That's correct - if it's merchandise that Hasbro has pulled from the stores due to overstocking problems, Hasbro has said in the Q&A that have to "damage out" the items and destroy them. It sucks they can't just donate it, but there is a whole host of reasons why they can't do that.
However, if it's excess stock that was never sold to big retail in the first place (which is what I was talking about with DR), like if they made more than Walmart/Target/TRU ended up ordering, that is the stuff that will get dumped at TJMaxx/Marshalls/Ross/BigLots, or where ever.
So, if it's Yularens and Saesees from Target/Wal-Mart pegs, they'll get destroyed; but if it's unsold cases of CW Wave 13 that Target/TRU/Walmart didn't want in the first place, those'll get dumped to the overstock stores.
That's just Hasbro though - the retailers themselves can do things differently and sometimes do. I know there have been times in the past that Target has dumped unsold clearance merchandise at Salvation Army/Goodwill/etc.