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How to Handle Product Recalls in Your Online Business

by Chris Malta
Last updated 7/24/2018

If you're like most online retailers, you've never experienced a product recall in your online business, and you're hoping you never will. But one of your product offerings could be recalled at any time and you need to be prepared to properly handle such an event. Affirms Dennis Blasius, of the Consumer Product Safety Commission (CPSC), "The retailer plays a critical role in these recalls and we can't do it without their cooperation."

Safety Awareness
Your first job is to be aware of safety hazards in the products you offer. If your customers are injured using your merchandise and/or even if you just have concerns about the safety of an item it's your legal responsibility to report that to the CPSC. You can do this at their website, CPSC.gov.

By regularly checking this website, you can monitor products that are being recalled due to safety risks.

The Game Plan
If you find that a product you sell, or sold previously, has been recalled, you need to immediately take steps to protect your consumers (as well as your business):

    -Stop the sale of the product. Online, this is as simple as pulling the product from your website, online store, or auctions.

    -Contact the recall coordinator (the firm conducting the recall) for instructions on what to do next. You can check the CPSC's website to find the coordinator's contact info and usually it will be included (along with a toll free number) in the specific press release that applies to your recall. Typically, you'll be asked to identify the number of products you've received, the number you've distributed to consumers, and the number you have left in inventory.

    -Contact your customers and inform them of the situation. (Email usage is encouraged, to notify end users as quickly as possible.) As an online retailer, determining which customers purchased the recalled item from you should not be difficult. By the nature of the transaction, you've collected far more info than a physical retailer. The recall coordinator will often provide a specific letter with wording that describes the problem and gives consumers directions for returning it.
In some cases, you'll be responsible for receiving your customer returns and passing them onto the manufacturer. In other instances, you may simply provide your customers with information on how to return the product to the manufacturer directly. It's most often up to the vendor and the retailer to work out the scenario that will be most convenient for consumers and will result in the greatest response.

It's very common for the responsible firm to refund retailers for the recalled products, especially for goods they still have in stock or have accepted as customer returns. Such reimbursement is not required by law, however, so this is a point that you'll have to work out with the recall coordinator. Remember that it's in a supplier's best interest to take care of their retailers, and most will work with you to find a solution that satisfies both parties. The most important thing is to work together, to resolve the problem in a way that's best for the public, and move on.

Everyone's Job
While the CPSC is the primary agent at work for consumer product safety, their resources are finite. They aren't able to be everywhere all the time, so they depend on every link in the distribution chain to help them keep unsafe products out of consumers' hands. States Blasius, "We rely on individual retailers to both keep their eyes open for emerging product hazards and to cooperate in getting risky products off the market. Doing so is mandated by federal law, and quite simply, it's the right thing to do."