3 Steps to Develop an Effective Recall Management Strategy

3 Steps to Develop an Effective Recall Management StrategyA product recall is a significant threat to the well-being of manufacturers, importers, distributors, and retailers of consumer products. If not handled properly, a product recall can not only harm the reputation of a business, but in some cases, it can destroy the company itself. So, why aren’t more companies prepared to deal with a product recall?

By developing an effective recall management strategy, a business can successfully navigate its way through the steps of a product recall, and help save lives and prevent injuries to consumers. This product recall guide is designed to assist your company in developing a plan to remove unsafe consumer products from the marketplace.

Designating a Recall Coordinator

An important first step in establishing a recall plan for your business is to select a company official/employee to be the “recall coordinator.” This person should have authority to take the necessary steps to initiate and implement all recalls, with the approval and support of the company’s CEO. This includes reporting to the Consumer Product Safety Commission (CPSC).

The key responsibilities of the recall coordinator are outlined as follows:

  • Knowledge of the statutory authority and recall procedures of the CPSC.
  • Ability and authority to function as the central coordinator within the company for receiving and processing all information regarding the safety of the company’s products (quality control reports, warranty returns or claims, lawsuits, and insurance claims).
  • Responsibility for keeping the company’s CEO informed about reporting requirements and all safety problems or potential problems that could lead to a product recall.
  • Responsibility for making decisions about initiating product recalls.
  • Authority to involve appropriate departments and offices of the company in implementing a product recall.
  • Responsibility for serving as the company’s primary liaison with the CPSC.

Identifying Affected Products

The recall coordinator should review the company’s product line to verify that all products conform with regulations. Extensive research should be conducted to determine how each product will perform under conditions of proper use and reasonable foreseeable misuse or abuse.

A product identification system should be used, if one is not already. Model designations and date of manufacture codes should be used on all products, regardless of whether they carry the company’s name or are privately labeled. That way, in the event that a product recall does occur, the company will be able to easily identify all of the affected products. This practice also helps distributors, retailers, and consumers identify products subject to a recall from the corrected items by their new identification codes.

Records Maintenance

Maintaining accurate records about the design, production, distribution, and marketing of products for its expected duration, and maintaining any records required by regulation or standard is essential for a company to conduct an effective, economical product recall. The following records are important to identifying non-complying products and conducting and monitoring recalls:

  1. Records of complaints, warranty returns, insurance claims, and lawsuits highlight or provide early notice of safety problems that may become widespread in the future.
  2. Production records can help the company identify non-compliant products of components quickly (lot numbers and product codes associated with each run, the volume of units manufactured, component parts or substitutes used, etc.)
  3. Distribution records should be maintained noting the location of each product by product line, production run, quantity shipped or sold, dates of delivery, and destinations.
  4. Quality control records can help the company identify possible flaws in the design or production of the product, and can aid in charting and sometimes limiting the scope of a corrective action plan.
  5. Product registration cards that are completed by the consumer and returned to the manufacturer can help identify owners of recalled products. These cards should be easy to fill out so there is a greater likelihood of return.
  6. Membership, bonus, and loyalty cards can be useful in identifying purchasers of recalled products. Availability and storage of these customer records should be used in the event of a recall.
  7. Credit card and Internet purchase records can be an easy way to identify and directly notify owners of a recalled product.

With millions of products being recalled over the years, consumers believe they enjoy safer, better products as a result of a company’s willingness to conduct a product recall when necessary. A successful product recall plan can reward a company by gaining the continued support of consumers and creating an increasing demand for more products by that company. Companies need to stand behind the products they produce and sell, and when a recall occurs, they must effectively manage and communicate that information to the public.

For more information on developing a product recall plan or for information on product recall insurance, contact McGrath Insurance Group at 508-347-6850 or marketing@mcgrathinsurance.com.

*This article is written for informational purposes only and should not be construed as providing legal advice.