Poorly managed recalls can devastate a company’s reputation and revenues
The U.S. is on pace to set an all-time record for the number of items recalled in a single year, with more than one billion products having already been recalled in the first seven months of the year. This news has a lot of companies, no matter what their industry, on guard. When a product is recalled, a company’s reputation can be damaged by the existence of faulty merchandise making its way into the grey and black market distribution channels. Businesses can protect their brand by using eLoop’s certified and secure recall management and disposal services.
The illegal resale of recalled goods can be devastating to a company’s reputation. It is also, sadly, all too common a practice. In August, 2022, TJX, the owner of T.J. Maxx, Marshalls, and HomeGoods, agreed to pay a $13 million penalty for selling previously recalled products, according to the Consumer Product Safety Commission (CPSC). The agreement settles charges that TJX knowingly sold, offered for sale, and distributed approximately 1,200 recalled products through its stores, including T.J. Maxx, Marshalls, HomeGoods, and online. The consumers who purchased the recalled products from TJX stores were often unaware that the product they bought were defective and potentially dangerous. When the defect became apparent, they were likely to blame the brand name behind the product, rather than the retail store it was purchased from.
The effective management of recalled products is of vital importance to any company. Despite the existence of laws and strict penalties prohibiting the sale of recalled products, the practice continues. And ultimately, it is the reputation of the name-brand company that pays the highest price for the continued sale of recalled products.
Choosing the right product recall management team is vital. eLoop is currently working with a well-known international manufacturer of medical devices to catalog and certify the collection, documentation, safe storage and destruction of a popular home monitoring device that has been recalled due to potential safety concerns. Throughout the process—from pickup to disassembling—eLoop provides a secure and transparent chain of custody for the recalled materials and provides detailed audit documentation for compliance legislation and brand integrity. Once completed, a certificate of destruction will be provided to indemnify the company and all materials will be recycled and kept out of our landfills.
Proactively planning for a secure recall management system is even more important now, as it is expected that consumer product safety will face increased scrutiny in the near future. According to The National Law Review, the consumer product industry can expect more aggressive enforcement from the Consumer Product Safety Commission (CPSC), including higher civil penalties, increased use of criminal penalties, and the implementation of additional injunctive measures. Following historic lows in enforcement in recent years, civil penalties for consumer product safety returned in 2021 as part of the CPSC’s self-proclaimed “reinvention.” The agency’s leadership has expressed a commitment to support higher civil penalties, criminal penalties, and the potential use of additional injunctive measures in the future.
When a product’s safety comes into question, it is important to work with an experienced recall management company like eLoop. Product recalls can be complex and have serious consequences if not managed correctly. The retrieval, documentation, storage and disposal of recalled products is a complex undertakings that requires secure and certified management to minimize risk and protect a company’s brand and reputation.
To speak with an eLoop team member, call (724) 519-7646 or go here.
