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Top 5 pitfalls of a consumer product recall

With increasing regulatory scrutiny on consumer product recalls, it’s more important than ever to manage events properly. Implications from a consumer product recall can affect a company up to a decade after the event, especially when regulatory compliance issues occur. Trends from Consumer Product Safety Commission (CPSC) records provide insight into the biggest pitfalls manufacturers face during a recall and can help companies learn from other’s mistakes.

1. Legal issues – Know the regulations

To minimize brand damage, its vital manufacturers understand all reporting and compliance requirements put forth by the CPSC. The agency lists specific timelines for reporting potential product defects, and fines companies for failing to report in a timely manner. Fines trended upward in past years, with the agency issuing its largest fine in 2014 for $4.3 million. In the past year, the agency also coupled fines with a requirement that companies participate in compliance programs to prevent reoccurring issues. During a product recall, there are additional notification, reporting and other compliance requirements manufacturers need to prepare for. Companies should fully understand reporting requirements or engage the help of an expert in product liability or product recalls to minimize risk.

2. PR issues - Know how to respond

For brands that spend years building their reputation, one big public relations misstep can cause irreversible brand damage. However, if managed properly from a public relations and execution standpoint, companies can use the opportunity to build brand loyalty. Have a communications plan in place for recall scenarios, identify a spokesperson and ensure they receive proper media training prior to any event. For effective notification, consider the audience affected and target communications to the appropriate channels for that demographic, whether it’s social media, television, store notices or mailers. Many public relations firms specialize in crisis management and can help prepare or guide brands through an event with specialized expertise.

3. Infrastructure issues – Know your capacity

Most companies build their infrastructure around day-to-day business activities, not for times of brand crisis. It’s no surprise that some companies struggle to manage the influx of calls, emails and website visits that occur during a recall. Before attempting to manage this in-house, it’s important to understand the contact center and website capacity. How long will customers wait to talk to an agent? Are there ways to streamline the process? Can the website handle the influx of traffic?

4. Consignee issues – Know how to retrieve

During a product recall, manufacturers must notify all affected parties throughout the supply chain. This could be your direct ship to list of distributors and retailers or consumers that purchased product online or are in your warranty database. To keep affected products out of the marketplace, give consignees actionable notifications, including what product is affected, the remedy and how they should respond. Quantify how much affected product is in stock and quarantine it from saleable product until it’s ready for disposition. Do not ship affected product from the same location where usable products are distributed as this creates cross-contamination and can render more products unusable. Because the list of affected consignees is often vast and geographically diverse, retrieving product becomes very complex without a ready-to-act global field force. Companies need to understand the supply chain and be able to make quick decisions regarding product retrieval, especially if it is a lot specific recall that is currently on the shelf or sold online.

5. Disposition issues - Know how to dispose

Considering all components of the affected product, determine the most cost efficient and effective method of disposal, whether recycling, incineration, landfill or shredding. As products return, keep accurate records on response rates and report monthly to the CPSC, or more often if required. Before any destruction, notify the CPSC of the disposal plan and date for destruction. To ensure regulatory compliance, notify the agency to give them the opportunity to witness the disposal. Understanding the compliance process for disposal of product is essential to meeting the requirements of CPSC, but there are also EPA and DOT regulations on the disposal and shipment of the recalled product to consider.

With any product recall, there are multiple needs and requirements from launch to disposal, including product safety attorney support, public relations, web site/contact center, product retrieval, returns management and product disposal. Experts can assist and streamline these problems to protect the brand and ensure compliance.

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