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I've found that a quick wash with water and regular hand soap also works to get the bitter coating off the Duracell CR2032 from Costco for the AirTag—if you don't have isopropyl alcohol handy. Obviously dry the battery before sticking it in the AirTag.
 
If you try to replace your AirTag battery with one of Duracell’s premium coated “Child Secure” 2032 batteries, good luck. Because I couldn’t get them to work
Clean the batteries with an alcohol swab. I have had success by cleaning the cells. To convince yourself the bitterant agent is gone touch the battery to your tongue.
 
Also, Duracell changed the placement of the bitterant. As you can see in the picture the bitterant ring is now located on the positive side instead of the negative, so there’s no need to jump through hoops to remove it or avoid it. All of my AirTags came with Duracell batteries with this updated placement and I’ve also verified the placement on batteries with the “compatible with AirTag” label on the retail packaging.
 

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This bitter coating prevents electrical conduction.
millions of electronic devices use these batteries. They last for 10 years and prevent user settings and licenses from being lost.

when you put this battery in the vertical battery slot, the contacts are very tight and the coating gets on this contact point.
and then other batteries you put in won't work either. big trouble. very hard to clean.

prefer uncoated batteries in these types of devices.
 
I have plenty of the non-updated Duracell 2032s left over from a Costco pack. Recently replaced a battery and ran into the problem.
70% isopropyl alcohol worked fine. No need to buy new batteries.
 
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