How Your Business Can Manage a Recall

With the amount of time and money businesses put into making the best possible product, it can be upsetting when it does not turn out the way it was intended. If your customers have the potential to become injured from a faulty product, it is crucial to put a recall in place, and the management and oversight of this recall is just as important.  Learn how the process works and implement best practices for an effective recall.

Prepare and Report

Most publicly announced recalls tend to go through the Consumer Product Safety Commission (CPSC), which regulates and even mandates recalls if a company does not take action on its own. However, most recalls are voluntary. If a company determines that their product fails to comply with safety standards or creates unreasonable risk of serious injury or death, the CPSC requires that it be reported within 24 hours. Avoid any delays as this can expose the company to a substantial civil penalty.

Businesses are required to report potential defects and safety hazards even if they do not believe the situation warrants a recall. The CPSC stresses that it is their job to ultimately decide if a recall is warranted, and they cannot make that determination if they are not made aware of the situation.

Voluntary recalls can be “fast tracked” if the company agrees to conduct a recall up front; and is prepared to implement a recall plan within 20 working days. You will need to submit a full report to CPSC of the alleged defect or hazard, including:

  • Manufacturer information and product descriptions
  • Units involved and where they might be located
  • Product recovery/remedy plans
  • Any communications to retailers and consumers about the problem
  • A Corrective Action Plan describing the company’s proposed remedial action

Effective Communication

It is very important to maintain consumer trust through a recall process by remaining transparent, consistent, and responsive. Transparency involves quick and candid responses. When you handle the recall with swift action, ready to offer solutions and a carefully crafted recall message, the chances of maintaining, and possibly even exceeding past perceptions, are great.

Companies must first communicate to consumers that a recall is happening. Managing recall communications is similar to managing marketing campaigns. Existing communications platforms can be used to publicly acknowledge the recall, apologize, and reinforce their commitments to consumer safety. Social media postings or other notices in marketing materials helps get the word out.

Be Responsive

Acknowledge and act on consumer concerns to show responsiveness. Consider designating a recall team with a chain of command similar to that of a marketing team, except its end goal is to retrieve a product as opposed to distributing it. It is better to do this prior to a recall issue, but companies should put one in place for a recall even if they did not previously have one.

The first strategy should be to evaluate the situation and determine the speed, scale, and type of recall. The process should consist of regular progress checks and checking in with consumers. Meet consumers where they are to be better positioned for a more effective recall process.

About The Rubin Group

Based in New York, The Rubin Group provides insurance in most of the 50 states. Our full-service insurance brokerage provides insurance and risk management services to individuals in all income brackets and businesses of all sizes and types. We understand that every client has unique coverage requirements, and we are passionate about providing the ideal individualized coverage for each customer. Each member of our team takes the time to truly understand your situation, the particular risks you anticipate – and the very real risks you’ve not yet contemplated. For all of your insurance needs, contact us at The Rubin Group at (877) 806-7239!