I’ll bet most of you think you’ll never need to worry about a recall. Ten bucks says 95% of you won’t even read this but I can only hope I will never have to say “I told you so”. Hopefully most of you will never need to worry about it but it’s best to be prepared. This entry applies to anyone who makes or sells products in California and children’s product producers nationwide.
Here’s the context (if you’re not making kid’s products, don’t leave yet). This morning I was visiting a children’s retail site and noticed coats with drawstrings for sale. Shocking, no? If you don’t know why ties and drawstrings are a huge problem, catch up now. Since I am friendly with the proprietor, I asked her about it and mentioned the problem. She was horrified to say the least and immediately pulled those items from stock. I was surprised she didn’t know so I asked her if the manufacturer had advised her. At first she said no but then after poking around a bit, she found an email advising her of the problem. She also said the email did not emphasize the liability, that these products were illegal.
Another scenario affecting recalls that I’ve been highly reluctant to discuss that affects everyone who sells products in California, is Proposition 65. Prop 65 is like CPSIA on steroids and affects all consumer products, not just kid’s stuff. Since I’m still in denial and pretending it’s not happening, I’ll summarize it by saying that Prop 65 allows anyone, yes anyone, to sue you for allegedly “dangerous” products -but there’s no legislation; liability is determined through litigation. But wait, there’s more! The party who sues you is entitled to proceeds of the damages (25%) so there is a financial incentive for parties to file suit as a fund raising activity. For example, the Center for Environmental Health (the kind of activist group most of us would normally support) has filed suit against 50 or so retailers and manufacturers, everybody from Sears to Victoria’s Secret. In short, if you are in a position to become fund raising fodder for a group who can lobby an attorney to take the case on contingency, you also need to worry about the potential of a recall.
So, the question becomes, if you’re a manufacturer, what lengths do you go to withdraw a product from the marketplace? In first scenario I outlined above, an email is ineffective because the retailer didn’t notice it. Does an email get you off the hook? No, it doesn’t. You are completely liable. The law requires these coats to have been recalled. What was appropriate was a voluntary recall meaning the manufacturer notifies the CPSC that they have non-compliant products in consumer’s hands. A voluntary recall is much much better than a recall where they go after you. And drawstring recalls are at an all time high, even tiny lots of 50 pieces. I can’t advise you to skip the recall if you’re really small and have the means to definitively reclaim every single non-conforming item because doing so is illegal.
Previously I’d written here and here how retailers can get their suppliers to provide the documentation needed to legally sell children’s products but the situation is different in this case because it’s a matter of getting your buyers to comply to limit your and their liability. It is difficult to stress its importance and retain brand value, you don’t want to damage your reputation and future sales. I know several of our members have had to weather recalls, it’s not fun and it’s expensive.
In summary, the potential of a recall is yet another worry for you. The best way to limit liability and aid in the removal of defective items from the marketplace is through stringent tracking systems. You must keep accurate records. Know who bought what and how many of them for at least three years. Do most of you keep these kinds of records? If not, you should start. Here’s the bulleted list: