Worldwide Business Support USA Key Initiatives - QA

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1 Table of Contents & Category Links List of New Terms Page 2 Charter Preferred Member Page 3 HAP Page 7 Order Process Receipting & Documenting Page 8 Page 1 of 12

2 List of New Terms Distributor (DS) Uses Herbalife products for consumption and is interested in the business opportunity to earn income from the compensation plan. Distributors build their business by selling the products and recruiting and working with their customers, Preferred Members and Distributors. Charter Preferred Member (CPM) Existing Members who convert between October 1 st and February 1, 2017 who only want to consume the Herbalife products at a discount and are not interested in the business opportunity. They are unable to sell the products or recruit others. New Preferred Members who sign-up between January 12 and February 1, 2017 will also be given Charter status. Preferred Member (PM) Uses Herbalife products for consumption at a discount; cannot sell or recruit. Anyone who enrolls or converts on or after February 2, 2017 will be considered Preferred Members. Page 2 of 12

3 Charter Preferred Member Q1: What is a Charter Preferred Member? A1: A Charter Preferred Member is any current Member who converts to Preferred Member from October 1st through February1, They will retain the discount they had at the time of conversion but lose their downline lineage (if any). Q2: What are the benefits of converting to a Charter Preferred Member? A2: There are several benefits for Charter Preferred Members: Simple conversion process (online only) Ability to increase discount if the Charter Preferred Member converts at 25%, 35% or 42% o Those at 25% & 35% can work towards 42% discount (50% not available) o Those at 42% can work towards 50% o Those who convert at 50% can remain at 50% Herbalife Advantage Program (HAP) available Annual fee waived as long as they maintain 500 PPV annually No requalification required to maintain discount percentage as long as they maintain 500 PPV annually Product purchases will be subject to sales tax on actual purchase price instead of the product s suggested retail price Access to Preferred Member website For those Distributors converting to CPM, they will receive a $25 credit on an order of $50 or more that needs to be used by February 28, The $25 credit is a one-time promotion only available to those that convert by February 1. Note: Credit will only be available for use on orders for shipping or pick up within the CPM s country of residence. Those who sign-up as Preferred Members from January 12 through February 1, 2017 will also be given Charter status and receive the $25 credit. Q3: Can a Charter Preferred Member use the promotional $25 credit on an order placed on Myherbalife.com? A3: CPMs will have the option to walk into any Sales Center and apply the credit, call Member Services to place an order, or place an order online where the credit will be automatically applied to their order prior to checkout and payment. Note: Credit will only be available for use on orders for shipping or pick up within the CPM s country of residence. Q4: Why has Herbalife decided to change the Nomenclature from Member back to Distributor? A4: Now that we will have the ability to differentiate between our business builders and our customers, we can revert to using the term Distributor. Our business builders distribute Herbalife products and therefore should be identified as Distributors. Q5: Will a Distributor be able to keep their discount if they convert to Charter Preferred Member? A5: Charter Preferred Members will retain their former Distributor level discount when converting. For Charter Preferred Members, if at the time of conversion you are at a 42%/QP level, you have the ability Page 3 of 12

4 to achieve a 50% discount. If you were at the 25% or 35% discount level the highest level you can achieve is a 42% discount. Q6: How do I become a Charter Preferred Member and/or Preferred Member? A6: Anyone who converts to a Preferred Member between October 1, 2016 and February 1, 2017 will be given Charter Preferred Member status. New and converted Preferred Members will be those who do so on or after February 2, Q7: When will segmentation begin? A7: At the beginning of October 2016 the company will be reaching out to Members who may be interested in converting to a PM. We will also be working with our leaders on this outreach program, and as a special promotion anyone who converts within October 1, 2016 to February 1, 2017 will have the esteemed title of Charter Preferred Member for as long as they remain with Herbalife, which comes with some incredible benefits: Simple conversion process (online only) Ability to increase discount if the Charter Preferred Member converts at 25%, 35% or 42% o Those at 25% & 35% can work towards 42% discount (50% not available) o Those at 42% can work towards 50% o Those who convert at 50% can remain at 50% Herbalife Advantage Program (HAP) available Annual fee waived as long as they maintain 500 PPV annually No requalification required to maintain discount percentage as long as they maintain 500 PPV annually Product purchases will be subject to sales tax on actual purchase price instead of the product s suggested retail price Access to Preferred Member website Q8: If I convert to Charter Preferred Member can I use the volume I placed prior to converting to qualify to a higher discount? A8: Yes. You will have the ability to qualify to a higher discount by counting the volume you have purchased over the past 12 months. Q9: What is the highest discount I can achieve as a Charter Preferred Member? A9: If at the time of conversion you are at a QP/42% level you have the ability to achieve a 50% discount. If you were at 25% or 35% the highest level you can achieve is a 42% discount. Q10: When can Distributors begin to sign up new Preferred Members? A10: Beginning February 2, 2017 new Preferred Members will be able to sign up on Myherbalife.com Q11: Will a Distributor be able to keep their same ID number if they convert to Charter Preferred Member? A11: Yes, whether they convert to Charter Preferred Member or Preferred Member the ID number will remain the same. Page 4 of 12

5 Q12: If I decide to convert to a Charter Preferred Member and later convert back to a DS will I need to purchase a new IBP and what will my discount be? A12: There will be no fee for Charter Preferred Members to convert to Distributor since they previously purchased an IBP/HMP. Once they convert to a DS from Charter Preferred Member, they will retain their current discount for their Personal Consumption purchases, however their purchases for retail sale will be at the discount they had when they originally converted to be a Charter Preferred Member Example: DS converts at 35%, becomes a CPM and increases discount to 42%. If they then convert back to DS, their personal consumption orders will be at 42%, however their purchases for retail sale will start at 35%. Q13: What happens if a Charter Preferred Member does not do 500PPV in a year? A13: A Charter Preferred Member will need to achieve 500PPV annually in order to retain their Charter Status. Those who do not achieve the 500PPV will lose their Charter status and become a Preferred Member rules being defined Q14: Will new Distributors that sign up after October 1st be able to convert to Charter Preferred Member? A14: Yes, a newly signed up Distributor can convert to a Charter Preferred Member as long as they convert between October 1st through February 1, Q15: If a Distributor decides to remain a DS and not convert to a CPM, are there any additional requirements needed? A15: Yes, any new or existing Distributors will need to complete a mandatory DS Training beginning mid February This training applies to all US and PR Distributors and must be completed by May Distributors who haven t completed the training by May will only be able to purchase for Personal consumption up to $200 for up to 30 days only. After 30 days they will be placed on Can Not Buy, Do Not Pay, and will not be able to directly Sponsor any new Downline until the training is completed. More information will follow. Q16: When a Distributor converts to a Charter Preferred Member, will they keep their downline? A16: If a Distributor decides to convert to a Charter Preferred Member, their downline will be moved to the next upline Distributor. A CPM is a customer, they are unable to sell, recruit or have a downline. Q17: Can a Charter Preferred Member retail product? A17: Charter Preferred Members cannot retail product. Purchases are for personal consumption only. Q18: May a Charter Preferred Member who is eligible for a 50% discount purchase from their upline? A18: Charter Preferred Members who are eligible for 50% discount must purchase directly from Herbalife. Q19: What methods are available to convert to a Charter Preferred Member? May I convert by calling Herbalife? A19: Yes, you will be able to convert online at MyHerbalife.com and by calling the US Member Services contact number Page 5 of 12

6 Q20: Will a Charter Preferred Member have to requalify for their discount percentage annually? A20: As long as they achieve 500PPV (annual requirement) they will retain their discount. Q21: Can a Charter Preferred Member/Preferred Member sell to friends at their discount? A21: A CPM/PM can NOT sell product. Q22: Are there any products or SKUs that are restricted from purchase as a Charter Preferred Member? A22: Charter Preferred Members and Preferred Members will be able to purchase all Product type SKUs. Promote SKUs will be limited to apparel and select single unit items. Literature SKUs allowed will include single unit Product Brochure, donations, Distributor Conversion Kit and Annual Fees (fee applicable to Preferred Members only). Page 6 of 12

7 HAP Q23: What is the Herbalife Advantage Program (HAP)? A23: The Herbalife Advantage Program is an automated monthly product shipment program only available in the US (not available in Puerto Rico), providing Charter Preferred Members and Preferred Members with an effortless, flexible and convenient method for selecting and automatically shipping the products they use the most. This program will not be available for Distributors. Q24: Why is the HAP Program being discontinued for Distributors? A24: As part of the FTC settlement order, Distributors are prohibited from participating in any autoshipment program or any similar program. Page 7 of 12

8 Order Process Receipting & Documenting Q25: Why do I have to declare the purpose of my order? A25: As part of the FTC settlement order our DS will begin to declare if their order is for: Personal consumption (cannot be sold to anyone) A Customer direct order (shipping direct to a customer) Retail inventory order (product you will sell to your customers) This means you will place separate orders for each category unlike today where your Inventory and Personal Consumption orders are combined Q26: How and when can a Distributor begin to submit receipts? A26: Distributors will be able to submit receipts in October A number of options will be available to them to submit their receipts. The launch in October is for DS to get experience with the tools and provide feedback for further enhancements. We strongly encourage full participation, so that when the requirement to submit receipts takes effect in May 2017 you will already be in full flow of this process. The Herbalife Point of Sales (POS) tool will be released in October 2016 as both a mobile app (Android and IOS) and mobile responsive web tool that will work on any device (smartphone, tablet, desktop, tablet) and products will be available by SKU on the POS system. At the time of placing a Customer Direct order through myherbalife.com or our Call Center, Distributors will be able to automatically generate a receipt. In element of the Herbalife POS system will be the Nutrition Club igauge. The igauge will allow Nutrition Club Operators to define their consumptions and then sell those consumptions to their NC Customers. Receipts will be automatically created and submitted to the company. The POS System will accept Credit Cards, (through PayPal or Propay), checks, money orders or cash as methods of payment. Manual receipts may also be submitted directly by sending them to the company. Q27: Will the Herbalife POS system be compatible with all other POS systems? A27: The Herbalife POS System is not integrated with other POS systems. Therefore, Distributors will need to use our POS tool for receipts to be documented. For example, although our POS tool accepts Propay as a method of payment, Distributors cannot use the Propay POS system to receipt their sale as it is not integrated with all of our internal systems and will not document the receipt. Q28: What is defined as personal consumption? A28: Order placed by Distributors for delivery to the DS for personal use. Any personal consumption orders cannot be retailed. Order will be subject to sales tax on actual purchase price not the suggested retail price. Q29: Will the changes being made for US and Puerto Rico be implemented in other countries? A29: At this time, changes are applicable for US (Including all US territories: Guam, US Virgin Islands, Northern Marianna Islands) and Puerto Rico orders and business only. Q30: In which countries do the Personal Discount % and the Retail Discount % apply? A30: This is applicable for orders for shipping or pick up in US (Including all US territories: Guam, US Virgin Islands, Northern Marianna Islands) and Puerto Rico only. Page 8 of 12

9 Q31: Once I declare an order purpose how will this information be used? A31: Declaring the order purpose will help us identify and document your activities appropriately. Q32: When I start declaring my orders on October 1st will I begin earning based on my documented volume? A32: We will not start paying out earnings using the new methods until May Q33: Does volume placed through the GoHerbalife.com site have to be receipted/documented? A33: Orders placed through GoHerbalife.com will automatically be receipted and count towards your documented volume as long as it is a profitable sale. Q34: I placed a customer direct order and was advised the order is not profitable. Why is my order considered not profitable? A34: If the price you pay as a Distributor is equal to or more than the price your customer is paying, then the order is not considered profitable. Q35: How long do I have to turn in my receipts for the purchase to be considered documented/receipted? A35: Receipts should be submitted in a timely manner, within the same month of the customer sale ideally and no later than 12 months from sale date. Q36: How do I submit a receipt on MyHerbalife.com? A36: You can create and save receipts on MyHerbalife.com. Click on the category Customers located on the left navigation Next, click on the sub-category Receipts To create a receipt, click on Create New Receipt Add the required details and save Optionally, paper receipts can be submitted using one of the following methods: Fax: Receipt Intake , or ReceiptIntake@Herbalife.com, or Mail: Herbalife Receipt Intake 950 W. 190th Street Torrance, CA Q37: How do I submit a receipt using the mobile app? A37: The mobile app will be available beginning November 19, 2016 on the itunes store and Google Play. You can search for Herbalife Point of Sale and download the app. Once the app is downloaded, you can log in and click on the Receipts category to create and submit your receipts. Q38: My annual processing fee is due. Can it be included on any order purpose? A38: Your annual processing fee may only be included on a Retail Inventory order or Personal Consumption order. It may not be included on order that is declared as a Customer Direct order. Q39: Do I need to submit a manual customer receipt for Customer Direct orders placed directly with Herbalife? Page 9 of 12

10 A39: For orders placed directly with Herbalife that you identify as Customer Direct, we will receipt this order on your behalf and it will be documented volume as long as the sale is profitable. Q40: Can manual paper receipts be sent via fax, mail or ? If so what are the Fax number, mailing and addresses? A40: Yes. Receipts can be faxed to: Receipt Intake Receipts can be ed to: and receipts can be mailed to: Herbalife Receipt Intake. 950 W. 190th Street Torrance, CA Q41: Will Distributors be able to take pictures of their receipts and upload to an application to immediately document the sale? A41: This is not currently available; however, you can take a picture of or scan your receipt and it to ReceiptIntake@Herbalife.com. Q42: I want to ship an order directly to my customer; however I m not ready with the customer order totals at this time. Therefore instead of placing a Customer Direct order may I place a Retail Inventory order to ship directly to my customer? A42: Yes, you may place a retail inventory order to ship to your customer directly. Please bear in mind; you will be responsible for creating a manual receipt to provide to your customer, as well as submitting a copy to Herbalife. Q43: Can Distributor request to have a report of receipts they ve submitted sent to them for their records? A43: Distributors will be able to have full access to and be able to download their submitted receipts via MyHerbalife.com Q44: What are the requirements for a receipt to be eligible and valid? A44: In order for a receipt to be valid it must be either submitted using one of the new receipting tools or on the standard Herbalife paper receipt form. In addition, it must demonstrate that the sale was profitable. o All receipts must identify: Method of payment Products and quantities sold Sale date Price paid Full name of purchaser 2 of 3 of the following: home address, , telephone o In addition, if the receipt is submitted using the Herbalife paper receipt form it must be signed by the Customer for it to be accepted as a valid receipt. Q45: What would be considered an invalid receipt? A45: The below reasons would render a receipt invalid, however, note this subject to change. Receipt is damaged Receipt is illegible Page 10 of 12

11 DS ID/name do not match a Distributor on system DS ID Invalid CS information missing/incomplete CS signature is missing Product information is not included Sku/Item Description Mismatch Grand Total is incorrect (did not add amounts correctly) Duplicate receipt identified Limit reached on receipted inventory (validated against skus and 12 month volume) Q46: What happens if I don t submit a receipt for an order which I sold to a Customer? A46: Any sale for which a receipt has not been submitted will not count as documented volume, it will become undocumented volume. Q47: How will receipts be validated/audited? Will they be reviewed at random, must Herbalife be able to contact customer? A47: We will have manual, automated, and random validation of receipts. Q48: Can Distributors receipt their free samples? For example, a customer comes for free the 1st day to a club, when he pays the first consumption DS creates a receipt: 2 x 6= 12 Discount 1 x6 =6 Total to pay = 6 A48: Receipts for free samples will not be accepted as it is not a profitable sale. Q49: Will Distributors pay tax on the discounted amount for personal use orders? A49: Yes. Any order declared as a personal consumption order will be subject to sales tax on the actual purchase price, not the Suggested Retail Price. Q50: Can one Distributor sell to another Distributor and have the purchase receipted/documented? A50: Only the DS who sells the product to a Customer can receipt it. We discourage selling to another DS for this reason. Q51: I am placing an order to ship directly to my customer (Customer Direct order). How can I pay for the order? A51: Since a Customer Direct (drop shipment) order is placed by a Distributor directly with Herbalife, any form of payment the Distributor is legally authorized to use is acceptable. This means the Distributor can certainly use their own credit card for payment to Herbalife and have a separate transaction with their Retail Customer to receive payment from them. Q52: Are there any products or SKUs that cannot be ordered on a Customer Direct, Retail Inventory or Personal Consumption order? A52: Yes, please see below: Page 11 of 12

12 Customer Direct: There are no restrictions on Product type SKUs. Promote SKUs will be limited to apparel and select single unit items (3 day trial pack included). Literature SKUs allowed will include single unit Product Brochures and IBPs. Event Tickets will not be allowed. Retail Inventory: Only Event Tickets will not be allowed. Personal Consumption: There are no restrictions on Product type SKUs. Promote SKUs will be limited to apparel and select single unit items. Literature SKUs allowed will include single unit Product Brochure, donations, free Today magazine, BizWorks prepaid SKU and Annual Fees. Event tickets will not be allowed. Q53: May Preferred Members place ISS (International Sales) orders? A53: Preferred Members may only purchase in their country of residence (the US and Puerto Rico). Ordering in countries other than the US or Puerto Rico is not permitted. Page 12 of 12