What to Do if Your Business’s Product Has Been Recalled

Normally companies see a recalled product as the end for their business, but smart brands should see it as an opportunity. Through it may be difficult at first to figure out attentive PR strategies and damage control, you may be able to build positive relationships with unsatisfied customers and build customer loyalty.

Consumers are more likely purchase from and remain loyal to a brand that handles a product recall honorably and responsibly. A recall just might be a great chance to strengthen customer engagement if you take advantage of certain strategies.  

Offer Refunds

A serious mistake some companies make when they discover a product defect is only focusing on profit. Sometimes you have to take a revenue hit to keep loyal customers. Offer to take care of any costs caused by the recall so your customers don’t become permanently unimpressed by your brand. Offering full refunds whenever possible will help save your brand image.

Maintain Open Communication

Customers will likely be confused and feel  inconvenienced by the sudden shift from the recall.

These are some recommendations to help ease frustrated customers:

  • Hire more customer service professionals.
  • Install a live chat help feature on your website.
  • Hold an informative press conference about the change.

Customers that don’t receive the answers they seek will still hold a negative opinion long after the recall is taken care of. In addition, keep in mind it is your duty to educate customers about any potential hazards.

Be Prepared, and Assume Every Product Will Be Recalled

It may be strange to think you should assume a recall will occur on every new product your business puts on the market, but effective PR is based on messaging, framing the situation and managing the reaction of consumers in the face of uncertainty.

If a product gets recalled, react quickly with an announcement. You will want to be the first to speak on the matter to help control the message. Take responsibility before the press and the public starts to paint a bad picture of your business.

Cooperate With Regulators

When a recall involves potential dangers to the health of your customers, government agencies normally get involved to make sure the responsible company responds appropriately. If you must deal with a government agency or a third party mediator to make sure the proper steps are taken, it’s important you realize that your company is in the wrong here. Cooperate with them so the process will go smoothly.

Have the Right Insurance

Product recalls are not covered in most general business insurance policies. Instead of leaving the fate of your business up to chance, make sure that you have Product Liability/Product Recall coverage in order to ensure that your business won’t be ruined by litigation, settlements, replacing the product in question, and the resulting loss of profits and damage to your business’s reputation.

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!