Retailers Taking Control of Recalls
03-03-2010
By Brian Giannini
Retail chains are becoming more aggressive in their approach to handling recalls from their stores. As their retailers become more active in the recall process, manufacturers need to have a better understanding of exactly how retailers will operate and communicate when they have to execute a recall.
A typical grocery retail chain handles between 75 and 100 recalls every year. They typically have recall plans in place to manage all that recall activity. For the big chains, the “Retail Recall Coordinator” has become a full-time job at corporate headquarters. More and more retailers are taking advantage of new technology and third-party audits in order to reduce their risk and better manage the recalls they face.
For starters, big chain retailers are locking out the UPCs of recalled products from their registers so the products cannot be scanned at the checkout line. This precautionary measure ensures that consumers will not be able to buy any recalled products that may still be on the store shelves. As a result, manufacturers are under increasing pressure to make sure that shelves are cleared and replacement product delivered in a timely manner in order to minimize lost sales and valuable shelf space.
Over the last few years, a number of massive recalls have sparked a second trend in retailer recall management. Rather than take the risk of selling a recalled product, retailers remove all products from the manufacturer regardless of production codes. As a result, manufacturers and producers lose their entire retail supply in each store, along with the sales revenue they would have received from sales of all the unaffected product. Manufacturers must understand that their Recall Notification to Corporate Retail may be revised by the retailer to instruct store managers to remove all units regardless of production codes.
A third precautionary measure being implemented by more and more retailers is the hiring of third-party auditors to make sure recalled products have been removed from shelves and the back room. Documentation of the retail visits and the number of units inspected, removed and destroyed gives the retailer third-party documentation that every store location has been inspected and no recalled product remains. This information can be shared with the recalling firm to help them close out the recall faster and reduce the liability to the retailer.
Finally, retailers are taking consumer notification into their own hands. For example, big retailers now often use point-of-purchase data gathered by their loyalty card programs to identify individual consumers who may have bought a recalled product and inform them of the recall using Integrated Voice Response (IVR). To further protect consumers, recall announcements are also being posted on retailer websites and shelf tags are posted at the point of purchase.
Manufacturers can increasingly count on retailers to communicate with their customers. But they should be careful to make sure that the retailer is delivering the right message. Manufacturers are still on the hook for striking the right balance between making sure a recall is effective and minimizing unnecessary lost revenue.
An important part of recall preparedness is understanding the recall plans and procedures for every member of your supply chain, including retailers. Right from the start of a recall, manufacturers need to know exactly what their retailers are doing to communicate and protect consumers – and whether those steps are likely to help or hurt the company.
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.
[...] that received recalled products. Those businesses would then be required to post clear notices alerting customers to the recall. Again, the bill provides for a penalty for non-compliance. Any facility that fails to notify [...]