Recalls, Recalls Everywhere

07-27-2010

By Dave Schmeltzer

A feature article on the front page of a recent edition of The Washington Post pointed out that while there are more and more recalls being announced, consumers appear to be paying less and less attention to them. The problem? A phenomenon now referred to as “recall fatigue.”

The Consumer Product Safety Commission (CPSC), a small but very important federal agency, regulates some 15,000 consumer products used in and around the home and is involved with approximately 500 recalls a year. The agency spends a lot of time and energy uncovering defective or non-compliant products that shouldn’t be sold or used by consumers. These recalls help to reduce the risk to the life and health of consumers including, but not limited to, vulnerable children and senior citizens. But if the public doesn’t pay attention to the risks of recalled products, then what’s the point of a recall in the first place?

The CPSC is currently struggling to administer new provisions of the Consumer Product Safety Improvement Act signed into law on August 14, 2008. The agency has had its budget and staff increased, but the requirements of the new law are numerous and difficult to administer. The Commission and the industries that are required to meet these new regulations will eventually learn how to import and sell products that are in compliance with the standards and regulations set forth.

The more difficult problem is avoiding the manufacture, distribution and sale of products that are unregulated by the CPSC but are defective and pose a hazard to consumers. When any product is recalled and very few people pay attention, or are not even informed of the risk, fewer defective products are removed from commerce and homes leaving both consumers and the manufacturer vulnerable. Put yourself in the shoes of a mother whose child has been seriously injured or even killed because of a recalled product that she either ignored or of which she was unaware.

The agency, its critics, and Congressional oversight committees are struggling with ways to deal with “recall fatigue”. Recalls that don’t properly emphasize the potential risk posed to consumers are likely to be ignored. However, recalls that pose a severe risk to consumers, make it easy to obtain a remedy, and are communicated through the proper recall communication channels where consumers would be looking to help ensure that the violative product is removed from homes.

Some of the best ways for a recalling company to reach consumers is by e-mail, direct mail or telephone. Research shows that consumers are more likely to respond to a recall if notified directly. It is hard to understand why retailers are unable to contact consumers directly in this high-tech world. As the Washington Post article points out, Costco utilizes its members’club card information to contact customers directly by phone and follow up with a letter. In some cases, this results in 90 percent of Costco’s customers returning the recalled product to its stores. Even if a retailer does not employ a club card, shouldn’t they be able to reach consumers who purchased the recalled product through the use of credit card information? I believe they use this information for marketing purposes so why not use it to prevent injuries?

An ineffective recall can negatively impact the recalling company’s reputation and brand. Moreover, there are product liability implications if the recalling company does not conduct an effective recall, particularly when a user never knew of the recall and was ultimately injured by the product. Plaintiffs’ attorneys will use an inadequate recall as a basis for their argument for punitive damages, resulting in a larger award for the defendant or increased settlement amount.

Moving forward, we can expect the agency to monitor recall effectiveness more closely. And when the risk is high and the return rate is low, the agency will likely require you to issue an additional notice. It is important to think now about your recall communications and recall plan to ensure that your recall is done right the first time.

Stericycle ExpertRECALL™ is the industry leader in recall logistics and regulatory compliance for consumer product, pharmaceutical, medical device, juvenile product, and food and beverage recalls. ExpertRECALL’s professionals are experts in recall management who can help you streamline the entire product recall process.