Making plarn is easy.
1. First you fold the bag lengthwise a few times.
2. Then you cut off the handles and bottom of the bag.
3. Next you cut it into strips horizontally. Depending on what you plan on making you are going to want to cut the strips to different widths. One inch strips are about equal to 4 ply yarn and work well with F, G, and H size crochet hooks. If you spin 1″ strips you can achieve a gauge about equal to size 10 crochet thread. For projects you want to be more durable or stiff cut your bags into 1-1/2″ strips. This will give you about 8 strips per bag and is comparable to chunky yarn so size H, I, or J hooks work well.
4. Once you have cut your strips you should have a pile of loops. Connect these loops as you would a rubber band chain.