Issuu on Google+

policies & procedures

celebrate | encourage | reward


Policies & Procedures table of contents General Guidelines.........................................................................................Pg. 1 Purpose of Policies and Procedures....................................................................Pg. 1 Section 1: Consultant Qualifications & Responsibilities............................................Pg. 2 Section 2: Selling.............................................................................................Pg. 8 Section 3: Ordering.........................................................................................Pg. 10 Section 4: Advertising/Marketing/Internet............................................................Pg. 14 Section 5: Sponsoring......................................................................................Pg. 21 Section 6: Returns............................................................................................Pg. 23 Section 7: Tax Information.................................................................................Pg. 24 Section 8: Compliance & Prohibited Practices.......................................................Pg. 27 Section 9: General Policies................................................................................Pg. 28 Thirty-One 231 Commerce Blvd. Johnstown, OH 43031

Office 740-966-3800 Fax 740-967-0236 ordersupport@thirtyonegifts.com


Policies & Procedures General Guidelines These Policies and Procedures are incorporated into, and form an integral part of, the Consultant Agreement between Consultants and Thirty-One (the Company). Throughout these Policies and Procedures, where the term “Agreement” is used, it collectively refers to the Thirty-One Independent Consultant Agreement and these Policies and Procedures. It is your responsibility to read, understand, and comply with the Agreement. “We,” “us,” and “our” refer to the Company; “you” and “yours” refer to the Consultant.

Purpose of Policies and Procedures  Thirty-One is a party plan direct sales company that markets handbags, housewares, children’s and other giftable products through Independent Consultants. It is important to understand that your success and the success of your fellow Consultants is dependant upon the integrity of the people who market our products. To clearly define the relationship that exists between Consultants and the Company, and to explicitly set a standard for acceptable business conduct, Thirty-One has established these Policies and Procedures. As an Independent Thirty-One Sales Consultant, you should practice the highest standards of ethics, integrity and professionalism in your interaction with customers, Hostesses, Home Office staff, fellow Consultants, the general public and representatives of other direct sales companies. Thirty-One Consultants are required to comply with all of the Terms and Conditions set forth in the Consultant Agreement, which the Company may amend at its sole discretion from time to time, as well as all federal, state, and local laws governing their Thirty-One business and their conduct. Because you may be unfamiliar with many of these standards of practice, it is very important that you read and abide by the Consultant Agreement. Please review the information in these Policies and Procedures carefully. It explains and governs important aspects of the relationship between you as an independent contractor, and the Company. If you have any questions regarding any policy or rule that your Sponsor cannot answer, do not hesitate to seek an answer from anyone in your upline or from the Company’s Home Office.

1


Section 1: Consultant Qualifications & Responsibilities

1.1 – Consultant Qualification To become an Independent Thirty-One Consultant, you must be 18 years or older, be a United States citizen or permanent resident, possess a valid Social Security number or Green Card, and be sponsored by a current Consultant. Your sponsor will provide you with a Consultant Agreement, or it can be found on thirtyonetoday.com in the Consultants Toolbox. It is recommended that all Consultants maintain a valid e-mail account to receive regular Company communications. You should complete the Consultant Agreement, which should also have your recruiter’s name and ID number on it, and send this document directly to: Thirty-One • 231 Commerce Blvd., Johnstown, OH 43031 or it can be faxed to 740-967-9910. New Consultants can also sign up on the sponsoring Consultant’s website. All New Consultant Kits shipping to Alaska or Hawaii will be charged an additional $55.00 for shipping and handling. This charge must be made to cover the extra costs of shipping outside of the Continental United States. Upon review and acceptance of the Consultant Agreement, the Company will provide you with a copy of your contract and a New Consultant Kit. Consultant status is granted for a period of one year and is contingent upon the Company’s acceptance of the Consultant Agreement. All Consultants have the right to cancel anytime within the year. We require 30 days written notice to terminate your account. If you wish to return your New Consultant Kit and it is in saleable condition, you will receive a refund. The Self-Termination Notice is located in this guidebook.

1.2 – Independent Contractor Status As a Consultant, you are an independent contractor and not an agent or employee of the Company. This Agreement does not create an employer/employee relationship, agency, partnership, or joint venture between you and the Company. In general, you are responsible for filing all necessary tax returns and reports required by all state and federal taxing authorities (except sales tax), including income and self-employment taxes. The tax laws differ from state to state. Please refer to “Consultant Tax Information” to see how these laws affect you. The Company will supply an IRS Form 1099 to all Consultants who earn over $600 in prizes and/or awards or make purchases from Thirty-One for resale of over $5,000 or receive $600 or more in non-employee compensation (overrides) in a calendar year. You are not entitled to and will not claim any of the rights, privileges, or benefits of an employee of the Company, including unemployment benefits. You have no authority (express or implied) to bind the Company to any obligation. You will establish your own goals, hours, and methods of sale, as long as you comply with the terms of this Agreement. You can only join as a single, independent contractor, never as a business. As an independent contractor, you must observe the following guidelines: • State your title as follows wherever it is used, including advertising, telephone directories, business cards, checking accounts, and vehicles: • [Your name], Independent Consultant, Thirty-One. • You may not use the Company name alone for such purposes. • All 800 numbers must be listed under your name. You may not use an 800 number under the Company’s name. You may NOT answer the telephone by saying “Thirty-One” or in any other manner that would lead the caller to believe that she or he has reached the Company’s corporate offices. 2


1.3 – Leadership Agreement Consultants who promote to Director level will need to sign a Leadership Agreement that includes the roles and expectations for Thirty-One leaders. Director in Qualification (DIQ) is the first month that all Director requirements are met. If you choose not to promote to the title of Director, written notice of a requested block of promotion must be received at the Home Office during or before the DIQ month. A written request to remove the block of promotion must be received at the Home Office during or before the DIQ month.

1.4 – One Consultant by Thirty-One Per Consultant and Per Household A Consultant may operate or have an ownership interest, legal or equitable, as a sole proprietorship, partner, shareholder, member, trustee, or beneficiary, in only one Thirty-One business. No individual may have, operate, or receive compensation from more than one Thirty-One business. Individuals of the same family unit may not enter into or have an interest in more than one Thirty-One business. A family unit is described as spouses, dependant children, and other relatives living or doing business at the same address.

1.5 - Purchases for Personal Use and/or Kit Display You may purchase products for personal use, or for your Kit Display directly from the Company at a 25% discount.

1. Consultants may be given a 40% discount during special times of the year on specific products. 2. The 25% discount can be taken in addition to monthly sale prices and specials in some cases; this will be announced if applicable.

3. Shipping and handling charges generally are taxed in most states and are taxed at the same rate as either food or general merchandise if your state differentiates. The shipping and handling for Consultant Supply Orders is $4.00 + 8%. The shipping for new consultant kits is $8.00. The tax is calculated on the discounted merchandise total and the shipping and handling, when applicable. There are additional shipping charges for packages going to Alaska and Hawaii.

1.6 - Active Consultant To remain an active Consultant with Thirty-One, you must submit a qualifying party or cumulative sales of $200 within a consecutive 3 month period. For example: Month Sales Status June $50 July $50 August $100 Active September $50 Active October 0 Inactive

(June + July + August = $200) (July + August + September = $200) (August + September + October = $150)

An Active Consultant retains the opportunity to qualify for Career Plan bonus programs based on personal and downline sales volume. Discounted purchases such as Hostess half-price items, add-on kits and business supplies do not count toward your personal sales.

3


1.7 - Inactive Consultant If at any time you do not submit $200 in a consecutive three-month period, you will become inactive. For example, if you place $200 in orders in January, but nothing in February, March or April, you would be considered Active for January, February and March, and then you would be considered Inactive for the entire month of April. (The total sales for the three months of February, March and April do not reach the $200 minimum.) To regain the active status, please notify the Home Office when you have a qualified party and your website will be reactivated for 48 hours. If the party is not submitted within the 48 hours, your site will be deactivated again. NOTE: Even if you contact the Home Office to be reactivated and place an order, you do not regain your downline sales volume after being inactive.

1.8 - Termination Your account may be terminated in one of two ways: 1.You may cancel at any time by giving 30 days written notice to the Company; Consultants who choose to resign from their Thirty-One business, for any reason, are asked to notify the Company in writing stating their intentions. The notice should be sent to yourbusiness@thirtyonegifts.com and should include their Consultant ID#. Resignations are effective after the commission checks are issued following the month in which the resignation was received. It is expected that Consultants who are resigning notify their upline and any downline of their intentions. If the Consultant is resigning within one year of their Agreement date, all unused resaleable Kit products and sales aids may be returned to Thirty-One at the Consultant’s expense for a refund. See Section 1.10 for return of starter kit items. 2. The Company may terminate an Independent Consultant Agreement for violation of any term of this Agreement, any unlawful act or without cause. Reasons for Termination may include, but are not limited to:

• Inability to contact the Consultant after reasonable attempts to do so

• Extended Inactive status

• Failure to maintain a valid credit card on file

• Failure to follow Company Policies or Procedures

• Failure to abide by the terms of your Independent Consultant Agreement

1.9 - Effect of Termination Upon termination of your account for any reason, your personal group rolls up to the first level of your sponsor. (Refer to “Roll-Up of Personal Group.”) You will permanently lose all rights or claims to your former group. In addition, you will lose any Business Supply Credits that you have earned. You will receive legitimately earned profit and commissions only for the last full payment period you were active prior to termination.

1.10 - Return of Starter Kits Starter kits shall be deemed “resaleable” if each of the following applies: 1. Items are unopened and unused 2. Packaging and labeling has not been altered 3. The product and packaging are in condition such that is a commercially reasonable practice within trade to sell the merchandise at full price 4. Products are returned to Thirty-One within a year of the date of purchase 5. Products contain current Thirty-One labeling 6. Product is not personalized 4


Upon termination of this agreement, Company will refund 90% of the Consultant’s purchase price to the Consultant on any unused and resalable product samples or inventory purchases within one year of the date of termination should Consultant return such products. The Company shall deduct from reimbursement paid to the Consultant any commissions, overrides, rebates, or other incentives received by the Consultant, which were associated with the merchandise that is returned. A Consultant may cancel her Consultant Agreement within 15 days from the date of enrollment, and may return her starter kit for a full refund within such time period.

1.11 – Rejoining the Company A Consultant who has resigned or been terminated for inactivity prior to the current commission period or for any other reason, may rejoin the business subject to Company review and approval by purchasing a new Starter Kit. A Consultant terminated for Inactivity in the current bonus period may rejoin by sending an e-mail request to Customer Service at any time within the month following their last Inactive month (October in the example above), and submission of a retail value order sufficient to become Active again in that month. If rejoining after 6 months of resignation or termination, a Consultant will join the Company again as a brand new Consultant, and may join with any sponsor they wish, and be eligible for any incentives offered to new Consultants. If rejoining within one year of resignation or termination, a Consultant can rejoin under their original sponsor, but her former downline, if any, will not be reinstated. A Terminated/Resigned Consultant’s downline recruits will move up to that Consultant’s upline sponsor, but will not be counted as personally sponsored by the upline. Consultants who rejoin the Company within one year of termination under their original sponsor are not eligible for Startswell Rewards and will not count as New Recruits for contests and trip incentives when they rejoin the Company.

1.12 – Company Payments to Consultants A Consultant must be qualified and in compliance with the Consultant Agreement to qualify for overrides and commissions. You must have $200 in a consecutive three-month period to receive overrides. Director Override details are found in the Directors Manual. A. Adjustments to Overrides and Commissions for Returned Products Consultants receive overrides and commissions based on the actual sales of products to end customers. When a product is returned to Thirty-One for a refund or is repurchased by the Company, the overrides and commissions attributable to the returned or repurchased product may be deducted, in the month in which the refund is given. B. Time Of Commissions Under the terms of Thirty-One, you are entitled to 25% commission on your personal sales. You will submit the full amount of the revenues collected at the party, and we mail out payments the 10th of every month for party revenues received by midnight on the last day of the month. Direct Deposit is available – you may sign up via your Virtual Office at www.thirtyonetoday.com. C. Commission Checks under $20.00 If your commissions for a single month total less than $20.00, you will receive a credit to your Thirty-One account instead of a printed commission check. This amount will be added to your commission account. Once your account equals $20, a check will be issued when the next month’s checks are processed. If you go inactive and choose not to use the account credit, you will be sent a check during the next month’s commission run.

5


D. Payment Designation & Reporting Commission and override payments will be issued to Consultants in the name documented on the Independent Consultant Agreement only. The first month of each calendar year, Thirty-One issues tax form 1099 for the previous year. A 1099 will be issued for each Independent Consultant that has earned bonuses, incentives, prizes, etc. of $600 or more, or has submitted more than $5,000 in Personal Retail Sales. The 1099 will report bonuses, incentives and prizes paid by the Company, but cannot report any retail profit which may have been realized by the Consultant in conducting their business. E. Lost Checks If a Consultant does not receive a Payment within 10 business days after the mailing process is complete, one will be reissued after a three day waiting period, beginning the day the check was reported lost.

1.13 - Change of Address or Telephone To ensure timely delivery of products and support materials it is critically important that the Company’s files are current. Two weeks advance notice of such changes must be provided to the Company to guarantee proper delivery. These changes are the responsibility of the Consultant and can be updated in your profile on your Back Office.

1.14 - Safeguarding Customer Information It is the Consultant’s responsibility to safeguard all credit card information, maintain a secure Internet connection on any computer using Party Plan ordering, and to safely destroy ALL customer credit card information after the order is completed.

1.15 – Leaves of Absence A. Maternity Leave Thirty-One recognizes there may be times that a Consultant needs to address personal matters arising from maternity without penalizing her payment status. The Company will allow a Director and above to continue to receive overrides on her group for up to three consecutive months without the personal retail volume qualification of $1000 per month being maintained should her request for a temporary lapse be approved. All other qualifications MUST be maintained. A Consultant’s request for a temporary lapse in qualification must be received in writing, not by e-mail, at least 30 days in advance of the start of the period requested. Please download a Maternity Leave Request Form from the Director’s site at thirtyonetoday.com Mail your form to: Thirty-One • 231 Commerce Blvd., Johnstown, OH 43031. B. Military Leave If you move to a U.S. military base outside the 50 states and District of Columbia, you may continue to receive Company literature and order samples and products for personal use. However, you may not sell products or sponsor other Consultants in overseas U.S. military bases. Although we do not mail printed materials outside of the 50 United States and District of Columbia, you may continue to receive Company e-mails while you are overseas. Upon your return, you will reacquire your personal group in its current form if you re-qualify under the Career Plan. You will not be required to purchase a new Starter Kit. This policy allows Consultants who move overseas to stay in contact with the Company and remain current with the business. If you move to an overseas military base, you must complete a Military Leave Request Form. Please download a Military Leave Request Form from the Consultant Toolbox at thirtyonetoday.com. Mail your form to: Thirty-One • 231 Commerce Blvd., Johnstown, OH 43031 6


C. Relocation Outside the U.S. If you leave the U.S. for reasons other than military relocation, you may request to be placed on hold status for a year. If you return to the U.S. within the year, you will be restored to active status upon re-qualification under the Career Plan. If you return after having being gone for more than a year, you will be required to submit a new Independent Consultant Agreement and purchase a new Starter Kit. While on hold status, you will not receive any mailings or information from the Company. Your personal group will roll up to your sponsor unless and until you are reactivated.

1.16 - No Solicitation As an Independent Consultant, you are free to participate in other multilevel or network marketing business ventures as long as you do not sell or promote Company products in conjunction with the products or services of any such business. However, during the term of this Agreement and for a period of six months following termination, you may not recruit other Thirty-One customers or Consultants for any other business.

1.17- Indemnification You are fully responsible for all verbal and written statements made regarding Company products, services, and the Compensation Plan. You will indemnify and hold the Company harmless from any and all liability resulting from your representations or actions. This provision will survive the termination of the Independent Consultant Agreement.

1.18 - Confidentiality All Consultant lists are confidential, are proprietary property of the Company, and constitute a business trade secret. These lists may be made available to you for the express purpose of supporting you in your personal group to further develop your business. You may use these lists only in connection with your business and for no other purpose, you must keep the lists confidential, and you must not make the lists available to any third parties. Any wrongful disclosure of the lists or of the information on the lists regarding customers or Consultants will cause immediate and irreparable damage to the Company. The Company will pursue all legal remedies available to it against any Consultant who violates this policy.

1.19 - Change to the Consultant Agreement Because federal, state, and local laws, as well as the business environment, periodically change, the Company reserves the right to amend the Consultant Agreement and its prices at its sole and absolute discretion.

7


Section 2: Selling

ďżź You must purchase and sell Company products according to the terms, conditions, and policies stated in the Agreement, as the Agreement may be amended from time to time. In addition, you must comply with local, state, and federal laws and regulations applicable to all aspects of your Thirty-One business.

2.1 – Selling Company Products Exclusively at Thirty-One Parties Sales Consultants are permitted to sell only Thirty-One Gifts products at Thirty-One Parties. Consultants may not demonstrate or sell any other products at Thirty-One Parties.

2.2 - Venues You are encouraged to take creative approaches in your selling. However, your first approach should always be a Home Party for sales, booking and sponsoring opportunities. Thirty-One Consultants must refrain from selling, recruiting, advertising or displaying product or in any way conducting business in a retail store or kiosk. The purpose of this policy is to maintain the integrity of the Party Plan business and to protect our trademark which is registered as a direct-to-the-consumer business. Consultants are prohibited from advertising, promoting or selling for their business through mail order houses, distribution centers, catalogs, magazines, electronic computer networks, online auctions such as eBay, or any other e-commerce venues on the Internet and the World Wide Web. See the Advertising/Marketing/Internet section of this document for additional information. If you have any questions about whether to participate in an event, you should contact the Company before proceeding. You may be able to receive a Catalog Gift Certificate for participating in fairs and trade shows. You can download a Fair/Tradeshow Catalog Certificate Request Form from the Consultant Toolbox on thirtyonetoday.com.

2.3 - Trade Shows, Expositions, and Other Sales Forums Consultants may display and/or sell Thirty-One products at trade shows and professional expositions; products cannot be sold for more than the suggested retail price. Trade shows and expositions can be good sources for leads for new Hostesses and recruits, and your objective at such events should be to book parties and get recruit leads. While the sales you may make at such events may benefit you in the short-term, your business will become stronger through bookings and recruits. Consultants should be sure to obtain names, addresses and phone numbers of guests who visit their booth in order to follow up after the event, and should also carefully consider the amount of time spent preparing for this type of event and how that affects available time to conduct home parties. Note that all permits, fees, licenses and insurance if required for such events are the responsibility of the Consultant, unless specifically arranged by the Company as a Company Event. Cash and Carry of Thirty-One Products may be applicable; please contact the Company for permission and clarification.

2.4 - Online Auction Sales You may NOT sell Company products through any online auction service for the purpose of creating commissionable sales or recruiting leads. You may NOT sell Thirty-One products through a website that is not sponsored by Thirty-One. In order to protect the price and value of Thirty-One products, we must enforce this policy. Thirty-One provides a professional website as a resource for our Consultants for a low monthly fee. This website provides the option for personalization and will total the correct shipping and tax amounts required by state regulations.

2.5 - Territory Restrictions You may sell and sponsor throughout the United States at the price recommended by the Company. There are no exclusive territories granted to anyone, and no franchise fees are required. 8


2.6 - International Sales Due to complex legal and tax considerations involving international sales, no sales or recruitment efforts may be made outside the 50 states.

2.7 - Commercial Outlets and Sales The Company strongly encourages the retailing and selling of it’s products through person-to-person contact via home parties. Consultants may not display or sell Thirty-One products in any retail establishment or through a web site, except those provided or approved by the Company. The commercial sale of Thirty-One products is forbidden except with prior written approval from the Company. The term “Commercial Sales” means the sale of Thirty-One products to a third party who intends to resell the products to an end consumer.

2.8 - Additional Businesses In order to protect and strengthen the Thirty-One brand, Consultants who may operate another business from their home or in a separate location must run that business and their Thirty-One Gifts business separately. Consultants may not promote their other business or sell products from that business or any other at any Thirty-One Gifts Party or event.

2.9 - Stop Sell/Backorder Lists

From time to time, demand for a popular item will exceed supply and that item will need to be placed on the Stop Sell, Backordered or Discontinued Items list provided on the weekly Business Update. Consultants are responsible for checking the list prior to conducting a party. Items on the Stop Sell list will not be available for ordering until they are taken off the list. Definitions of these terms are as follows: Stop Sell: Status indicates when quantities are too low to fulfill orders in a reasonable amount of time. The item is not “Discontinued” but will be available for ordering at a later date. When possible, we inform you to Stop Sell prior to the Stop Sell date so that you may submit current orders for the items. Backordered: Occur when an item’s overwhelming popularity exceeds our ability to receive sufficient quantities to meet demand but replacement inventory will be available in a reasonable amount of time to fulfill the orders. Discontinued: Indicates that an item is expected to run out before the end of the catalog season and it is not planned to be carried over into the next catalog.

2.10 - Door Prizes If you decide to offer door prizes, you should observe the following guidelines: • Door prizes may be offered only if there is no admission or registration charge. • All guests must have equal opportunity to win the door prize. • No purchase may be required to be eligible for a door prize.

2.11 - Personalization Limitations and Restrictions

Personalized items are non-returnable unless there are manufacturer defects. Once submitted, personalized orders cannot be changed. Consultants are responsible for double-checking personalization prior to submitting orders. Due to copyright, trademark and other proprietary limitations, we cannot sew college or professional sports teams, logos, names, phrases, taglines, nicknames or any representations that are the property of another company or organization. Examples include but are not limited to “Life is Good”, “Just Do It”, “Go Bucks,” etc. Further, Thirty-One reserves the right to refuse embroidery requests that are deemed to be vulgar, profane or otherwise offensive. If for any reason we refuse an order, we will issue a gift certificate as a substitution. 9


Section 3: Ordering 

3.1 - General Ordering Information As a Consultant, you will place three types of orders with the Company: Party Orders, Retail Customer Orders, and Business Supply Orders. Due to increased opportunity for error, these cannot be placed over the phone with Customer Service.

3.2 - Party Orders Party orders are submitted for fulfillment on the Consultant’s Virtual Office. You should submit all orders to the Company when a party is closed by the Hostess. All orders must include full and proper payment. Make sure to fill in all areas on the order when entering it on the webpage including the name and address section for each customer and Hostess, as well as the Party Order Form. Both serve as receipts for credit card purchases. This is important for your records, which should be kept for one year. Party orders must be $200 in commissionable sales (Hostess Rewards, tax and shipping and handling excluded.) For more details, refer to the How To Order Guide on thirtyonetoday.com. Shipping and Handling on Party Orders is 8% of the retail value if the order is shipped to the Consultant. Orders placed at a party that are shipped directly to a customer carry a shipping charge of 8% + $4 on the retail value of the customer’s order. Once an order has been submitted, it cannot be changed.

3.3 – Order Submission & Deadlines All orders must be submitted through your Virtual Office on the Thirty-One website. Orders must be received before midnight Eastern Time on the last calendar day of the month to be included in that month’s volume and bonus qualification for commissions, incentives and any other specials. The Company is not responsible for delays in posting due to Internet transmission delays, processing time on the Company’s servers, or inability to access the Company website or Virtual Office for any reason.

3.4 - Credit Card Payments The Company will accept and process all major credit card payments from your customers on your behalf, at no additional cost to you. If any problems arise with payment by credit card, it will be the sole responsibility of the Consultant to collect payment. The Company does not assume responsibility for declined credit cards. If a customer’s credit card is declined, the Consultant can either remove the order from the party or collect alternate payment from the customer prior to submitting the party order to the Home Office. The billing address for the credit card must match the address the customer lists on the order form. If it does not match, the credit card company may not accept the charge. You are then responsible for collecting the funds or paying for the order. It is the Consultant’s responsibility to safeguard all credit card information, maintain a secure Internet connection on any computer using Party Plan ordering, and to safely destroy ALL customer credit card information after the order is completed. For your files, you should keep the Order Form on file for one year. This is for your protection in case there is a disputed charge.

10


The Company cannot charge or refund to cards not used on an order. The Consultant should also process guest credit cards in a careful manner, assuring the proper amount is charged only once, and avoiding unnecessary multiple authorizations. Cards should be entered as close as possible to the time you will close and submit your party, as “old” authorizations may not be honored by the card processor.

3.5 - Business Supply Order Orders for Consultant supplies can be placed via the website. Here are some simple rules to follow when ordering business supplies: 1. Know the quantities, item numbers, and descriptions of the supplies you wish to purchase. Our Business Supply List is available on the Consultant Toolbox on thirtyonetoday.com. 2. Supplies are generally taxed at full retail; however, this rule does not apply to orders in several states. The sales tax rate is determined by your “ship to” location. Rates are subject to change. 3. Shipping and handling charges for supplies are calculated on a separate table from Party orders. Shipping and handling charges are based on the full retail of your Supply order. The shipping/handling cost is $4.00 + 8%. 4. For faster delivery of your supply order, please do not include personalized items. Personalized items should be placed on a separate order.

3.6 - Retail Customer Orders and Orders Under $200 Retail Customer orders are orders that do not meet the $200 party minimum. If you have a party that does not reach the $200 level or a customer that wants to order just a few items, those orders would fall under Retail Customer Orders. Shipping rates for Retail Customer Orders are $4.00 + 8%

3.7 – Customer Order Cancellations The federal government requires that every customer who places an order or makes a purchase from you must receive a copy of the Notice of Cancellation found on the back of the Guest Order Form. This gives the customer 3 business days from the time the order form is placed to cancel the order. If a customer does cancel within 3 days and you have already submitted the order to the company, call the Customer Service Department.

3.8 – Address Changes To ensure timely delivery, Consultants must provide the Company with the correct shipping addresses and telephone numbers for all orders. If an address change is needed, Consultants must call Order Support immediately. The Company cannot guarantee that changes to shipping addresses can be made prior to shipment. If an order is returned to the distribution center because of an incorrect address, a service fee of $11 per carton could be charged to the Consultant in addition to the re-shipment fee. For orders where a re-direction of an already shipped order is requested, an $11 per carton fee could be charged to the Consultant’s credit card on file.

11


3.9 – Customer Service Call Center Hours Our Customer Service Staff is available to assist you with questions and problems with your orders during the hours of operation listed below. Email communication is always preferred. Hours of Operation: Monday - Friday 8:30 am to 5:00 pm Eastern Contact Information: Office 740-966-3800 Fax 740-967-9910 ordersupport@thirtyonegifts.com

3.10 - Turn-Around Time Standards Item Kit Ship* Business Supply Order Ship* Party Order Ship* Return Processing Start Swell Rewards

Standard Within 4 business days from Consultant setup Within 10-15 business days from submission of order Within 10-15 business days from submission of order Within 10 business days from receipt of Return Request Within 10 business days from when commissions are run

* Order shipping times may take longer if there are credit card acceptance problems.

3.11 - Confirmation of Order If the products received do not match the order of the products are defective, you should notify the Company of the discrepancy or damage immediately. Please refer to our Return Policy for details on the amount of time allowed for returning product.

3.12 - Back Orders From time to time, back orders may occur. Please refer to the Business Update at thirtyonetoday.com for current product availability and shipping information. Definitions of these terms are as follows: Stop Sell: Status indicates when quantities are too low to fulfill orders in a reasonable amount of time. The item is not “Discontinued” but will be available for ordering at a later date. When possible, we inform you to Stop Sell prior to the Stop Sell date so that you may submit current orders for the items. Backordered: Occur when an item’s overwhelming popularity exceeds our ability to receive sufficient quantities to meet demand but replacement inventory will be available in a reasonable amount of time to fulfill the orders. Discontinued: Indicates that an item is expected to run out before the end of the catalog season and it is not planned to be carried over into the next catalog.

3.13 - Sales Tax All taxable purchases made by you are subject to sales tax. In order to relieve you of the administrative task of collecting these taxes and forwarding them to the states, the Company will collect and remit sales tax on your behalf, except as stated in this manual.

12


3.14 - Hostess and Customer Specials The Company may offer Hostess and Customer Specials. A typical Hostess or Customer Special is a popular item that is given a temporary price reduction (i.e., for 30 days). To qualify for these specials, the Hostess or customer must meet the qualifications listed on that month’s flyer. When entering an order for a Hostess or Customer, simply make sure the qualifications have been met. Then enter the order for the special. List the special item at the new (reduced retail) price. Sales on Customer Specials are commissionable and are treated just like any other order. Hostess Specials are not commissionable. Customer and Hostess Special orders must be submitted by the last day of the sale. Check the terms and conditions section of any special promotional announcement for qualifications and instructions. Hostess items are not commissionable. Hostess Rewards are provided by Thirty-One on your behalf. Hostesses cannot purchase Customer Specials with Hostess Rewards, ½ price items or discounts. The Company does not offer refunds, only exchanges, on Hostess and Customer Specials.

3.15 - Hostess Rewards Before earning the Hostess rewards, customer orders for the party must total $200.00. (This is the Hostess Plan Base Amount.) Hostess shipping: She pays 8% of the value of her free items & the value of the discounted items. i.e. she receives $45 in free products and then she has $30 item that she is getting at 1/2 price. She will pay shipping on 45 + 30=$75.00 x 8% = $6.00 shipping. The Hostess will receive free shipping if the subtotal of the party is $500.00 or more. Taxes would be calculated on the (1/2 price item) $15.00 + $6.00 = $19.50 x tax rate. If she orders other products she will also pay shipping on those as well.

3.16 - Clearance & Outlet Items ALL SALES ARE FINAL AND ARE PURCHASED AS IS. NO RETURNS. The Company reserves the right to offer special clearance sale opportunities from time to time. All clearance items are non-commissionable, and they do not count toward monthly qualifications or maintenance for personal rank or commissions. In the event that inventory is depleted on clearance or outlet items, the Company may make substitutions.

13


Section 4: Advertising, Marketing, Internet All Consultants shall safeguard and promote the good reputation of the Company and its products. The marketing and the promotion of Thirty-One, the Thirty-One opportunity, the career plan, and the Thirty-One products shall be consistent with the public interest, and must avoid all discourteous, deceptive, misleading or immoral conduct or practices. Please be sure to identify yourself as an Independent Consultant with Thirty-One Gifts. This includes but is not limited to advertisements or listings in phonebooks, newspapers, on the radio or the Internet.

4.1 - Adherence to the Thirty-One Marketing Plan As a Thirty-One Consultant, you are required to market and promote your Thirty-One business only as set forth in official Thirty-One literature and in a manner consistent with Thirty-One’s policies. You may not offer the Thirty-One opportunity through, or in conjunction with, any other system, program or offering.

4.2 - General (applying to both online and offline marketing and promotion) It is your responsibility to safeguard and promote the good reputation of the Thirty-One brand; to ensure that your marketing efforts contribute to the public interest; and to avoid discourteous, deceptive, misleading, unethical or immoral conduct or practices.

4.3 - Independent Thirty-One Consultant Logo / Identity When using Thirty-One in any communication, you must use the Independent Consultant version of the Thirty-One logo. Using any other Thirty-One logo requires written approval. When representing Thirty-One in any communication, you must use the Independent Consultant title after your name. Examples: Susan Smith, Independent Thirty-One Consultant Susan Smith, Independent Thirty-One Director Susan Smith, Independent Thirty-One Executive Director Susan Smith, Independent Thirty-One Senior Executive Director Please note that when using Thirty-One with your name, it must be done using a regular font or typeface and not the actual Thirty-One logo.

14


4.4 - Trademarks and Copyrights The names Thirty-One and Thirty-One Gifts are trademarks of Thirty-One, and are of great value to the Company, and are supplied to you for your use only in an authorized manner. To maintain the integrity of our brand and trademarks, we must safeguard the use of all trade names, trademarks, designs, images and symbols. You may not use Thirty-One trade names, trademarks, designs, images or symbols without prior written permission, except as outlined in this section. Video or audio recordings of company events, training and/or speeches are also copyrighted, and may not be distributed without written permission. If you have questions or would like consideration for approval for logo usage, please contact the Company. Additionally, Consultants are prohibited from producing marketing materials or promotional items with ThirtyOne logos, products or photos that are then sold to other Consultants, individuals or organizations. You may use the Company name and marks on materials for your team meetings and interactions with other Thirty-One Consultants. However, you may not produce material that will be circulated to the public in any form without official written approval of the material by the Thirty-One Marketing team. An Advertising Request for Approval (found on Thirtyonetoday.com) must be filled out completely and accompany your proof. All proofs can be submitted to Compliance@thirtyonegifts.com for approval. Please allow five business days for review and written approval. As a Consultant you may use the Thirty-One/Thirty-One Gifts names in the following manner: Consultant’s Name Thirty-One Independent Consultant / Director Example: Betty Smith Thirty-One Independent Consultant You are not allowed to use the name Thirty-One in any form in your team name, a tagline, an external website name, your personal website address or extension, in an e-mail address, as a personal name, or as a nickname. Additionally, only use the phrase Thirty-One Independent Consultant/Director in your phone greeting or on your answering machine to clearly separate your Thirty-One business from Thirty-One. For example, you may not secure the domain name www.buythirtyonegifts.com; nor may you create an email address such as thirtyonegiftssales@hotmail.com. There are numerous words, images, phrases, taglines, and/or ideas developed or coined within the Thirty-One community, and used by Consultants to promote Thirty-One, their Thirty-One business, or their Thirty-One team. No Consultant can claim the exclusive right to use such words, images, phrases, taglines, or ideas that are in the Thirty-One community domain for use by all Thirty-One Consultants. Therefore, you are not allowed to claim ownership of any such words, images, taglines, names or phrases, and agree that you will not seek to register any such words, images, phrases, taglines, names or phrases as a trademark, copyright, or domain name. If you do, you agree to assign any such trademark application or registration, or copyright or domain registration to Thirty-One upon demand. In addition, Thirty-One may elect to take disciplinary action against you as provided in Section 9.4 and 9.5 below. By entering into the Consultant Agreement, you hereby assign any rights that you may have to or in any such intellectual property to Thirty-One and you further agree that Thirty-One may, at its discretion, seek to register any such words, images, taglines, names or phrases as trademarks, copyrights, or domain names, as the case may be.

15


4.5 – Online Advertising, Marketing and Promotion

We regularly receive requests for approval of self-designed marketing materials. We are developing a comprehensive style guide to be released later this year. In the meantime, we have worked with our Marketing department to provide you with some initial tools to help you remain compliant and creative. These will be available in April on ThirtyOneToday.com.

4.6 - Domain Names, E-mail Addresses and Online Aliases You are not allowed to use or register Thirty-One or any of Thirty-One’s trademarks, product names, or any derivatives, for any Internet domain name, email address, or online aliases. Additionally, you cannot use or register domain names, email addresses, and/or online aliases that could cause confusion, or be misleading or deceptive, in that they cause individuals to believe or assume the communication is from, or is the property of Thirty-One. Examples of the improper use include but are not limited to: thirtyonegiftsgal@msn.com; www.thirtyonegiftsisgreat.com; www.myspace.com/thirtyonegiftsfan; www.thirtyonegifts.com/official, or Thirty-One or Thirty-One Gifts showing up as the sender of an email.

4.7 - Thirty-One Hotlinks When directing readers to your registered external site (see section 4.20) or replicated site (see section 4.18) it must be evident from a combination of the link, and the surrounding context, to a reasonable reader that the link will be resolving to the site of an independent Thirty-One Consultant. Attempts to mislead web traffic into believing they are going to a Thirty-One corporate site, when in fact they land at a Consultant site (replicated or registered external) will not be allowed. The determination as to what is misleading or what constitutes a reasonable reader will be at Thirty-One’s sole discretion.

4.8 - Approved Consultant Websites The term Replicated Website refers to the external-facing Consultant website offered by Thirty-One to you. The term registered external website refers to your own Thirty-One-approved personal website (if you have one), or other Thirty-One-approved web presence that is hosted on non-Thirty-One servers and has no official affiliation with Thirty-One. You are not allowed to monetize your Replicated Website or your registered external website through affiliate programs, adSense or similar programs. You may not offer products or sell through any websites other than your replicated website through Thirty-One.

4.9 - Online Classifieds You may not use online classifieds (including Craigslist) to list, sell or retail specific current Thirty-One products or product bundles. You may use online classifieds (including Craigslist) for prospecting, recruiting, sponsoring and informing the public about the Thirty-One business opportunity, provided Thirty-One-approved templates/images are used. These templates will identify you as an Independent Thirty-One Consultant. If a link or URL is provided, it must link to your Replicated Website or your registered external website.

4.10 - eBay / Online Auctions You may not list or sell current Thirty-One products on eBay or other online auctions, nor may you enlist or knowingly allow a third party (customer) to sell current Thirty-One products on eBay. This includes gathering orders for a party by a Hostess or customer via eBay or other online auctions.

4.11 - Online Retailing You may not list or sell Thirty-One products on any online retail store or ecommerce site, nor may you enlist or knowingly allow a third party (customer) to sell Thirty-One products on any online retail store or ecommerce site.

16


4.12 - Banner Advertising You may place banner advertisements on a website provided you use Thirty-One-approved templates and images. All banner advertisements must link to your Replicated Website or a registered external website. You may not use blind ads or web pages that make product or income claims that are ultimately associated with Thirty-One products or the Thirty-One opportunity.

4.13 - Unsolicited E-mail Spamming / Mass E-mailing

You are not allowed to transmit mass, unsolicited emails to promote Thirty-One, its products or the Thirty-One opportunity to people who you do not know, or who have not given you permission to contact them. People who are ‘opt in’ subscribers, who have initiated a request to be included in bulk emailing, newsletter or other standardized communications from you, are allowed.

4.14 - Spam Linking Spam linking is defined as multiple consecutive submissions of the same or similar content into blogs, wikis, guest books, websites or other publicly accessible online discussion boards or forums and is not allowed. This includes blog spamming, blog comment spamming and/or spamdexing. Any comments you make on blogs, forums, guest books etc. must be unique, informative and relevant.

4.15 - Social Networking Sites (Facebook / MySpace / LinkedIn) You may use social networking sites (Facebook, MySpace, LinkedIn, blogs, forums and other social shared interest sites) to share information about the Thirty-One business opportunity and for prospecting and sponsoring; however, these sites should only be used as a relationship-building tool and may not be used to sell or offer to sell specific Thirty-One products. Profiles you generate in any social community where you mention or discuss Thirty-One must clearly identify you as an Independent Thirty-One Consultant, and when you participate in those communities you must avoid inappropriate conversations, comments, images, video, audio, applications or any other adult, profane, discriminatory or vulgar content. The determination of what is inappropriate is at Thirty-One’s sole discretion, and offending Consultants will be subject to disciplinary action and/or termination. The Company owns the Official Thirty-One Fan Page on Facebook. (Facebook recommends that if you are a fan who would like to create a space for fans to share their thoughts and opinions, you’ll need to create a Facebook Group. Only an official representative of an organization is permitted to create a Facebook Page.) A Consultant may not have a Facebook Fan page denoting it as an Official Thirty-One Page (i.e., “Official Thirty-One” or “Thirty-One Gifts”) or represent themselves on any other Social Networking site as the official presence of Thirty-One Gifts. Consultants with existing Facebook pages titled “Thirty-One Gifts” without a name or other identifier attached to it are urged to create a new page to avoid any confusion. We suggest incorporating your own name in the title, i.e., “Sally’s Thirty-One Gifts.” For those Consultants who have an existing page with a large fan base who are unwilling to do this, we request that the Consultant place this Disclaimer in the box directly beneath her profile image: “This is a personal Thirty-One Gifts fan page and not the Official Thirty-One Gifts fan page. Thoughts and statements shared on this page are not those of Thirty-One Gifts. To purchase Thirty-One products or book a party, you may contact me with the information provided below.” NOTE: Consultants cannot promote themselves or sell product on the official Facebook page. Official Thirty-One Gifts Page: http://www.facebook.com/pages/ThirtyOne-Gifts-Company/229487947907 17


Personal Contact Information Sally Consultant 1234 Your Address City, State Zip” Use of Thirty-One’s trademarks, logos, banner ads and images on social networking sites must be current and must come from the Thirty-One approved library. Consultants who are representing Thirty-One on a social networking site using Thirty-One’s trademarks, images, logos, or links to your Replicated Website or registered external website may not also feature content about another direct selling business opportunity. If a link is provided, it must link to your Replicated Website or a registered external website. You may not use blog spam, spamdexing or any other mass-replicated methods to leave blog comments. Comments you create or leave must be useful, unique, relevant and specific to the blog’s article.

4.16 - Digital Media Submission (YouTube, iTunes, PhotoBucket etc.) You may upload, submit or publish any Thirty-One related video, audio or photo content that you develop and create as long as it aligns with Thirty-One values, contributes to the Thirty-One community greater good and is in compliance with Thirty-One Policies and Procedures. These submissions must clearly identify you as an Independent Thirty-One Consultant (either in the content itself and/or in the content description tag), must comply with all copyright/legal requirements, and must state that you are solely responsible for this content and not Thirty-One. You may not upload, submit or publish any content (video, audio, presentations or any computer files) received from Thirty-One or captured at official Thirty-One events or in buildings owned or operated by Thirty-One without prior written permission.

4.17 - Sponsored Links / Pay-Per-Click (PPC) Ads Sponsored links or pay-per-click ads (PPC) are acceptable. The destination URL must be to either your Replicated Website or to a registered external website. The display URL must also be to either your Replicated Website or to your registered external site, and must not portray any URL that could lead the user to assume they are being led to a Thirty-One Corporate site, or be inappropriate or misleading in any way.

4.18 - Thirty-One Replicated Websites When you sign up as a Thirty-One Consultant you receive a Thirty-One Replicated Website for 90 days to facilitate the easiest online presence for you. After 90 days, a subscription fee will apply. You are solely responsible and liable for the content that you add to your welcome message on the Thirty-One Replicated website and must regularly review the content (every 30 days) to ensure it is accurate and relevant. You may not alter the branding of your Replicated Website, and you may not use your Replicated Website to promote, market or sell non-Thirty-One products, services, events, or business opportunities. Specifically, you may not alter the look (placement, sizing etc.) or functionality of the following: The Thirty-One Independent Consultant Logo Your Name Because your Replicated Website resides on the thirtyonegifts.com domain, Thirty-One reserves the right to receive analytics and information regarding the usage of your website.

18


4.19 - External / Personal Websites (Effective April 21, 2011)

External/personal websites designed to promote your Thirty-One business are not allowed. Thirty-One provides Consultant websites for a nominal monthly fee that are designed to fairly and consistently promote your Thirty-One business. Team websites are still allowed as long as they are password protected and have been approved by the Home Office.

4.20 - External Website Content You are solely responsible and liable for your own website content, messaging, claims, and information and must ensure your website appropriately represents and enhances the Thirty-One brand and adheres to Thirty-One’s guidelines and policies. Additionally, your website must not contain any information about another direct selling opportunity, disingenuous popup ads or promotions or malicious code. Decisions and corrective actions in this area are at Thirty-One’s sole discretion.

4.21 - Thirty-One Independent Consultant Image Requirement To avoid confusion, the following three elements must be prominently displayed at the top of every page of your registered external website: 1. The Thirty-One Consultant Logo 2. Your Name and Title 3. A Thirty-One Corporate Website Redirect Button Although Thirty-One branded themes and images are desirable for consistency, anyone landing on your page needs to clearly understand that they are at an Independent Consultant site, and not a Thirty-One Corporate page.

4.22 - External Sites Must Exclusively Promote Thirty-One Your Thirty-One external website must contain content and information that is exclusive to Thirty-One. You may not advertise other products, business opportunities, events, or services other than the Thirty-One product line and the Thirty-One opportunity.

4.23 - No eCommerce or Stock-and-Sell Retailing Your registered external website must only facilitate the entry into your Thirty-One Replicated Website. You may not stock and sell Thirty-One products, nor may you facilitate an eCommerce environment that would facilitate this model. All orders must be placed through your official Replicated Website or Consultant Virtual Office.

4.24 - External Website Termination In the event of the voluntary or involuntary cancellation of your Consultant Agreement, you are required to remove your registered external website from public view within 10 days and redirect (forward) all traffic from that domain to www.thirtyonegifts.com. Your external website may be transferred to another Thirty-One Consultant, subject to Thirty-One’s approval, on a case- by-case basis.

4.25 - Team Websites You may use team websites for the purposes of connecting, communicating, training, educating and sharing best practices among team members. Because these sites may contain sensitive and Company-specific information, these team websites must be password protected. NOTE: Existing team websites that are not password protected must be brought into compliance with this requirement. 19


4.26 - Telephone Policy All Consultants may list themselves as “Independent Thirty-One Consultant” under their own name. No Consultant may place telephone directory display ads using the Company name or logo. You may not answer the phone by saying “Thirty-One” or “Thirty-One Gifts” that would lead the caller to believe that they have contacted the Home Office. Consultants choosing to set up a toll-free number for their business must list the number under their own name. This number cannot be listed under the company-owned trademark, Thirty-One or Thirty-One Gifts. In order to make the clear distinction to the consumer between the Independent Consultant and the Home Office, Consultants should answer their phone/answering machine by identifying their status with the Company. example: “Hello, you have reached the Jones residence and Suzy Jones, Independent Consultant with Thirty-One, this is Suzy Jones.”

4.27 - Media Inquiries Consultants who are contacted by reporters or representatives of the media must contact the corporate office. Consultants are not permitted to give reporters information about the Company. Any media coverage of a Consultant or the Company should be reported to the corporate office. All media interviews must be approved by and supervised by the Company.

4.28 - Home-Produced Training and Marketing Materials Consultants are prohibited from producing, distributing, or selling DVDs, videotapes, audiotapes, and other training materials bearing the Company brand and name. If you have suggestions for training material, please feel free to submit your ideas through your Director or by contacting the Home Office.

4.29 - Telemarketing All Consultants are required to comply with applicable state and Federal laws and regulations regarding telemarketing.

4.30 - Questions If you have questions or would like consideration for approval to use the Company logo, please contact the Home Office.

20


Section 5: Sponsoring Sponsoring new recruits is one of the best things you can do to grow your business and your team. A copy of the Career Path document that shows the various levels of leadership is available in the Consultant Toolbox at www.thirtyonetoday.com.

5.1 - Making Income Claims The laws of several states and the Federal Trade Commission regulate claims regarding the income that can be earned under programs such as the Thirty-One Gifts Career Plan. Because of these regulations, Thirty-One Consultants are not permitted to make income projections or disclose their own compensation when presenting the Thirty-One Gifts Career Plan. Consultants may use hypothetical income examples to explain the operation of the Career Plan, as long as it is made clear that they are hypothetical examples based solely on mathematical projections and not on actual experience.

5.2 - Holding Recruitment Presentations All Consultants must present the Thirty-One Gifts Career Plan as described in the Consultant Handbook with no variations or deviations when presenting the Thirty-One Gifts opportunity to prospective Consultants. Consultants must not combine these presentations with any other presentations or encourage prospective Consultants to make purchases or payments other than those described in the Thirty-One Gifts Career Plan. The Career Path document can be found in the Consultant Toolbox at thirtyonetoday.com.

5.3 - Sponsoring Consultants The following actions are prohibited under all circumstances. • The enrollment of non-existent persons as Consultants • Enrolling individuals without their knowledge and/or execution of an Independent Consultant Agreement • The fraudulent enrollment of Consultants • The enrollment of an active or terminated Consultant who has been active within the preceding one year, within a different line of sponsorship. The Company does not allow recruitment of Consultants from one sponsorship line to another.

5.4 - New Consultant Application Processing Thirty-One accepts new Consultant Agreements in two ways: • Electronically online via the Sponsor’s personal Company hosted website (recommended) • Using a paper form application, given by a recruiter, signed by the new Consultant Electronic Online Applications: • New Consultant Applications are recorded when the Company records the online submission. Neither sponsoring Consultants nor enrollees may request applications be “held” by the Company for any reason. Starter Kits will be processed for shipment only after the new Consultant has confirmed their acceptance of the terms and conditions of the Consultant Agreement via an email confirmation. The online system will not accept applications with incomplete information or invalid credit cards. • Applications received by the Company on any given day will be recorded for that day. The Company will confirm via e-mail the acceptance of a new Application to the Sponsor. • The credit card provided on the online agreement must be authorized for use to purchase the Starter Kit and to be retained on file by the Company for other charges which may become due under the agreement.

21


Paper Form Applications: • New Consultant Applications are recorded when accepted by the Company. Neither sponsoring Consultants nor enrollees may request applications be “held” by the Company for any reason; Starter Kits will be processed for shipment upon acceptance of the application. Paper form Applications may be submitted via mail or Fax. Incomplete information, invalid credit cards, credit cards not authorized by the cardholder, or no e-mail address, among other things may result in delay of acceptance or rejection of an application. • Applications received by the Company on any given day will be accepted for that day as long as the Application is valid, complete, and without error. The Company will confirm via e-mail acceptance, rejection, or delay of any application within 2 business days of receipt. If an application is rejected, the entire application must be resubmitted. • If the sponsoring Consultant is notified of a delay in acceptance pending additional information, the sponsoring Consultant must provide the needed information within 1 business day – The application will be recorded when all required information is accepted. • Should a sponsoring Consultant not receive a confirmation from the Company within 2 business days of the expected receipt, it should be assumed that the application or additional information has not been received by the Company. It is the sponsoring Consultant’s responsibility to verify the status of any specific application prior to the close of any applicable bonus or contest period. The Company is not responsible for late deliveries, misrouted or lost applications, or applications with invalid or incomplete information being accepted in any given period.

5.5 - Roll-Up of Personal Group When a vacancy occurs in a personal group, each Consultant in the first level immediately below the terminated Consultant on the date of the cancellation will be moved to the first level of the terminated Consultant’s sponsor. For example, A sponsors B, and B sponsors C1, C2, and C3. If B terminates her business, C1, C2, and C3 will “roll up” to A and become part of A’s first level. In this example, C1, C2, and C3 would take the place of B. Please refer to the Director Binder for more details on Team Guidelines.

5.6 - Active Status If at any time you do not submit $200.00 in a consecutive three-month period, you will become inactive. To regain the active status please notify the Home Office when you have a qualified party and your website will be reactivated for 48 hours. If the party is not submitted within the 48 hours, your site will be deactivated again. We understand that your sales will vary through certain months and we want to protect you from losing your team/downline that you have worked so hard to build. However, if within that 3 month period you do not submit $200.00 in commissionable sales, your downline will roll up to your sponsor.

5.7 - Home Office Leads Consultants at a level of Senior Consultant or above who submit $1,000 in sales and sponsor one recruit for the previous month will receive Home Office leads. The list of Consultants who receive the leads is done on a monthly basis. Refer to the “Home Office Lead” tab in the Consultant’s Toolbox on www.thirtyonetoday.com.

5.8 - Sale or Transfer of Business Your Thirty-One business may not be sold or otherwise transferred to anyone else.

22


5.9 - Terminated and Suspended Consultants’ Sales – Rules Affecting Overrides In order to consider a Consultant active for qualification or for the Consultant to be paid overrides for the volume, the Consultant must not be suspended or terminated prior to the running of the commission program. Terminated Consultants aren’t in anyone’s group, and therefore, any volume they generate during the month will not be classified as commissionable or qualifying volume. Suspended Consultants are not considered active regardless of volume generated during the month, and their volume may not be counted.

5.10 – Change of Sponsor To protect the integrity of all marketing downline organizations and protect the hard work of all Consultants, the Company strongly discourages changes in sponsorship. Transfer of sponsorship is not permitted except in certain cases to be determined by the Company. Cancellation and Re-application A Consultant may legitimately change organizations by voluntarily canceling her Consultant Agreement and remaining inactive for six full calendar months. Following the six-month period, Consultants may reapply under a new Sponsor.

5.11 - Proselytizing Policy Thirty-One does not and will not target members of the sales organizations of other companies in our recruiting efforts. Likewise, Thirty-One Consultants are not to initiate contact with members of other direct sales organizations about our business opportunity. However, if anyone, no matter their background or current affiliation with any other direct selling company, initiates contact with a Thirty-One Consultant, corporate staff member, or submits an inquiry on the Thirty-One corporate website seeking information about our company or our business opportunity, Consultants are free to respond to their request as normal with the intent of recruiting them into our business.

Section 6: Returns We want your customers to be perfectly satisfied with their purchases. If for any reason a Thirty-One selection does not meet a customer’s expectations, please create a return on your Virtual Office within 90 days of receipt of the order. Personalized items may only be returned due to a manufacturer defect, or upon further review by the Company. Please refer to the Returns Processing Guide on thirtyonetoday.com.

23


Section 7: Tax Information IMPORTANT INFORMATION! PLEASE READ BEFORE CONDUCTING YOUR FIRST PARTY! Contact or consult with a reputable tax advisor. Thirty-One cannot provide tax advice.

7.1 - Sales Tax Responsibilities Thirty-One has entered into agreements or understandings in all jurisdictions where Parties are being held to remit all state and local sales and excise taxes on behalf of each Consultant. Thirty-One does not allow Consultants to remit sales taxes directly to local and state authorities (see EXCEPTION below).

• You (Consultant) must collect sales tax on all taxable merchandise ordered at your Parties

• Obtain the applicable sales tax rate from your Hostess before the Party; the sales tax rate at the time of the Party is the rate recognized by the Company. The sales tax rate is based on the “Ship To” address o the Party.

• Collect sales tax from your customers at the time of the sale

• Remit the sales tax collected to Thirty-One when you pay for your order

Please refer to the How To Order Guide on thirtyonetoday.com for additional tax information.

7.2 - Sales Tax Rates Party Orders

• Obtain your Hostess’s address or the “Ship To” address for the party.

• Obtain the applicable sales tax rate before you attend your Party, in order to have the appropriate rate. Be sure to determine whether shipping is taxable as this can vary from state to state.

• You are responsible for collecting the appropriate amount of sales tax on each order. In order to do this correctly, you must use the correct rate.

Business Supply Orders • On all other orders, such as Business Supply orders, the sales tax rate in effect at the time the order is received at the Thirty-One Corporate Office is the effective rate.

7.3 - Remitting Sales Tax You will remit sales tax to Thirty-One when you pay for your order.

7.4 - Shipping & Handling Tax Thirty-One makes one charge for shipping and handling (S&H) using a standard rate table for merchandise. These tables are based on the total retail amounts of the order, not the actual cost to deliver the products. Generally, for situations where S&H is charged as one fee and where the actual cost of delivering each individual order is not separately tracked, the amount should be added to the tax base when calculating sales tax. Some states require that S&H be taxed. For a complete list, refer to our Party Order Form.

24


7.5 - Consultant Income Tax Information As an independent contractor with Thirty-One, you are self-employed. That means you must keep your own records of sales, purchases, inventory, and expenses. Consult your tax advisor about deducting expenses and filing income tax returns.

7.6 - Form 1099-MISC Each year you will receive a Form 1099-MISC for the prior calendar year from Thirty-One, if you qualify under one or more of the following conditions: • You received $600 or more in non-employee compensation (commission) • You earned $600 or more in prizes and/or awards • The total of your non-employee compensation (commission) and your prizes and/or awards is $600 or more Form 1099-MISC should be used when filing your annual income tax returns as it will track the following items: • Customer purchases • Commissions • Start Swell Earnings • All incentive earnings Box 7 on Form 1099-MISC will include non-employee compensation paid between January 1 and December 31 for the prior calendar year plus the fair market value of any prizes and awards you received for services performed as a non-employee. Again, please consult your tax advisor about the proper reporting, quarterly estimated tax payments, and any other tax obligations required of you as an independent business owner. If you meet the required conditions to receive a Form 1099-MISC (see above), Form 1099-MISC will be postmarked by January 31 and mailed to you each year.

7.7 – Tracking Your Business You should keep careful and detailed records of the following: • 25% commissions earned from retail sales to verify amount of commission received each month • Business expenses associated with retail sales You are responsible for maintaining sales, purchases, inventory, and expense records. Consult your tax advisor about the proper reporting of income and expenses when preparing and filing your income tax returns.

7.8 - Other Business Taxes and Filings As a business owner, you are responsible for filing all required tax returns and information reporting with federal, state, and local tax authorities (except sales tax), including IRS Form 1099-MISC for payments made to others. This also includes any quarterly Social Security or self-employment taxes that may be required. If you provide prizes and/or awards or make payments or sell products to others in your group who meet the qualifying conditions noted above under Income Tax, you will need to provide each qualifying person with a Form 1099MISC postmarked by January 31 for the preceding calendar year. Various states and localities require us to register with their applicable regulatory agency in order to allow Thirty-One to do business with in their jurisdiction. Some states require Thirty-One to list the names and addresses of our independent Consultant base for which we provide tax collection service as part of this registration. Examples of these locations include but are not limited to Kentucky and Louisiana. 25


7.9 - Income Tax Returns All Thirty-One business income must be included on your income tax returns, including but not limited to: • 25% commissions earned from retail sales

 

• 1099-MISC income (If applicable, Thirty-One will provide you with a Form 1099-MISC postmarked by January 31 of each year.)

7.10 - Form 1099-MISC issued by you to customers or group members As a business owner, you are responsible for filing IRS Form 1099-MISC for payments made to others during the course of your business. If applicable, you should issue 1099-MISC, postmarked by January 31 of each year, to each individual, if: • You provide prizes and/or awards exceeding $600 in value to one person • You make payments exceeding $600 in value to an individual in your group

 

• The combined total of prizes and/or awards and other payments for services is $600 or more to an individual

7.11 - Business and Occupational Taxes and Other Taxes Check with your local jurisdiction to see if additional business and occupational taxes are due. Exceptions are noted below. (If your state is not listed, please check with your local jurisdiction to determine if you owe any additional business taxes or licenses.)

 

• Washington State - You owe Business and Occupational Tax in addition to sales tax on each order you make. This is not a pass-through tax and must be paid by you, not your customers. Thirty-One will calculate this tax and include this amount in your total amount due when you place your order. You must submit this tax when you pay for your orders. Thirty-One will remit this tax for you to the appropriate jurisdictions. You do not need to file a return to submit this tax. • New Mexico and Hawaii - New Mexico and Hawaii impose a gross receipts tax on all revenue received in their states. This tax is calculated much like sales tax. In fact, it is often called a sales tax. One difference is that these two states also require you to pay gross receipts tax on the overrides received from your downline Consultants. Thirty-One will calculate this tax and deduct this amount from your override check. Thirty-One will remit this tax for you to the appropriate jurisdictions. You do not need to file a return to submit this tax. • Louisiana - The parishes in Louisiana require you to file and pay an occupational tax based on your gross receipts. Thirty-One has agreed to provide each parish upon request with a confidential list of Consultants living in that parish for the sole purpose of the parish’s collection of the occupation tax. You must contact your local parish to receive the forms and instructions for filing. Thirty-One will not collect and remit this tax for you. You should talk to your tax advisor about your obligation for this tax.

Please consult your tax advisor regarding the collection and remittance of federal, state, and local taxes for your business

26


Section 8: Compliance & Prohibited Practices Violation of these policies could result in disciplinary action, up to and including termination of your Consultant Agreement.

8.1 - Distributing retail sales orders or intentionally placing recruits in a Downline organization for the sole purpose of manipulating the amount of payment you would receive in the Thirty-One Career & Income Plan is prohibited. Example of prohibited practice - Sue is a Director and Sally is one of Sue’s personally sponsored recruits. Sally has not submitted any personal sales for the month, so Sue gives one of her orders to Sally so that Sally qualifies as active. Sally was not an active participant in making the sale or taking the order. Example of prohibited practice - Jane is an Executive Director and Ellen is a Senior Director in Jane’s Downline. Ellen has lost one of her personally sponsored active recruits and may not qualify as a Senior Director this month. Jane then gives Ellen a new recruit, Betty, just so that Ellen qualifies as a Senior Director for the month. Ellen does not know Betty and was not an active participant in sponsoring Betty.

8.2 - Consultant’s purchases from one another will not be counted for monthly volume or contest credit. Example of prohibited practice - Ann is a Director and Pat is one of Ann’s personally sponsored recruits. Pat has not submitted any personal sales for the month, so Ann places an order with Pat to qualify Pat as active. Ann’s order will not help Pat qualify because it will not count in Pat’s PV for the month.

8.3 - The fraudulent enrollment of individuals without the knowledge of and or execution of an Independent Consultant Agreement is prohibited. Example of prohibited practice - Janet is a Director and needs one more personally sponsored recruit to qualify for an incentive trip. Janet enrolls a friend of hers, Lisa, without Lisa’s knowledge, in order to qualify for the trip.

8.4 - The Creation of Non-Existent Guests, Hosts, or Bookings to circumvent the Company’s incentive rules is prohibited. Example of prohibited practice - Kathy is a Consultant who has taken a large order from her friend Mary. When she inputs the order into the back office, she creates four fictitious, non-existent party guests, breaking up Mary’s large order into four smaller orders. This allows Kathy to purchase four guests specials on the party order. NOTE: The examples provided for each prohibited practice constitute only one type of violation. Each prohibited practice may have other types of manifestations that are not listed as examples in this document.

27


Section 9: General Policies 9.1 - Reporting Policy Violations Consultants observing a Policy violation by another Consultant should submit a written report of the violation to the Company.

9.2 - Grievances and Complaints When a Consultant has a complaint with another Consultant regarding practice or conduct in relationship to their business, the complaining Consultant should report the problem to her sponsor. If the matter cannot be resolved it must be reported to the Home Office.

9.3 - Death In the event of your death, accrued profit and commissions through the date of death will be paid to your estate. Your personal group rolls up to the first level of your sponsor. Refer to Roll-Up of Personal Group in section 5.5.

9.4 - Arbitration

Any controversy or claim (“Dispute”) arising out of or relating to this Agreement will be resolved solely in accordance with the terms of this section. If the Dispute cannot be settled by good-faith negotiation between the parties, the parties will submit the Dispute to non-binding mediation. If complete agreement cannot be reached within 30 days after submission to mediation, any remaining issues will be resolved by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. There will be one arbitrator, whose judgment on the award will be final and may be entered in any court having jurisdiction thereof. The arbitrator will not have the authority to modify or expand any of the provisions of this Agreement. All mediation/arbitration proceedings will be held in Columbus, Ohio. Each party to the mediation/arbitration will be responsible for its own costs and expenses, including legal and filing fees. This section of the Agreement will survive the termination or expiration of the Agreement.

9.5 - Disciplinary Sanctions If you engage in illegal, fraudulent, deceptive, or unethical business conduct, the Company may, in its sole discretion, take one or more of the following measures: • Issue a written warning or reprimand • Require you to take immediate corrective measures • Withhold all or part of your profit or overrides during the period that the Company is investigating any such conduct • Terminate your Independent Consultant Agreement • Institute legal proceedings for monetary and/or equitable relief • In appropriate circumstances, file criminal charges with law enforcement officials

28


9.6 - Company Meetings Attendance

Invitations to attend corporate sponsored training meetings and events are extended to one person per Independent Consultant Agreement. Guests are allowed only at meetings so allowed by the Company, and subject to specific conditions the Company may designate for that meeting, which may include pre-registration, an attendance fee, or other requirements the company may find appropriate.

9.7 - DSA Code of Ethics The DSA code of Ethics serves our consumers and sales representatives. As a proud member of the Direct Selling Association (DSA), Thirty-One supports the Association’s “Code of Ethics,” a promise to uphold the highest standards of business practices. You can view this Code at www.dsa.org/ethics. Pledging to abide by the Code’s standards and procedures is a condition of admission and continuing membership in the Association. The Code speaks to both the consumer and seller. It ensures that statements made by companies are honest and forthright. It is our expectation that Thirty-One Consultants will conduct their business in accordance with this Code.

29


item no. G520 rev 3/2011


Policies and Procedures