The responsibilities of retailers for safety and health issues that arise in the supply chain became a recurring topic of discussion at the 20th annual International Consumer Product Health and Safety Organization (ICPHSO) meeting and training symposium held on February 26-March 1, 2013, just outside Washington, D.C. Representatives from the U.S. Consumer Product Safety Commission (CPSC or Commission), consumer product retailers, and others spoke about retailers’ past and future involvement with the Commission’s efforts to protect consumers from unsafe products.
In recent years, retailers have become involved in an increasing number of recalls of products for which they are not the manufacturer. The Commission typically prefers to work with manufacturers – as compared to retailers or others in the supply chain – to implement recalls for several reasons: (1) manufacturers usually have a superior knowledge about the product and supply chain; (2) they are usually in the best position to offer an appropriate remedy or fix; and (3) it is more efficient to deal with one manufacturer as opposed to multiple retailers. Retailers, however, have become useful allies of the Commission, and the CPSC does not hesitate to approach retailers when necessary. CPSC Commissioner Robert Adler explained that the Commission usually contacts retailers about recalls when a manufacturer has gone out of business or has chosen not to cooperate with the CPSC. Staff spoke about retailers’ unique ability to apply pressure to noncompliant manufacturers as well as to get word out to consumers about unsafe products. CPSC Chairman Inez Tenenbaum thanked retailers for their continued cooperation in conducting voluntary recalls during her keynote address at the annual meeting.
Retailers, manufacturers, and distributors each have an independent duty to report certain product safety issues to the CPSC pursuant to Section 15(b) of the Consumer Product Safety Act (CPSA) and each may be subject to civil and criminal penalties for failing to timely report. A retailer may not have a duty to report where it has actual knowledge that the CPSC is already aware of a possible health or safety risk associated with a consumer product, such as when a report has already been submitted by a manufacturer, though the Commission may still request that a retailer submit a Section 15(b) report. Panelists during a session on best reporting practices along the supply chain stated that some retailers may actually be better positioned than manufacturers to report safety issues to the CPSC because retailers are often able to detect incident trends through call centers, online databases, and product returns.
One interesting discussion involved a recent request of retailers to assist in a Commission educational campaign regarding the ingestion hazards associated with single-load liquid laundry detergent packets by making warning posters available at several conspicuous locations in a retail store. Commission staff acknowledged that it could not move forward with a ban on the single-load detergent packets but remain concerned about the pediatric ingestion risk. Staff asked retailers to “do the right thing” and make the warning posters available at the point of purchase for the next twelve months. Imagine, though, if every warning on product packaging, or even the most important of those warnings, were suddenly to become posters on or near store shelves. How would it look in a future case if a retailer refuses to follow the federal government’s “request”?
Speakers also discussed the role that retailers may play in improving recall effectiveness. Many retailers have implemented mechanisms – such as customer loyalty programs or discount cards – that track consumer purchases and are often used for marketing purposes. Those retailers may be under increased pressure to use that consumer purchasing and contact information to send targeted alerts to particular consumers about product recalls. CPSC staff stated that they are looking for firms to use more creative methods to communicate with consumers about corrective actions.
This post was authored by Crowell & Moring partner Cheryl Falvey, partner Bridget Calhoun, and counsel Natalia Medley. Ms. Falvey, Ms. Calhoun and Ms. Medley practice in Crowell & Moring’s D.C. office.