WEBINAR: Critical CPSC Recall Update PLUS 5 Things You Need to Know NOW to Avoid Product Safety Recalls, Fines and Collateral Brand Damage Presenters: Matt Howsare and Matt Smith

Presenters

Matt Howsare

•  Mintz Levin partner •  Co-chair of Mintz Levin’s

Consumer Product Safety group. •  Former Chief of Staff at the

Consumer Product Safety Commission

Matt Smith

•  Founder and chief strategist of ICIX •  A recognized authority in supply chain risk

management and product safety •  Champions industry-wide supply chain

solutions

Agenda

CPSC Update –  Leadership Changes –  What the CPSC announced last week –  New requirements on recalls –  General trends in fines and sanctions

Tips for doing recalls right Avoiding recalls in the first place Legal considerations and pitfalls Technology & processes that help avoid recalls

“There’s a consensus that the way the CPSC does recalls is a little outdated

in the era of Facebook and Instagram.”

CPSC Leadership Changes

•  President Trump nominated acting chair Ann Marie Buerkle to be the permanent chair 

•  More changes are expected

Ann Marie Buerkle

Why the CPSC is Exploring How to Improve Recall Effectiveness

•  Unanswered question: What is an effective recall? –  Recall effectiveness metrics

•  It isn’t good enough –  Consumer return rates between 6% and 10% –  ‘Recall fatigue’ appears to be a factor.

•  Technological advances –  Social media –  Apple Pay, Google Wallet, loyalty programs, apps

•  Ongoing issues & continuous improvement –  Issues and effort to improve are not unique to CPSC

Matt Howsare

What changes in the recall process could companies see?

•  Large emphasis on direct notification •  Required use of social media if your company uses

social media for marketing •  More detailed data analytics reporting

(email open rates, click rates, etc.) •  Tiered recall system

Matt Howsare

The 3 most interesting things the CPSC said

•  Only 46% of cases reported to the CPSC lead to a recall or recall alert

•  Recall alerts average a 50% consumer response rate –  Recall alerts allowed where company has 95%+ customer

contact information –  Advantages to recall alerts

•  On premises retail recall posters may soon be extinct.

Matt Howsare

Death of the Recall Poster?

“If a company uses social media to market its products, it must use at least two

social media platforms for recall notifications.”

Assessment of current and future trends

•  How does the CPSC decide who should be fined? •  How high will fines go? •  How might recalls change in

the Trump administration?

Matt Howsare

Tips for doing recalls right

•  Honesty and Transparency •  Effective Communication

–  Clear and concise language –  Joint press release with CPSC –  Direct to Consumer Notifications –  Company Website –  Social Media

•  Remedy –  Comprehensive and Easy

Matt Howsare

Avoiding recalls in the first place Critical to align your people and processes •  Most important component:

–  Train employees to send product safety information to the individual or team with responsibility and authority to act on it.

•  Other Considerations –  Obtain genuine senior management buy in. –  Train the team with responsibility for product

safety on CPSC and Health Canada requirements. –  Identify all potential inputs of product

safety information. –  Audit and test your program to identify weaknesses.

Matt Howsare

Matt Smith

Avoiding recalls in the first place Technology you need to manage processes: •  A comprehensive solution to give

you transparency across your products and supply chain

•  Flexibility via configuration to accommodate process improvements

•  Enterprise-grade security and scalability •  A strategic approach across operations

Matt Smith

Leveraging Information To enable communications and help prevent recalls, you need: •  Access to current information on

your products and supply chain •  To efficiently gather and distribute information to

internal and external systems •  A platform to analyze, predict and identify trends,

and aid process improvements

Q&A

Thank you!