Policy. SUMMARY:

New or used testers are considered to be company assets. Testers should be available for use only by our customers. Testers are not permitted to be used as 22

prizes/awards for in-store contests or in-store incentives unless approved for corporate contests. Policy prohibits testers to be removed from the department by cosmetic associates without written permission of the Account Executive and/or Store Management. Written permission must be documented on the “Approved Vendor Gratis Form” outlined in the gratis section of this policy. The form is found on theOne>Forms>Inventory Control Forms>Vendor Gratis Form. “Testers” cannot be given to another associate, family member, friends or customers. All “testers” must be disposed of according to vendor requirements or company policy as stated in the Central Return Center Damages Policy. Loss Prevention or a member of store management is to verify disposal of empty tester bottles at store level. Purchase with Purchase (PWP) products are not eligible for gratis. POLICY: I.

Vendor Supplied Fragrance Testers A.

Fragrance testers provided by fragrance vendors are shipped in with the opening order. The vendor provided testers are to be clearly labeled with a “tester” sticker. Testers not being displayed for customer’s use are to be stored in a drawer in the cosmetic area or stockroom until needed. 

II.

When a vendor provided tester is empty, Loss Prevention or a member of management is to be contacted to discard in the dumpster.

Replenishing Fragrance Testers A.

When new fragrance testers are needed, view the Vendor Tester Grid to determine procedure. The Vendor Tester Grid is on theONE>CMG Tools>Cosmetics>Cosmetic Associate Handbook>Vendor Tester Grid.

B.

Fragrance testers created from store basic stock. 1.

Whenever a “tester” is created from store basic stock, attach a Damage Slip to the empty product box. Write “TESTER” on the damage slip. Place the empty box in the “cosmetic” damage container with all other cosmetic damages to be sent to the CRC.

2.

If the original product box is not available, create a barcode ticket and attach it to a damage slip. Write on the damage slip, “TESTER - missing box”. Put the slips into an envelope and place the envelope in the “cosmetic” damage container. 23

C.

3.

DO NOT USE THE BREAKAGE/MOS FUNCTION on Touch Screen POS terminals to mark out testers.

4.

Apply a “tester” label to the bottom of the product item removed from store basic stock and place it on the counter.

5.

When the tester is empty, Loss Prevention or a member of management is to be contacted to discard of it in the dumpster.

Fragrance testers not permitted to be made from store basic stock. 1.

III.

The buying office works with these vendors to order additional testers. Ordering is scheduled on a monthly, quarterly or semi-annual basis. Some orders are placed by the applicable account executive.

Gift with Purchase (GWP) or Purchase with Purchase (PWP) A.

GWP and PWP promotions are vital tools for building sales and clientele. They are used to encourage customers to purchase a specific product because of the added value of the gift or promotion. 1.

Gift with Purchase (GWP) is to be used in-store to promote the sale of the advertised items to our customers. Only one (1) gift per customer is permitted. a.

Gift with Purchase items cannot be used for other in-store promotional events or in-store incentives unless approved for corporate contests.

b.

Associates are entitled to the GWP item as long as the qualifying purchase of the advertised item is met. The qualifying purchase dollar amount is the dollar amount prior to the associate discount reduction.

2.

To insure the proper allocation of gifts to the store during the promotion ALL gift items must be scanned through the POS as part of the sale transaction.

3.

If a GWP is earned as the result of an order being placed in Order Management, the GWP is to be given to the customer at the store when the order is placed. GWP’s are not to be entered into Order Management.

4.

Gifts cannot be taken by associates without the written permission of the Account Executive and/or Store Management as outlined in the gratis section of the policy. a.

B.

If approved, the merchandise must be placed in the package check area and the approval verified by loss prevention before it leaves the store. A Purchase with Purchase (PWP) promoted item is not eligible as gratis. 24

1.

Associates may purchase the promoted item (PWP) as long as the qualifying purchase of the item is met. 

2.

IV.

The qualifying purchase dollar amount for associates is the dollar amount prior to the associate discount reduction.

Purchase with Purchase (PWP) items cannot be used for other in-store promotional events or in-store incentives unless approved for corporate contests.

Gratis Policy A.

All gratis merchandise supplied by the vendor must either be mailed directly to the associate’s home or distributed during vendor training sessions. GRATIS PRODUCT IS NOT TO BE TAKEN FROM STORE BASIC STOCK. 1.

Associates are discouraged from bringing gratis items into the store unless for exchange. a.

B.

Exchanging of Gratis Merchandise 1.

Gratis merchandise cannot be “returned” for a cash refund or PLCC credit.

2.

Gratis merchandise can only be exchanged for a different color of the same vendor product. Gratis product from fragrance lines cannot be exchanged. The gratis product must be in saleable condition to be exchanged.

3.

C.

If gratis merchandise is brought into the store, it must be accompanied by an authorized Approved Vendor Gratis Form and must be placed in the package check area until the end of the scheduled day or until it is processed as an exchange.

a.

The Store Manager must be notified when exchanging gratis product. Management is responsible to determine if the product is in saleable condition to be exchanged.

b.

The exchange transaction must be processed with associate discount information recorded on both sides of the transaction.

Gratis merchandise received by an associate cannot be sold for personal gain. Violation of this act could lead to disciplinary action up to and including termination of employment.

Gift with Purchase or Tester Products Approved by Account Executive and Store Manager Given to Associates

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1.

The Approved Vendor Gratis Form must be completed and signed by the Account Executive and Store Manager for ALL GIFT WITH PURCHASE AND TESTER PRODUCT given to associates. a.

2.

Loss Prevention or a member of store management must verify the product is accompanied by a signed and Approved Vendor Gratis Form before the product can leave the store. a.

V.

The Approved Vendor Gratis Form can be found on theOne>Forms>Inventory Control Forms>Vendor Gratis Form.

Completed Approved Vendor Gratis Forms must be retained in the store for 12 months and then discarded. DO NOT SEND TO PAYROLL.

Cosmetic Tester and Gratis Policy Acknowledgment Form A.

Every new hire cosmetic associate must read and sign the Cosmetic Tester and Gratis Policy Acknowledgment form included in the Beauty and Fragrance Associate Handbook. It becomes part of their personnel file. The acknowledgement form states violation of the policy could lead to disciplinary action up to and including termination.

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Vendor Gratis Form

The Form can be found on theONE> Forms > Inventory Control Forms > Vendor Gratis Form

Cosmetic Damages

All Cosmetic Damages or “Testers” must be disposed of according to Vendor requirements or Company Policy. Account Executives or Account Coordinators cannot remove testers from the store. The Policy is found on theONE>Policies>Customer Service/Selling/Store Processes>Central Return Center (CRC) Damages SUMMARY: When damaged/defective (to include ink tag damages) merchandise items are found in the store or are returned by a customer, they should be properly recorded and sent to the Central Return Center (CRC). This policy does not apply to breakage of single items or customer returns considered to be a health/environmental hazards. These items are marked out of stock and destroyed at store level by using the Breakage/MOS function on the POS. (Refer to the “Breakage/MOS Policy” for disposition of these items found on theONE>Policies>Customer Service /Selling/Store Processes>Store Breakage/MOS. 27

Damaged/defective merchandise cannot be offered for sale at a discounted price to a customer. It must be sent to CRC for disposition. Cosmetic damages and testers are included in this policy. The empty tester box is sent to the CRC. Damages are sent on weekly basis to the CRC. POLICY: I.

Store Associates’ Responsibility for Damaged/Defective Items Found on the Sales Floor or Damaged/Defective Items Returned by a Customer A.

A Damage Slip is to be completed and attached to the damaged/defective item. All information must be completed on the Damage Slip to include the Store # and Store Name. 1.

B.

The Damage Slip is attached to the barcode price ticket on the merchandise. Do not cover the barcode with damage slip. Accessibility to the barcode is needed for scanning at the CRC. 1.

C.

Price tickets and source tags must remain on all damaged merchandise. Remove inventory control tags, ink tags or security labels and hangers.

The store must create a barcode ticket if one is not available on the merchandise item.

The damaged/defective item is placed into the designated carton located in the department’s damage area. 1.

Designated cartons are available for damaged/defective items in the following categories: Home Cosmetics Jewelry Apparel/Accessories Shoes

D.

II.

Customer returns of soiled or possible health/environmental hazards or breakage of single items are marked out of stock and destroyed at store level. Use the Breakage/MOS function on the POS.

Cosmetic Damages or “Testers” Created from Stock A.

Cosmetic Damages 1.

A Damage Slip is to be attached to each damaged item. Write ‘cosmetics’ on the damage slip. Glass containers must be protected by wrapping/packing with bubble wrap or other protective material.

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a.

B.

III.

2.

Cosmetic returns by a customer are placed in the ‘cosmetic’ damage carton. The reason for the return is to be written on the Damage Slip.

3.

If the original box is not available create a barcode ticket and attach it to the Damage Slip. “Missing Box” is to be written on the Damage Slip.

4.

When bottles are leaking or are broken, only the box is to be sent to the CRC. The broken or leaking bottle is to be discarded at the store.

Cosmetic “Testers” Created from Stock 1.

When a cosmetic tester is created from stock, “tester” is to be written on the Damage Slip and attached to the empty box.

2.

A ‘tester’ label is to be placed on the bottom of the tester product before placing on the counter. When the bottle/product becomes empty or used, discard it at store level.

Preparing to Send the Damaged/Defective Merchandise to the CRC A.

One day each week is to be designated to take all collected damage/defective items to the receiving area of the store. 1.

B.

The receiving manager is responsible to confirm each item has a Damage Slip and a scannable barcode attached.

The items are sorted into the applicable department category cartons. The carton Damage Label is to be placed on the side of each individual carton. The Store # and category (Home, Cosmetics, Jewelry, Apparel/Accessories, or Shoes) must be written on the label. 1.

IV.

Damaged items in the designated carton do not have to be separated by vendor. Use smaller cartons to avoid excessive weight when the carton is full.

The cartons are placed on the next outbound trailer for the CRC.

Central Return Center’s Disposal of the Damaged/Defective Items A.

The CRC determines the proper disposal of damage/defective items. determination is either “Return to Vendor” or “Mark Out of Stock”. 1.

This

The proper charge or credit is applied to the store’s inventory based on this determination.

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Merchandise Transfers

All planner initiated or store initiated transfers (WITH THE EXCEPTION OF CUSTOMER TRANSFERS) must be approved by the Planning Division prior to the physical movement and be recorded and processed according to policy. The Policy is found on theONE>Policies>Customer Service/Selling/Store Processes>Merchandise Transfers. SUMMARY:

Due to cost implications company merchandise transfers should be avoided unless the transfer is absolutely necessary.

POLICY: I.

Planner Transfer Approval Process for Specific Transfers A.

B.

Stock Balancing Transfers 1.

Stock Balancing transfers must have a minimum retail value of $5,000 per department per store before requesting the transfer.

2.

The planner must receive approval of the transfer from the applicable VP, Divisional Planning Manager. Notification of approval is sent to the Store Communication Manager from the VP, Group General Planning Manager.

3.

The Store Communication Manager sends email notification to the sending store and the receiving store that the transfer is approved. a.

The stores will have a minimum of one (1) week lead time prior to the due date.

b.

The requested transfer merchandise is gathered by the sending store and is physically sent during the 2nd or 3rd fiscal week of the month.

End of Season Clearance Consolidation Transfers 1.

These transfers require approval from the VP, Group General Planning Manager. Specific time blocks for clearance consolidation are established. a.

The time frames are usually January/February and July/August depending on the Corporate Family Group (CFG).

b.

A minimum of 500 pieces by CFG is required for the consolidation transfer to be requested for approval.

c.

The end of season clearance consolidation transfers must be between stores within the individual Regional Store Director’s region.

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2.

C.

Any other consolidation transfer outside of the approved time block is reviewed as an exception and requires approval from the Planning Division. a.

Before an exception transfer can physically occur the store must contact their Regional Store Director who then must contact the applicable VP, Divisional Planning Manager for the CFG involved for approval.

b.

If approved, the VP, Group General Planning Manager contacts the Store Communication Manager to notify the sending store and receiving store of the transfer.

Store Initiated Transfers to Exclude Customer Transfer Requests 1.

The Store Manager must contact their respective Regional Store Director to request a store initiated transfer and explain the reason if necessary. a.

The transfer must meet the minimums of $5,000 per department or 500 pieces by CFG. Upon approval by the Regional Store Director, the request is shared with the VP, Group General Planning Manager for final approval. 1)

The following are some examples of exceptions to the minimums that might require a store requested transfer: Store Construction Store Remodels Stores with very high dollars per square foot

b.

Store initiated transfers are not permitted to move odds and ends to another store. (e.g., clearance groups, etc.) This type of transfer is too costly to perform on an individual store basis.

c.

This merchandise is to remain in your store and follow normal markdown processing.

2.

The Regional Store Director must contact the applicable VP, Group General Planning Manager for approval to do the transfer. a. If approved, the VP, Group General Planning Manager contacts the Store Communication Manager to notify the sending store and the receiving store that the transfer is approved.

3.

Merchandise approved to be transferred must be serviced by the same distribution center.

4.

Hand Carry Transfers can be requested in EMERGENCY SITUATIONS ONLY.

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5.

a.

All hand carry transfers must be requested through the Regional Director of Stores and approved by the applicable VP, Group General Planning Manager.

b.

Hand carry transfers must be acknowledged out by the sending store and acknowledged in by the receiving store management.

c.

Hand carry transfers must be transported between stores by a management associate. Hourly associates cannot transport hand carry transfers.

d.

Hand carry merchandise CANNOT BE KEPT IN A PERSONAL VEHICLE OVERNIGHT. All hand carry transfers must be done during store hours.

Advertised Merchandise Transfers are STRICTLY AN EXCEPTION a.

These transfers must be approved by the applicable VP, Group General Planning Manager and are handled on a case by case exception basis.

b.

Stores cannot initiate a transfer of merchandise to another store to cover an advertisement without approval from the applicable VP, Group General Planning Manager. 1)

D.

Exception Transfers not Requiring VP, Group General Planning Manager Approval 1.

The only two (2) types of transfers that DO NOT need prior approval from the VP, Group General Planning Manager are: a.

II.

The Regional Store Director must email the VP, Group General Planning Manager with the transfer request information.

Return to Order Management Transfers or Buyer Sample Transfers

Customer Transfers between Stores A.

Customer store initiated transfers do not require prior approval from the VP, Group General Planning Manager. 1.

The company’s recommendation for customer transfers is to send the merchandise directly to the customer’s home. a.

2.

The sale is tendered on the customer’s PLCC credit card and the approved send fee is charged.

Only regular price or temporary sale price merchandise items can be transferred for a customer accommodation. 32

a. B.

III.

“Permanently Reduced” merchandise CANNOT BE TRANSFERRED between stores for a customer accommodation.

Customer Returns of Regular Price Merchandise NOT CARRIED in you store’s inventory. 1.

When a customer returns regular price merchandise to a store that does not carry it in the store’s inventory, the item may be transferred to a store that does carry the merchandise.

2.

The merchandise must be transferred through the designated distribution center to the receiving store.

Preparation of Merchandise for Transfer to another Store A.

The inter-branch transfer (IBT) function is recorded through the POS terminal.

B.

1.

When a “transfer number” is not available for stock movement, press ENTER to bypass the prompt on the POS.

2.

40 entry lines are allowed on one (1) IBT transaction. If more than 40 items, TOTAL is to be selected and a new IBT transfer is to be started to enter the remaining items.

3.

The ‘receiving store’ receipt is to be attached to the merchandise and the ‘sending store’ receipt is filed at the store by FOB until inventory reconciliation is completed.

4.

If the IBT transaction is completed and an item must be removed from the transaction, the transaction must be POST VOIDED by the Manager on Duty.

After the merchandise is scanned and a transfer barcode label in placed on the outside of the sealed carton, it is to be placed on the next transfer trailer. A.

Stores can inquire on the status of a transfer on TRMS. The DW921A and DW921B reports are monthly reports updated each week. These reports summarize all transfers processed for the month.

Pre-Sell Policy

The Company offers Pre-Sell events throughout the year to our customers and associates. All scheduled Pre-Sell promotions must be approved by the Stores’ Administrative Team. The approved Pre-Sell promotions allow the customer and/or associate to select merchandise prior to the start of the event and agree to pay for eligible merchandise on the first day of the scheduled store promotion. All Pre-Sell events, excluding Furniture, are POS supported.

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The Policy is found on theONE>Policies>Customer Service/Selling/Store Processes>Pre-Sell Policy. The Company offers Pre-Sell events throughout the year to our customers and associates. All scheduled Pre-Sell promotions must be approved by the Stores’ Administrative Team. The approved Pre-Sell promotions allow the customer and/or associate to select merchandise prior to the start of the event and agree to pay for the eligible merchandise on the first day of the scheduled store promotion. All Pre-Sell events, excluding Furniture, are POS supported. Associates may not contact customers to solicit a Pre-Sell order until the event start date. Customers may only be contacted if specific approval was provided and was recorded in the Clientele file by using the Client Call Label. No customer charge account information is to be recorded. Financial sale falsification is against Company Policy and violation may result in disciplinary action up to and including termination of employment. POLICY: I.

Pre-Sell Events A.

Tender Allowed for Pre-Sell Events 1.

2.

The accepted forms of tender for a Pre-Sell transaction are Private Label Credit Card (PLCC) and Third Party Bank Cards. 

Associates presenting a discount eligible PLCC card as tender receive their discount on the transaction.



Associates presenting a Third Party Bank Card as tender do NOT receive their discount on the transaction.



Associates without a PLCC or Third Party Bank Card may place items on hold through the first day of the event.

Debit cards, checks, cash or any other cash-like tenders (including Gift Cards and Merchandise Credit Cards) are NOT accepted by the POS terminal as forms of tender for a Pre-Sell transaction. 

3.

Customers who wish to use a form of tender other than a PLCC or Third Party Bank Card cannot Pre-Sell. 

B.

Checks may NOT be held in the store to be used at a later date as the form of payment on a Pre-Sell transaction.

The customer may place the item on hold through the first day of the event.

Processing the Pre-Sell Transaction

34

C.

D.

E.

1.

Pre-Sell events will automatically appear in the POS once they are active. All events will have a start date (the first day Pre-Sell transactions may be rung) and an end date (the last day Pre-Sell transactions) may be rung.

2.

The associate ringing the transaction selects either POS Pre-Sell Hold or POS Pre-Sell Send.

3.

The customer receives the “Customer” receipt. The “Record Copy” receipt is to be attached to the bag containing the merchandise.

4.

A Pre-Sell purchase cannot be rung if the POS terminal is off-line. It is to be rung at another terminal.

Securing the Pre-Sell Merchandise 1.

All merchandise bags must be placed in a secure area.

2.

Stock rooms or designated drawers within a cosmetic bay may be used to secure the merchandise.

3.

Shipping or pickup of merchandise begins on the first day of the scheduled store promotion after declined transactions have been reviewed.

4.

Merchandise that is on hold is to be kept separate from merchandise that has been rung in the POS terminal.

Requirements to Claim Pre-Sell Merchandise 1.

The customer is to present their copy of the Pre-Sell POS terminal receipt to claim their merchandise.

2.

If the customer does not have the terminal receipt, they are required to provide valid photo identification and the credit card matching the last four digits of the account printed on the POS terminal receipt.

Handling Unclaimed Pre-Sell Merchandise 1.

Customers are to be told when and where the Pre-Sell merchandise can be picked up at the time the associate takes the Pre-Sell order.

2.

The customer has 10 days from the first day of the scheduled store promotion to pick up the Pre-Sell merchandise.

3.

If the Pre-Sell merchandise is not picked up after the initial 10 days, the store calls the customer and informs them the Pre-Sell merchandise will be held for an additional three (3) days at which point it will be returned to stock.

35

4.

5.

F.

All unclaimed Pre-Sell merchandise after 14 days is to be credited to the customer’s account and returned to the sales floor. 

The credit is to be made to the account number that was used when ringing the Pre-Sell transaction.



Store Management is to contact Sales Audit to obtain the account number.



The customer will not be sent a copy of the return transaction receipt.

Customers and associates without a PLCC or Third Party Bank Card who have merchandise on hold must purchase their Pre-Sell merchandise on the first day of the event. If the merchandise is not purchased on the first day, it is to be returned to the selling floor.

Recording Customer’s Pre-Sell Information in Clientele Files 1.

When a customer places a Pre-Sell order with an associate, the associate may ask the customer if they would like to be added to a clientele file for future promotions.

2.

If the customer agrees, the name and address (including email address) and the merchandise preference can be recorded in the file.

3.

Credit Card Account Numbers cannot be recorded in the customer’s clientele file. 4.

The customer must provide specific approval to record their telephone number in order to contact them for future promotions.

5.

The associate must use the Client Call Label to record the customer’s verbal consent to be contacted for future promotions. 

G.

This ensures we are in compliance with the “Do Not Call” laws administered in most states.

6.

Associates are prohibited from contacting customers from the clientele files for purpose other than notification of a future promotion within their specific department.

7.

Sharing of clientele file information between departments is prohibited.

Contacting Customers to Solicit Pre-Sell Order 1.

Customers may not be contacted prior to the event start date.

2.

Customers may only be contacted if specific approval was provided and was recorded in the Clientele file by using the Client Call Label. 36

3.

4. H.

Pre-Sell orders solicited by phone are to follow the same processing of the order as if the customer was in the store. 

The customer must provide the Credit Card account number to allow the store to ring the POS Pre-Sell transaction. The POS transaction must be rung while the customer is on the phone and verbally provides their account number to be entered into the POS.



No customer charge account information is to be recorded.

Utilizing “Cold Calling” of customers for any reason is prohibited.

Customer Initiated Phone Request for Pre-Sell Order 1.

The customer must designate if they want to pick up the Pre-Sell merchandise at the store or have it shipped to their home.

2.

When the customer requests to pick up the merchandise in the store, a PLCC or Third Party Bank Card are the acceptable tenders.

3.



The customer must provide the Credit Card account number to allow the store to ring the POS Pre-Sell transaction. The POS transaction must be rung while the customer is on the phone and verbally provides their account number to be entered into the POS.



No customer charge account information is to be recorded.

When the customer requests to have the merchandise shipped to their home, a PLCC must be used.  If the customer requests to use a Third Party Bank Card, they are to be informed that they must pick up the Pre-Sell merchandise in the store.

Reporting of Associate Non-Monetary or Cash Awards

All non-monetary or cash awards, to include BonTon gift cards, earned by an individual associate must be reported to Payroll at the time of receipt for proper income tax reporting and processing. The awarded dollar/fair market value amount is added to the associate’s earnings. This does not include Instant Credit reimbursement, awards presented by Loss Prevention or awards earned for Corporate initiated contests. These types of awards are reported directly to Payroll by the Division administering the individual award program. BonTon gift card awards to include Third Party gift cards provided directly to an associate from a vendor are to be sent directly to the associate’s home and are not required to be reported to Payroll. The vendor is responsible for any tax related reporting requirements on these awards.

37

SUMMARY: Gift Awards, except as noted above will be included in the associate’s gross earnings. The Policy is found on theONE>Policies>Financial Policies> Reporting Associate Non Monetary or Cash Awards. POLICY: I.

Associate Non-Monetary Awards A.

B.

A non-monetary award is merchandise with a dollar or fair market value attached to it and the associate has met specified requirements to earn receipt of the award. The dollar amount must be reported to Payroll for tax purposes. 1.

An example would be a sales goal by store is established for a specific vendor. When this goal is reached or exceeded, individual associates are allowed to select a specified dollar amount of merchandise from the store’s in-stock inventory. In this scenario, the dollar amount of the merchandise is reported to Payroll.

2.

When a vendor provides a non-monetary merchandise award directly to an associate, it is not reported to Payroll for tax purposes. In this scenario, the vendor is responsible for any tax related requirements.

Reporting the Non-Monetary Award to Payroll’ 1.

The “Associate Contest & Prize Report-Tax Purposes” form is to be completed at the time the award is given to report it to Payroll. a.

2.

The “amount paid” column equals the current PLU price minus associate discount or the fair market value of the non-monetary award. a.

3.

Coupons cannot be applied/deducted from the price.

The form is to be completed for every associate who receives a nonmonetary award. This includes both non-exempt and exempt associates. All associates from one location may be listed on one form as long as the (H) hourly and (S) salary is clearly identified. a.

II.

The form is on theOne>Forms>Payroll Forms>Special Pay Forms.

Upon completion of the applicable information, email it as an excel attachment to the address located at the top of the form. DO NOT SCAN the form and email it to Payroll.

Associate Cash or Gift Card Prizes/Awards A.

All cash or gift card awards to an individual associate must be reported to Payroll at the time it is received.

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1.

B.

The “Associate Contest & Prize Report-Tax Purposes” form must be used to report the award. This is the same form utilized for non-monetary awards.

The following are excluded from submitting the “Associate Contest & Prize Report” to Payroll: 1.

Instant Credit reimbursement is made to the associate directly through their payroll check.

2.

Associate awards presented by Loss Prevention are reported directly to payroll for payment to associates through their payroll check.

3.

Corporate initiated contests are monitored by the Store Administrative Office and reported directly to Payroll.

4.

BonTon or Third Party gift cards awards provided directly to an associate from a vendor are to be sent directly to the associate’s home. a.

The vendor is responsible for any related tax reporting requirements on these awards.

Vendor Accommodations

Every vendor accommodation is initiated by the buyer to pull merchandise from the stores and send it to the applicable Central Return Center (CRC). The CRC processes the merchandise for shipment back to the vendor. This process is also used for Vendor Stock Adjustments. When all accommodations are entered and approved by the Buyer, Accounts Payable and the applicable CRC, the RV Notes automatically print at the stores. SUMMARY: The chargeback request must be a minimum of $25,000 cost. All exceptions to the $25,000 cost rule must be approved by the Vice Chairman, President of Merchandising Officer. The Policy is found on theONE>Policies>Buying/Merchandising>Vendor Accommodations. POLICY: I.

Buying Staff’s Responsibility for Initiating an Accommodation A.

The accommodation chargeback request must be a minimum of $25,000 cost to be initiated. 1.

Any chargeback request for less than $25,000 cost requires approval from Vice Chairman, President of Merchandising Officer. The buyer must complete the Accommodation Cost Exception form and submit it for approval prior to completing the accommodation. a.

The submitted form is reviewed within 24 to 48 hours and if approved sent to Accounts Payable. 39

II.

B.

The buyer must also secure the “Return Authorization Number” from the vendor prior to the entry of the accommodation.

C.

When the accommodations is entered and approved in the system by the buyer, Accounts Payable and the Rockford CRC, the RVNOTES automatically prints at the stores.

Stores’ Responsibility for Processing Accommodations A.

A designated store associate is responsible to remove the RVNOTES from the printer on the scheduled force print day. In addition, the Accommodation Log prints and is to be used to verify all accommodations printed at the store.

B.

The applicable Sales Manager of the accommodation department must review the “Last In-Store Scan Date”. The stores have a 10 day timeframe to complete the scanning process of the accommodation with an additional five (5) days to scan on to the trailer.

C.

Preparation of Accommodation Merchandise for shipment to the applicable CRC 1.

The merchandise must be located on the sales floor and the additional buyer’s comments for specific instructions related to the accommodation, if printed, must be followed. a.

If an item of merchandise cannot be found, the “NONE” process on the RF scanner must be followed to update the system reflecting the store responded with “NONE”.

2.

All cartons used for any accommodations must have a unique VRecall carton label assigned. This label must be scanned and the required information entered to begin the item scanning.

3.

To properly record the information all items must be scanned prior to placing them into the carton. All items must have a barcode ticket attached. a.

Only one (1) accommodation number per carton is permitted. Do not mix accommodations with other merchandise within a carton.

b.

Do not place the RV notes in the carton. They are kept on file at the store.

4.

When an item is scanned that is not approved for the accommodation, an ‘error’ message displays. DO NOT place the item in the carton as this causes shortage. The merchandise must be returned to the sales floor.

5.

If a significant discrepancy exists upon completion of the scanning process between the MI On-Hand and the actual units scanned, verify items were not missed. An Over/Short may be submitted if it is believed the discrepancy is due to a non-receipt of merchandise. 40

6. III.

IV.

“On Trailer” Scanning Process A.

The trailer ID number must be entered only when scanning the first carton label.

B.

All cartons must indicate they are in ‘closed’ status before they can be scanned on to the trailer. If the carton shows ‘open’, a physical count of the items must be done to verify it against the scanner count. If accurate, close the carton on the scanner.

C.

When all cartons have been scanned the label must be marked “On Trailer” status.

Monitoring Accommodation Status A.

V.

Upon completion of scanning, the carton must be closed on the RF scanner. The cartons must be picked up to be placed on the trailer.

A designated day of each week is to be determined for verifying store accommodations processing is current. This process is to be assigned to an individual associate. The monitoring process is to be completed using the Reverse Logistics Reports as outlined in the Reverse Logistics-Vendor Accommodations Manual. All follow up is to be coordinated with the applicable Sales Manager.

Viewing DC Audit Results A.

The DC randomly audits cartons prior to returning them to the vendor. At the beginning of each month, the designated associate must review the results of the prior month’s audits by utilizing the Reverse Logistics Reports.

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Cosmetic Department Listing List of Cosmetic Departments 20 – Women’s Fragrance 26 – Estee Lauder 121 – Beauty Station 142 – Clarins 153 – Origins 200 – Cosmeceuticals 218 – Flori Roberts 219 – Chanel Beaute 221 – Elizabeth Arden 222 – Fashion Fair 223 – Clinique 226 – Lancome 227 – MAC 228 – Body Complex 229 – Bobbi Brown 230 – Men’s Fragrance 470 – Dior Cosmetics 850 – GWP/PWP

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Cosmetic Glossary 2X2 signs – Small descriptive signs placed on every gift set. AC (Account Coordinator) - Employed by the BonTon. Works with the AE of a specific line to help grow the business in stores. Plays a key role in the planning of counter specific goals and strategies that lead to achieving sales goal. Works with the stores on coaching and developing BA’s. AE (Account Executive) - A sales representative employed by a specific vendor. After Shave – Next in strength to cologne, is made of perfume oils in a hydro-alcoholic solution. Created to be applied to the face, there are 2 forms of After Shaves lotions – one features cooling astringent qualities to heal small nicks and cuts. The other incorporates ingredients which moisturize and smooth the skin. The scent is formulated to perform for a short time. Ancillary – Items in a fragrance line other than the key sprays; i.e. body lotion, deodorant, powders. AUS – Average unit sale BA – Beauty Advisor Billing Insert – a 3X6 inch ad that is included in charge customer’s monthly billing statement. Blotter Cards – Narrow strips of absorbent paper with which scent samples are taken and smelled. On smelling strips, the evaporation of fragrance materials and perfume oils can be observed in the different phases they go through. However, final judgment of a perfume must always be made on the skin. Blow-ins – A small ad that is inserted into a catalog and is held in place by the pages of the base book. It is not stapled or secured into the book in any way. Bounce Back Cards – Used to bring customers back to the counter. Sometimes linked with a deluxe sample. Buyer – Associates responsible for developing and executing a strategy for assortment, vendor management, pricing and marketing for a specific category of business to maximize sales and profitability. Buyers report directly to the DMM (Divisional Merchandise Manager). Clarins SCC (Skin Care Center) - These are booked events that are a key tool used to grow the Clarins business. They occur throughout the season at select doors, based on volume. They are performed by a Clarins Instructrice de Beaute, focusing on a client’s skin care concerns. These events have dollar and appointment booking goals. Clientelling – Beauty Advisors connection to the customer. Clientele cards are completed after each customer visit with information of products purchased. Also used for contacting customers to notify of upcoming events. Coffee Beans – Used to clear your senses between sniffs of fragrances. 43

Collateral – A collection of media (posters, signs, brochures, etc) used to support the sales of a product or service. These sales aids are intended to make the sales effort easier and more effective. Includes signs, banners, ribbons, flyers, postcards, direct mail books, letters, billing inserts, etc. Cologne (Men) – Usually the most concentrated and lasting form of a fragrance. Cologne (Women) – The lightest form of a fragrance. Perfect for splashing liberally all over the body. It does not provide a longer lasting fragrance application. Core Brands - Fragrances that are the strength of the business. Corporate Event – These are events that are driven by the buying offices. They will be for a specific time frame and will generally have a theme for the cosmetic departments to use to build the event. May be supported with advertising, GWP/PWP, collateral items. Cosmeceuticals – Cosmetic products that claim to have drug-like benefits. Examples of products typically labeled as Cosmeceuticals include anti-aging creams and moisturizers. May contain active ingredients such as vitamins, phytochemicals, enzymes, antioxidants and essential oils. Applies only to products that are applied topically. Cosmetic Card File/Registry – A tool to use to drive business, it is critical to the success of your business to maintain an active Clientele file. It is a strong promotional tool used to develop line business and customer loyalty through customer follow up. Card files are the property of The BonTon. Counter Manager – A person who has been designated to lead, coach and develop the BA’s at the counter to achieve the counter sales goals. Damages – Unsaleable product due to be returned. DBR – Daily business record. DMM (Divisional Merchandise Manager) – Managers responsible for developing merchandise and promotional strategy to ensure customer satisfaction, competitive merchandise assortments and profit for specific FOB (Family of Business) to achieve sales and profit plans. A team of buyers reports to a DMM. DMM’s report directly to a GMM (General Merchandise Manager). Door – A term used by retailers instead of the word store. Dram - A small quantity of liquid EDT (Eau de Toilette) – An alcohol/water based perfume solution containing 3% to 8% perfume compound. EDP (Eau de Parfum) – One of the newest forms of fragrances to be found in many of the fine fragrance collections, it assures a long-lasting concentrated application and prepares the skin for the perfume application. 44

Étagère – A fixture with open shelving. Factice – Regular or oversize perfume or cologne bottles filled with tinted liquid for display purposes only. Flankers – A fragrance that capitalizes on the success of a master brand. Many flankers are released as limited editions. Some flanker scents are variations on the original fragrance – they might share certain notes; others share nothing more than the name. Floor Plan – A diagram that shows the physical layout of fixtures. Orientation of the view is downward from above. Fragrance Families – Traditionally each perfume is put into a specific group or family. These families all more or less reduce to six different categories of fragrance – floral or sweet, sporty or clean, green or natural, musk, woody or chypre and oriental or spicy. Every person’s taste in fragrance varies. Franchise Business - Businesses that the company depends on day in and day out. GWP (Gift with Purchase) – Also called ‘G’. A promotional event when a free gift is offered to customers when they make a qualifying purchase. Most Color & Treatment vendors have one GWP per season. This is a promotional tool to drive sales and build our customer base. Dates and goals are planned by the corporate office in partnership with the vendor. They usually consist of a presell wk (4 days), and the 2 full weeks following. One gift per customer. GWV (Gift with Visit) – Clinique event where a customer receives a free gift with a consultation. IPT/UPT – Item per transaction, unit per transaction Juice – A term often used to refer to fragrances. Layering – Using a lotion under a fragrance to help the fragrance last longer. Link Sell – Showing a customer another product that works well with what the customer wants to purchase i.e. customer needs a mascara, the associate should also show them an eyeliner. Make the Day Clock - Sales for the day divided by the hour to ensure the counter makes their daily goal. Market Share – The ratio of a company’s sales to the total industry. MIDAS (Merchant Intranet Daily Audited Sales) – The reporting system used to compare TY actual sales to LY and Plan. Model – A person who is usually employed by a vendor to help promote specific products in their line.

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National/Regional MUA Event - Some vendors provide the opportunity for special treatment from a highly trained professional National Makeup Artist. The numbers of these events are limited. Timing and store location is coordinated at the corporate office in partnership with the vendor. Dollar goals and appointment goals are determined. Prepay for these events can ensure quality bookings and a low cancellation rate. Regional events typically have lower appointment and dollar goals. Notes – Borrowed from the language of music to indicate an olfactory impression of a single smell, or to indicate the 3 parts of a perfume – top note, middle note, base note. Outpost – Merchandising presentation located in an area separate from its usual department; intended to create additional interest in the product. Percent Change/Goal – A per-cent of difference. A basic math calculation used to express a percentage of the difference between two items. Examples are TY vs. LY, PL vs. TY Actual. Perfume/Parfum – The strongest, longest lasting fragrance form. Playbook – Critical to the successful execution of an event……….. PWP (Purchase with Purchase) – Also called ‘P’. A promotional event when customers can purchase a promotionally priced item with a qualifying purchase from a specific vendor or dept. Presell – Reserving merchandise for customers prior to a promotional event that will be rung into the POS when the event starts. An example would be for a Cosmetic GWP (Gift with Purchase). Recruiting Customers – Beauty Advisors walking through the store to invite customers back to their counter for a free consultation. RMM (Regional Merchandise Manager) - Managers responsible for driving sales and profit by collaborating with stores, buyers and vendors to identify sales opportunities and strategies. Ensure the implementation of best practices in merchandising, visual presentation and service for a region of stores. RMM’s report directly to an RSD (Regional Store Director). RTV (Return to Vendor) - Products that are returned to the vendor. SAM (Sales Area Manager) – Responsible for managing all daily activities of assigned area to include training, coaching and developing a professional team, quality customer service, merchandising and business management to achieve sales and profit objectives. Performs Manager on Duty responsibilities as required. Schematics – A diagram that provides a guideline of how merchandise is to be displayed in a case. SKU (Stock Keeping Unit) – An eight digit number identifying a single unit of merchandise. SPH (Sales per Hour) - An Associate’s sales divided by their hours worked Special Event – In-store events to attract customers to specific merchandise areas to build sales. May have appointment goals or dollars goals set for the event. 46

Spiff – A cash bonus or additional commission a store sales associate receives for increasing sales of a particular item. SPF (Sun Protection Factor) – Many products are labeled with SPF numbers. The higher the SPF, the more protection you get from sunburn. Store Manager – Responsible for ensuring customer satisfaction, overseeing all aspects of a store’s operations, monitoring store presentation and developing a team to maximize productivity and profitability. Tester, Tester Unit – Open sample for customers to experience the product. theOne – The intranet site used exclusively for The BonTon; designed to provide associates with everything needed to operate business efficiently and effectively. TOA – Token of appreciation Trend Show – Show to see newest fashion and makeup trends. Trunk Show – A special sale in which vendors present merchandise to customers that is new or not available in the particular market. Vendor – The resource from which merchandise is purchased. Vendor Accommodation/Returns – Process in which “aged” merchandise is returned to the vendor and reinvested in “new” merchandise. VOC – Vial on Card

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