A package handling system for use with a plurality of packages having package identification thereon. The system of one embodiment comprises processing stations where packages having heterogeneous contents are processed. One or more identifiers are positioned at the processing stations to detect the package identifications associated with the packages. A controller is coupled to the identifier and has access to first and second package data. The first package data related to an actual condition of the package, and the second package data related to acceptable package conditions. A labeler coupled to the controller is configured to apply a first label to the package if the first and second package data indicate that the package is in an acceptable condition or a second label if the first and second package data indicate that the package is in a condition requiring further processing.