Surviving a product recall

BedTimes Feb 2012 coverWhen mattresses need to be pulled from consumers’ homes and repaired or destroyed because of safety concerns, the process is called a “recall.” But for the companies involved, it’s an experience they would rather forget.

A product recall can be an expensive, labor-intensive process, consuming staff and management time as companies scramble to determine exactly what products are affected, where they’ve been shipped and how to contact all the consumers who are using them. The process requires an “all-hands-on-deck” approach so that every stakeholder—anyone involved with producing, selling or using the product—is informed about the defect and the company’s plan to remedy the situation.

In addition, the process of conducting a product recall exposes a company to increased scrutiny from the U.S. Consumer Product Safety Commission—the federal agency charged with protecting the public from harm caused by certain consumer products—as well as the media and consumers. Handled incorrectly, a recall can result in damaged supplier and retailer relationships and a tarnished brand image that may be difficult to correct. And the legal stakes of a misstep are higher than ever.

“With the enactment of the Consumer Product Safety Improvement Act of 2008, the amount of penalties the CPSC is permitted to seek has been raised substantially—to $100,000 per violation, with the maximum penalties raised to $15 million for a related series of violations,” says Cheryl Possenti, an attorney with Goldberg Segalla in Buffalo, N.Y., a civil litigation specialist for a number of Fortune 100 companies.

According to Possenti, the CPSC can pursue civil penalties, not only for the sale of products that violate government safety standards, but also “when a company fails to report immediately to the CPSC that a product contains a defect that could create a substantial risk of injury to the public.”

In the mattress industry, there are two primary federal regulations under which bed sets might be recalled: 16 CFR Part 1633, the open-flame standard that took effect in 2007; and 16 CFR Part 1632, the cigarette flammability standard issued in 1973. According to the CPSC website, fewer than a dozen recalls involving mattresses or mattress pads have been conducted in the past 10 years, a relatively small number compared with many other industries. Baby mattresses and pads also are occasionally recalled under different regulations.

Despite the low frequency of mattress-related recalls, manufacturers and their business partners—everyone from component suppliers to distributors to retailers—must be vigilant to ensure that if problems with product safety do occur, they are reported to the CPSC quickly and that any issues are addressed and fixed.

Reporting responsibility

While U.S. manufacturers have the lead responsibility for reporting problems to the CPSC, distributors and retailers also must report if they are aware of a product defect or a company’s failure to comply with a regulation. They can either contact the CPSC directly or send a letter to the manufacturer or importer. Failure to report means distributors and retailers also may be liable for any legal penalties that are assessed.

In cases in which mattresses and foundations are being brought into the United States from other countries, the importer of record—the U.S.-based company that takes possession of the goods after they clear customs—is responsible for informing the CPSC of potential product safety problems. This company ultimately bears the responsibility for making sure the products it sells in the United States comply with regulations and for conducting a recall if they don’t.

To confirm that manufacturers and importers have the necessary safety programs in place, the CPSC conducts unannounced inspections of production plants and warehouses, examining products, records and procedures. It also can pull products from retailers to test for compliance.

The process of compliance starts with burn testing and confirmation burns of bedding prototypes and components by manufacturers, importers and suppliers before new mattresses and foundations reach the market. All bed sets sold in the United States must bear a label showing that products have been properly tested and comply with federal regulations.

Accurate labeling is the first line of defense against a potential product defect investigation, according to Joanne E. Mattiace, a principal of the Law Offices of Joanne E. Mattiace, a Westbrook, Maine-based law firm with a Washington, D.C., presence and focus.

“If a label doesn’t appear to be right, that may lead to a product being singled out for inspection and testing,” she says.

To avoid problems, Mattiace recommends that all parties in the distribution chain—manufacturers, importers, distributors, retailers—make sure that the products they are selling carry up-to-date safety law labels and registration numbers.

When a company has reason to suspect a product may pose a risk to public safety, the law requires it to file a report with the CPSC within 24 hours of a responsible party—an official or employee capable of recognizing its significance—receiving the information. Prior to that point, the company is allowed five days for that information to move up the chain of command. A maximum of 10 days is permitted for investigating the situation prior to filing a report.

“A lot of companies won’t recognize a triggering event for a violation right away,” says David Osterman, also an attorney with Goldberg Segalla. “One trigger is the subjective standard: a defect in the product that poses a substantial risk of serious injury or death. The other is more objective: three lawsuits involving a product that have resulted in verdicts or settlements, no matter how nominal, within a two-year period.”

Working with the CPSC

Reporting a product to the CPSC doesn’t automatically mean that the agency will conclude that the product creates a substantial hazard or that a recall or other corrective action is necessary. The CPSC staff works with the reporting company to determine what’s appropriate. But since 2008, the CPSC has taken a more active role in product safety inspection and enforcement.

“Since the passage of the CPSIA, the CPSC has gotten a lot more sophisticated,” Mattiace says. “They are saying to companies, ‘Don’t just tell us about a problem; take a look at the problem and determine what you can learn from it.’ They want companies to constantly be fine-tuning their systems and procedures so that future problems are minimized.”

If a recall is needed, the CPSC works with the company to put together an effective plan for public notification and implementation of the recall. According to the CPSC’s Recall Handbook, the objectives of a recall are:

  1. to locate all defective products as quickly as possible
  2. to remove defective products from the distribution chain and from the possession of consumers
  3. to communicate accurate and understandable information in a timely manner to the public about the product defect, the hazard and the corrective action.

The CPSC advises companies to design all informational material “to motivate retailers and the media to get the word out and consumers to act on the recall.” Typical forms of communication include a joint press release from the CPSC and the company; a dedicated toll-free number for consumers to call to respond to the recall notice; postings on company websites; video news releases; notices to distributors, dealers, sales representatives, retailers and other parties involved with the product; and other notices to consumers.

“Companies need to communicate clearly and completely,” Mattiace says. “It’s important that messages be consistent so that consumers understand the nature of the problem and what their options are.”

Because the goal of any recall is to retrieve and then repair or replace products already in consumers’ hands, as well as those in the distribution chain, it’s essential that companies maintain accurate records about the design, production, distribution and marketing of each product for the duration of its expected life cycle. To make sure that these records are accurate and accessible at the time of a recall, the CPSC recommends companies appoint a recall coordinator, as well as a backup coordinator, before an event actually occurs.

A company’s recall coordinator should be responsible for receiving and processing all information regarding the safety of the company’s products, including quality control records, engineering analyses, test results, consumer complaints, warranty returns or claims, lawsuits and insurance claims. Ideally, the recall coordinator has full authority to take the steps necessary to initiate and implement all recalls, with the approval and support of the president or chief executive officer.

Getting help

When faced with a recall, company executives have two choices: They can do the work themselves, following the steps outlined in the CPSC’s online Recall Handbook, or they can hire an attorney or other adviser, such as ExpertRECALL. Based in Indianapolis, ExpertRECALL handles everything involved in a recall, from setting up a call center and managing claims to collecting and destroying products after they’re returned. Since its formation in 2003, the company has handled more than 2,500 recalls.

With any recall, there are four key goals, says Mike Rozembajgier, ExpertRECALL vice president of recalls: “Protect the public, protect the brand, remove and destroy the product, if necessary, and complete the process as efficiently as possible. And, at all times, consumers, the media and regulators need to see that the company has a clear plan in place and is doing everything it can to make things right.”

Finally, Rozembajgier urges company leaders to regard product safety compliance as a “moving target” that requires daily attention.

“A compliance program needs to be more than a binder on a shelf collecting dust,” he says. “It has to be something that the whole company understands and puts into practice so that all rules and standards are met.” To help companies ensure that they have the proper systems in place, firms such as Lilly Management Group in St. Charles, Ill., conduct mock CPSC plant inspections and reviews of flammability compliance programs.

“Our program is designed to help companies evaluate their compliance status, identify shortcomings or gaps in their program and then resolve those issues,” says Bob Sabalaskey, Lilly Management Group vice president of manufacturing and product engineering. “It provides mattress manufacturers with a ‘real-world’ inspection experience and the opportunity to assess their FR compliance readiness prior to an inspection by the CPSC.”

As part of that readiness, it’s critical that mattress manufacturers “keep complete, organized records that show they meet federal standards,” Sabalaskey says. “And when they modify a product’s materials or construction, they need to provide ‘reasonable criteria’ data that demonstrate changes made to that model will not affect FR performance of that model.”

A company with a consistent, well-designed program of testing, monitoring and record keeping is in the best position to deal with any complaints that may arise, Possenti says.

“That company will have the most credibility with the CPSC and will be in a position to remedy the situation with minimal impact,” she says. “You may end up recalling just one out of 10 products, say just the queen-size models, rather than 10 out of 10.”

Unlike toys and other smaller, less expensive items, a bedding set is a relatively pricey item that’s typically difficult to fix.

“That makes the cost of a recall higher, since the product typically has to move quickly out of the distribution chain and a replacement needs to be made,” Possenti says. “A mattress also has a long life span, which means there’s a longer period of liability.”

In the end, a company with a strong compliance program will be in the best position to ensure product safety and avoid a possible recall.

As Possenti concludes, “The best-managed recall is the one that never occurs.”

The mattress recall process at a glance

Who must report a hazardous product? Any manufacturer, distributor, importer or retailer that has information about a potentially hazardous product must report it, according to the U.S. Consumer Product Safety Commission.

What types of defects must be reported? Companies must report to the CPSC if they obtain information that a product fails to meet a consumer product safety rule, standard or ban; contains a defect that could create a substantial hazard; or creates an unreasonable risk of serious injury or death. This information may be in the form of quality control data, product returns, warranty information, customer complaints, reports of deaths or injuries to consumers using a product, lawsuits or any other input suggesting a product safety problem.

When does a company need to report a hazardous product? A company must report to the CPSC within 24 hours of obtaining reportable information. The CPSC considers that a company has obtained knowledge of reportable information when that information is received by an employee or official of the company who may be reasonably expected to be capable of appreciating its significance. Under ordinary circumstances, five working days is the maximum time for information to reach the chief executive officer or the official assigned responsibility for complying with reporting requirements. However, if a company is uncertain whether information must be reported, it may spend “a reasonable amount of time” investigating the matter. The CPSC generally defines this period as 10 or fewer days.

Where should a report be filed? A company should file its report with the CPSC’s Division of Recalls and Compliance. The report may be filed by mail (4330 East West Highway, Room 613, Bethesda, MD 20814), telephone (301-504-7913), fax (301-504-0359) or electronically through the CPSC website (

What can a company do beforehand to prepare for a product recall? In addition to performing and thoroughly documenting all of the product and component tests required for a given product, companies should have a system in place to make sure that product defect and hazard information is captured and channeled to responsible managers so that they can evaluate and report it to the CPSC, if appropriate. A company also should assign the responsibility of reporting product safety hazards to someone with knowledge of the product in question and of the CPSC’s reporting requirements. The person should have the authority to report to the CPSC or to quickly raise the reporting issue with appropriate decision-makers within the company.

How will the CPSC evaluate a company’s handling of safety information? In evaluating when a report should have been filed, the CPSC considers what a company actually knew about the potential hazard posed by a product and what a reasonable person or firm acting in those circumstances would have known. Companies that are not responsible and informed about the safety of their products run a “great risk of future civil penalty liability” should a product recall ever be necessary, according to the CPSC.

What is the Fast Track program? Fast Track is a CPSC program designed for companies willing and able to move quickly with a voluntary recall of their products. The program eliminates some of the procedural steps in the traditional recall process, including the CPSC’s preliminary determination that the product contains a defect that presents a substantial hazard.

What is a CAP?

A CAP, or “corrective action plan,” is a remedial action taken by a company in response to a product defect or risk. Depending on the nature of the defect or risk, CAPs could include the return of a product to the manufacturer or retailer for a cash refund or a replacement product, the repair of a product or public notice of the hazard. The goal of a CAP is to correct as many product defects or risks as possible in the most practical, cost-effective manner.

Source: U.S. Consumer Product Safety Commission

One mattress maker’s recall experience

When a bedding manufacturer discovered a 16 CFR Part 1633 burn test failure during a routine quality control check involving one of its popular mattresses several years ago, the company immediately initiated an investigation.

The company spoke with BedTimes about its experiences but asked not to be identified.

After conducting re-tests with similar products from multiple plants, it determined that a problem existed with a specific core-FR sock combination used on one mattress model during a limited time frame. The problem was sporadic—sometimes the mattress would fail a burn test and other times it would pass. It also was puzzling:
Both the core and the sock were being used separately on other mattress models without a problem.

“It was very alarming,” says a company executive directly involved with the recall. “None of our records until that point had indicated a problem. And neither of the suppliers responsible for these components claimed they had made any changes. But there clearly was a danger when these two specific components were combined. We knew we had to move quickly to address the situation.”

The company immediately stopped production of the model with the troublesome core-sock combination. It also started tracing how many of the mattresses already had been made and where they had been shipped. A team was created to determine what other corrective actions needed to be taken and which parties—from suppliers and employees to retailers and consumers—needed to be notified.

The company also made early contact with the U.S. Consumer Product Safety Commission to alert officials about the problem and the steps being taken to address it.

“The CPSC was very helpful,” the bedding executive says. “They worked closely with us every step of the way, approving our plan for conducting a recall and providing other support as we moved forward.”

Using its existing product traceability systems, the company determined that the core-sock combination in question had been used on nearly 6,000 beds already produced, shipped or sold. The company’s records showed exactly which stores had bought the beds, so contacting dealers was straightforward. Identifying individual consumers, however, was more of a challenge, since some stores had detailed records and others did not.

“Tracking down consumers isn’t easy, so we made sure to use redundant methods of communication to spread the word,” the bedding executive says. In addition to news releases sent to the media and posted on the CPSC website, the company asked retailers to post notices. Using an outside specialist, a hotline was set up to field consumer inquiries.

For those consumers who could be identified as potentially being affected, the company created a letter for retailers to send out explaining that the product “has a manufacturing defect, does not meet our standards and qualifies for a replacement.” The letter invited consumers to contact the retailer for further information.

The fact that the core-sock combination was designed to be easily zipped on or off the mattress made the recall easier than it might have been. For those products still in factory or store warehouses, the company was able to simply swap out the core-sock combination with another approved sock.

The company offered consumers three, free-of-charge options: They could get a replacement kit mailed directly to them for self-installation, they could arrange for a technician to come to their home to install the kit for them or the company would take back their mattress and give them a new version.

During the first week the recall was made public, the company received 202 contacts from consumers. After a year, a total of 1,222 consumers called or wrote the company to inquire whether the recall affected them. Serial numbers were used to determine if particular products were part of the recall.

In the end, the company received fewer than 600 verified consumer claims under the recall. Of those, 285 were sent a kit for self-installation, 260 were sent a kit for installation by a technician and 26 received a replacement mattress.

“The CPSC says that about 20% of the product affected by a typical recall comes back and gets changed out,” says the company representative. “But you have to be geared up to repair or replace it all. Thankfully, we weren’t required to start taking back product right away so we had time to build up a stock of replacement covers.”

It took about four months between the time the company discovered the problem and when it started replacing product.

Reflecting on the recall experience, the executive says everything went smoothly. For that, he credits good organization, teamwork and clear communication with the CPSC and other outside parties.

“The CPSC was very complimentary about our attitude and attention to detail in dealing with this recall,” the company official says.

In addition, he says, “consumers ended up with a positive attitude about our company because we offered to customize the corrective action for them and make it as painless and easy as possible.”

For other companies faced with a possible recall, the executive says his best advice is “to follow the law, keep good records and bring in consultants when it’s appropriate.” In this case, the company hired Gordon Damant, former head of the California Bureau of Home Furnishings and Thermal Insulation and an expert on the mattress industry’s fire safety issues, “because we wanted an outside source to make sure we were analyzing the problem correctly. Having him involved also gave us more credibility with the CPSC.”

“We also would suggest, in addition to the required prototype and confirmation burns, that companies do random burns on all their models periodically to make sure everything is still in compliance,” the executive says. “That’s how we discovered this problem and were able to correct it before it became much larger.”

Crisis planning requires good communication

When faced with a possible product recall, too many company executives “play ostrich” rather than take decisive action and communicate with all stakeholders, says Jonathan Bernstein, president of Bernstein Crisis Management in Sierra Madre, Calif.

“They wait until the recall is required and then try to figure out what to do, resulting in additional risk for consumers and the company’s reputation,” Bernstein says.

The author of the new book, Manager’s Guide to Crisis Management, Bernstein has handled communications for a number of major product recalls. He offers these 10 tips for effective crisis communications:

  1. Be prepared The best time to prepare for a negative event is before it happens. Bernstein recommends that companies conduct brainstorming sessions about potential recalls and then develop a clear plan of response that addresses key operational, legal and public relations issues.
  2. Appoint and train a team A small team of senior executives should be formed and trained to manage communications in the event of a crisis. Ideally, the team is led by the president or chief executive officer, along with the company’s top PR executive and legal counsel as advisers. If the in-house PR executive doesn’t have sufficient crisis communications expertise, the company may need to retain an agency or independent consultant. Other team members should be the heads of all major divisions, such as finance, human resources and operations.
  3. Create contact lists Who are the stakeholders—employees, suppliers, distributors, retailers, etc.—who would be affected by a recall? Company leaders must ensure that a system is in place so that all stakeholders can be reached quickly in the event of a recall.
  4. Empower all employees with accurate information During a crisis, employees are PR representatives—whether a company wants them to be or not. “Don’t try to control damage by restricting the flow of information internally,” Bernstein says. “Be sure every member of your organization is equipped with the information necessary to represent the situation accurately to anyone who asks.”
  5. Use all available communication channels It is “absolutely essential,” Bernstein says, for companies to establish notification systems that will allow them to rapidly reach stakeholders using multiple channels, including phone, email and fax. This increases the odds that a message will get through. “It’s better to over-communicate than take the risk that important stakeholders miss the message,” he says.
  6. Consider the use of “virtual” incident management There are a number of Internet-based systems that allow recall team members to exchange real-time information, access current communications documents and keep team leaders updated, even if they are geographically scattered.
  7. Identify backups for critical people and systems “Assume that some recall-related lead personnel will not be available when you need them,” Bernstein says. “Assume that the computer system where you maintain your stakeholder contact lists might crash. Assume other similar worst-case scenarios and make backup plans accordingly.”
  8. Make decisions based on protecting the brand, not just the legal risks The infamous Bridgestone-Firestone tire recall in 2000 started “far too late because the company’s leadership was considering risks other than the most important one—the risk of aggravating the court of public opinion,” Bernstein says.
  9. Focus communications A few angry people can make waves completely disproportionate to their numbers or even to the injury suffered. The recall process should include an “escalated cases” team to focus on such complaints.
  10. Take responsibility Public backlash over a recall can occur for two reasons, Bernstein says: Distress that a product is defective and distress over the manner in which the recall was—or wasn’t—communicated. “You minimize public backlash by being proactive and transparent,” he says. And don’t wait for regulating agencies, such as the CPSC (U.S. Consumer Product Safety Commission), to get involved before communicating. “Bureaucratic processes can often delay how much time passes before distributors and consumers are notified—a delay which, in worst-case scenarios, can cause injuries or deaths,” Bernstein says.

Consumer website bears watching

Companies should monitor reports their about products
While formal recalls of mattresses and foundations are rare, a new government website launched in 2011 invites any consumers who believe they were harmed by a consumer product regulated by the U.S. Consumer Product Safety Commission to report their complaints for posting on the site.

Required as part of the Consumer Product Safety Improvement Act of 2008, the website,, provides a publicly accessible, searchable database of all such incident reports. Among the consumer product categories listed are mattresses, covers and pillows.

Consumers submitting reports are not required to provide any proof to support the alleged incidents. Instead, consumers are asked to “click” on a button verifying that the information is accurate to the best of their knowledge. Consumers are asked to disclose their identities to the CPSC, but they can choose whether the CPSC, in turn, may disclose their identity to the company that made, imported or sold the product.

Manufacturers, importers and private-labelers mentioned in these reports receive copies of the claims prior to posting. They then have 10 days to challenge the accuracy of the report, after which time the report will be posted on unless the CPSC finds it contains confidential or inaccurate information. If a decision is made to post the report, it is accompanied by the manufacturer’s written response.

“Producers must be prepared to respond quickly to these notifications,” says Cheryl Possenti, an attorney with Goldberg Segalla in Buffalo, N.Y. “Otherwise, they risk an untrue or misleading accusation being posted for all to see.”

Though reported in news media, including BedTimes, many companies are unaware that this database exists, Possenti says.

“They find out only after a complaint has already been posted and the damage to their image has been done,” she says.

Possenti says it’s critical that all producers take the time to register on the site so that the CPSC has current contact information in the event of a complaint. Without that information, the CPSC’s notification may not reach a company in time for it to respond to the complaint prior to its public posting.

The seriousness with which companies treat these claims varies greatly, says attorney David Osterman, also with Goldberg Segalla.

“Brand-sensitive companies with strong consumer recognition will want to be very engaged so that erroneous claims aren’t put into the public domain,” he says. “And, if the claim is legitimate, it’s important to file a timely response so that the public knows how you’ve handled the problem and can be assured that it’s no longer an issue.”

At the very least, companies need to be aware that a report has been received by the CPSC, he says: “That way, they can consider its merits and decide whether they want to respond or not.”


U.S. Consumer Product Safety Commission

Main site
To download the CPSC’s Recall Handbook
CPSC’s consumer database for reporting unsafe products

Goldberg Segalla

Law firm with offices in Connecticut, New Jersey, New York and Pennsylvania that specializes in litigation and serves as trial attorneys for a number of Fortune 100 companies.

The Law Offices of Joanne Mattiace

Law firm based in Westbrook, Maine, that specializes in helping corporate clients meet product safety requirements and standards.


Indianapolis-based company that helps businesses manage the various aspects of a product recall.

Lilly Management Group

Consulting firm based in St. Charles, Ill., that, among other things, helps mattress makers comply with federal safety standards.
Please link to this page: Surviving a Product Recall.

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