Could Your Promotional Products Business Withstand a Recall?
Just for a moment, try to imagine that a promotional product you sold to your largest customer has suddenly become the subject of a government recall. Hundreds or even thousands of consumers have to be notified immediately that it may be dangerous to use the item that was given to them as a gift. And to be sure there's no confusion, pictures have to be posted in multiple locations and on the Internet showing the ill-fated product with your customer's logo displayed next to the danger warnings. The product you chose is now a public albatross for everyone involved. The recall and legal costs are almost certainly going to be enormous, as is the liability exposure. And to top it off, the incident is a colossal embarrassment for you and for your client.
Try to imagine the pain of what that would feel like, especially if you could have avoided it all—including the potential loss of a prized customer—with just an ounce of prevention?
Recalls happen for a variety of reasons but most of them revolve around the risk of injury to consumers. Government regulations are established to ensure safe products so violation of any regulation can trigger a recall. If your promotion includes a food product that isn't properly labeled with allergens the FDA can mandate a recall. CPSC can do the same for products that contain more lead than allowed by CPSIA or toys that fail to pass the toy safety standard.
Recalls come about in a lot of different ways. It could start with something as simple as a call from your client that someone reported an injury or that the product shattered when it fell on the floor. Sometimes a consumer advocacy group will test a product and report to CPSC that it contains excessive lead, phthalates or fails some other mandatory test.
For consumer products, the law requires immediate notification of the Consumer Products Safety Commission (CPSC) when a company obtains information that supports a conclusion that a product distributed in commerce fails to meet a product standard or contains a defect that can create a substantial risk or injury to consumers. If CPSC staff concludes that a recall is warranted, they will usually suggest a "voluntary recall" although the Commission has the right to enforce a mandatory recall. FDA has similar procedures for the products it regulates. Promotional products that fall within FDA oversight include hand sanitizer, sunglasses, first aid kits as well as food and food contact items.
As painful as a recall can be, failure to report can be even worse. Sometimes companies will find out about an injury or that a product it distributed has failed a test, and will try to handle it on its own, without involving the governmental agency, perhaps by notifying customers to return the item. CPSC is particularly unforgiving in these instances no matter how sincere or thorough a company may be in its attempt to self-resolve the issue. Public Citizen, a watchdog group, reports that between 2002 and 2007 CPSC fined companies an average of $452,000 for filing late reports or withholding key details from the agency such as information about customer complaints. In more recent cases the agency has become even more aggressive with some fines in excess of $1 million.
So what about that ounce of prevention? What are some things you can do to prevent a product safety nightmare? The answers may seem obvious or common sense but you'd be surprised how easy they can be to overlook when you're stressed or rushing to complete a last minute promotion.
- Slow down. Take the time to understand the promotion and how the client is going to use the product. Who is the intended audience? Are children involved? How old are the children?
- How well do you know the supplier and the supplier's products? What do you know about the supplier's processes to ensure safe and compliant products? What tests are conducted, by whom and how often?
- Did you obtain an actual sample of the product? How well is it constructed? Does it have any sharp edges? Could the material shatter? Can you foresee any safety issues?
- Is the product a potential choke hazard for children? If so, does it have proper warnings?
- Is the product an electric product? If so, does it have an independent lab safety rating, such as by Underwriters Laboratory?
- Have you researched whether there any state or Federal regulations that apply to the product or its packaging? If so, have you received current test reports from the supplier and had a qualified person confirm that the test reports are thorough and that the product meets all required standards? (PPAI has a very good tool on its website called Turbo Test which can help identify any applicable regulations.)
- Does your client have any testing requirements that go beyond the state and Federal requirements? Some companies require a product to pass children's product or toy standards even if they aren't children's products.
Most of us have owned a product that was involved in a recall sometime during our lives. Maybe it was a car or a coffee pot, a battery or a crib. Mistakes happen even to the most sterling and trustworthy brands. Search "product recall" on Google and your hits will include Mercedes Benz, BMW, GE, Apple Computer and Fisher Price. But while you can't guarantee immunity from every problem, if you're a savvy shopper, learn the risk factors and always do your homework, you'll exponentially reduce the risk of a product safety fiasco.