Product Recall: A Nightmare On Your Street
Jason Vorhees. Freddy Krueger. Michael Myers. Three classic horror movie villains that can send shivers down the spine with the mere mention of their names. But nothing strikes fear in the heart of product managers everywhere more than one thing: Recall.
A product recall is a nightmare no business wants to go through. They are scary because there's uncertainty surrounding the situation, particularly for the unsuspecting and uninitiated. Uncertainty with the depth of the issue, uncertainty with how the problem will be corrected and uncertainty with the lingering after-effects once the initial crisis is over.
Recalls are also scary because of the financial implications. They are expensive on many fronts: product return and/or replacement, consumer compensation and legal fees—not to mention loss of consumer trust that can impact sales for years to come.
Like a horror movie, a recall is often a case of the known evil versus the unknown evil—the less you know about it, the more frightening the thought may be. But once you know who—or what—is behind the mask, you can take control of the situation and dispel the fear.
So who drives the Recall Nightmare Express? Recalls are generally instituted by federal agencies—such as the U.S. Food and Drug Administration (FDA), National Highway Traffic Safety Administration (NHTSA) and the Consumer Product Safety Commission (CPSC)—which were created to protect end-user consumers. And contrary to urban legend, recalls are seldom the complete removal of a product from the market—and they are almost never a surprise.
Recalls are typically broken down into levels, based on severity of threat. For the FDA, Class I involves life-threatening situations of harm. Class II is a potentially threatening harm, but one that won't kill you. And Class III is a non-serious hazard. Both NHTSA and the CPSC follow similar models, although the CPSC escalates evaluation of a product risk to which a child is exposed, particularly for young children who don't have the cognitive skills to differentiate between "safe" and "not safe."
Keep in mind that in many cases the situation need not escalate to where the governmental agencies issue the recall. Manufacturers and importers are obligated to report product hazards to the applicable regulatory agencies, as Lisa Lori pointed out in "The Price of Silence," published in Promo Marketing's Responsibility Issue. Part of this reporting includes what the company has done to investigate the nature of the issue, how the issue presents itself and solutions that may eliminate the harm resulting from the use of the product. Other factors such as the volume of the item produced and the portion already in end-user's hands should also be included in the report.
Being proactive and having an established policy and procedure for addressing recalls provides a script for companies to follow when faced with claims related to product harm. This recall policy should have the capacity to address the issue and implement the applicable remedy, which could be something as mundane as issuing instructions, adding a warning label or sending out a replacement part. In only the most serious and severe cases, would a recall include pulling the product back from your distributor customers as well as the consumer market.
Conducting a mock recall to test those procedures makes certain everyone knows their roles—and keeps stage fright to a minimum. Regular rehearsals not only ensure that a potential recall will be confidently handled like any other matter of business, but they also help keep procedures up-to-date as processes are revised to meet current marketplace standards.
In any case, a recall represents an opportunity to learn more about your product, your management systems and where you may want—or need—to make improvements. And although scary and sometimes painful, it is possible to survive a recall relatively unscathed.
Stay tuned for the next Compliance Chat on November 2 to learn how your brand reputation plays a significant role in recall survival.
D E Fenton is executive director - compliance for Quality Certification Alliance, the promotional product industry's only independent, nonprofit organization dedicated to helping companies provide safe products. With more than 20 years of compliance experience, she offers practical advice and actionable tips that help make the complex concept of compliance easier to understand so companies can implement compliance into their daily business practices. She can be reached at firstname.lastname@example.org or visit www.qcalliance.org for more information.