I'm almost certain they didn't throw it away. Human hair is an extremely lucrative business. Most of the hair that's donated to Locks for Love, I've heard, is actually sold to businesses who usually use the hair, broken down, as ingredients for other things.
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As for the old hair, I think it might be good for the garden.
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One quick hit on this is here: http://news.bbc.co.uk/2/hi/uk_news/magazine/8753698.stm
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