The Promise and Risk of IoT Products

The consumer product world is experiencing a broad emergence of Internet-connected tech products with embedded sensors and microchips that allow them to perform tasks never before imagined. They are part of the Internet of Things (IoT) and they will eventually redefine what we consider normal.  And like many tech items that evolve from pricey retail versions to low cost promotional versions, the day when IoT products arrive in the promotional industry is likely to come soon.  Imagine a T-shirt that monitors your heart rate and then automatically adjusts the program of your treadmill, a pill box that emails you if your elderly mother forgets to take her medicine, or GPS–enabled stickers that can track anything with a Find-my-iPhonetype app.  These products and hundreds more are all possible in what our industry could call the Internet of PromotionalThings (IoPT).  In time, there are bound be IoPT features added to a wide range of industry categories – from pens to drinkware to bags to apparel – as developers find meaningful ways to reimagine the customer experience and broaden marketing opportunities.

But the benefits of IoT and IoPT may come at a price.  These connected consumer products are raising serious concerns for regulators around the globe as issues of cybersecurity and privacy abound.3  Consumers have already been subjected to hacking incidents with IoT control devices in automobiles, heart regulators, baby monitors, cameras, oil pipelines and credit card scanners, to name a few.  Promotional professionals should take the time to educate themselves about IoT now, before the products become plentiful in the industry, so that when they begin to appear you will be better able to make informed decisions and protect your clients’ brands.

Only 4% of the world was online in 1999 when Kevin Ashton, a British scientist working at Proctor and Gamble (P&G), coined the term “Internet of Things.”[1]It was the title of a presentation he gave on the use of radio frequency identification tags (RFID) for P&G’s supply chain. Ashton was convinced that life would be greatly improved if computers weren’t dependent on humans for data entry – that electronic sensors, like RFID, were much more efficient.  He wrote, “If we had computers that knew everything there was to know about things—using data they gathered without any help from us—we would be able to track and count everything, and greatly reduce waste, loss and cost. We would know when things needed replacing, repairing or recalling, and whether they were fresh or past their best. We need to empower computers with their own means of gathering information, so they can see, hear and smell the world for themselves, in all its random glory. RFID and sensor technology enable computers to observe, identify and understand the world—without the limitations of human-entered data.”

That same year, Neil Gross wrote in Business Week, “In the next century, planet Earth will don an electronic skin. It will use the internet as a scaffold to support and transmit its sensations. This skin is already being stitched together. It consists of millions of embedded electronic measuring devices: thermostats, pressure gauges, pollution detectors, cameras, microphones, glucose sensors, EKGs, electroencephalographs. These will probe and monitor cities and endangered species, the atmosphere, our ships, highways and fleets of trucks, our conversations, our bodies – even our dreams.”[2] 

The Internet of Things described by Ashton and Gross is in “full flower” today, says Pew Research Center, with IoT devices pervasive in cars, voice-activated assistants, appliances, security systems, health-monitoring devices, road sensors, and personal fitness trackers.[3] And with the crop of new products introduced at the Consumer Electronics Show (CES), IoT features have begun to emerge in cameras, door locks, door bells, beauty mirrors, window blinds, toothbrushes, hairbrushes, wine bottle sleeves, umbrellas and dozens of other products.[4]  The research firm Gardner estimates that 8.4 billion connected “things” are in use worldwide in 2017 and will grow to more than 20 billion by the year 2020.[5]

But according to Pew, “the very connectedness of the IoT leaves it open to security and safety vulnerabilities.”3It is these vulnerabilities that fuel regulators’ concerns.  At the November 2017 ICPHSO International Training Workshop held in Tokyo, Japan, regulators from the U.S., Europe and Japan participated in panel discussions on IoT security risks. Anne Marie Buerkle, Acting Chair of the U.S. Consumer Product Safety Commission (CPSC) addressed the issue directly in her keynote stating that cybersecurity in IoT devices has become one of CPSC’s highest priorities and is specifically noted in the Agency’s 2017 Report on Emerging Technologies.[6]  “But we cannot solve these issues by ourselves,” Buerkle said.  To address them successfully, she emphasized, will take a coordinated effort by regulators worldwide.  But this will take time as the issues are complex, the opportunities for collaboration are limited and there are many more questions than answers.

Examples of the safety issues CPSC is concerned about were identified in a hacking contest staged at the August 2016 Def Con Conference in Las Vegas.  Def Con is the longest running computer security conference in the world, attracting more than 20,000 hackers and IT professionals annually.  A month later, Def Con announced that 47 new vulnerabilities affecting 23 devices from 21 manufacturers were identified at the conference, allowing hackers to open locks, reprogram thermostats, freeze water pipes, and take control of a wheelchair, among others.  Fred Bret-Mounet, a researcher who found some of the issues stated, “I can shut down the equivalent of a small to midsized power generation facility or I can use that device as a Trojan within a target’s network to spy on them.”[7]

The vulnerabilities identified at Def Con have been attributed to a variety of predictable causes: poor design decisions, coding flaws, hard-coded passwords, back doors, inadequate testing, rush to market, lack of standards and regulations, and the lack of cybersecurity expertise.  These vulnerabilities are already showing up in the marketplace.  In New York City, in January 2016, the Department of Consumer Affairs issued a consumer warning about baby monitors that provide easy access for predators to watch or even speak to unsuspecting children, and the department announced that it had filed subpoenas against several major manufacturers of video monitors all of whom market their devices as secure.[8]  The risk of these types of vulnerabilities appearing in IoPT devices could be significant since our industry has little experience with cybersecurity and many of the factories that develop promotional products are small, with limited resources and with fast-track development cycles that sometimes skimp on performance testing.  Low cost and speed to market are often their defining objectives.

At the Tokyo ICPHSO conference, one of the expert panels focused on solutions – ways that IoT devices could be made more secure – and whether existing cybersecurity standards from standards organizations like ISO, IEC and UL are robust enough for IoT. Stephen Brown, Director of Innovation at the global test lab CSA Group, argued that existing cybersecurity standards are adequate if products are tested at qualified labs and subjected to comprehensive testing at each stage of their development.  But the testing protocol Mr. Brown advocated was extensive and may only be affordable for mega corporations.  David Kosnoff, VP of Quality Assurance for Hasbro, approached the problem from the manufacturer’s perspective and spoke about the need for cybersecurity training of everyone involved in the design and development of IoT products.  He also advocated enhancing Failure Modes Effects Analysis (FMEA) to include cybersecurity.  FMEA is a standard QA tool that manufacturers use to identify all the ways a product may might fail as a critical step in designing out defects in the product development stage.

Left unanswered are many questions our industry will have to deal with as new IoPT products hit the market. Without even considering privacy issues, the cybersecurity questions are extensive.  What is the responsibility of suppliers and distributors when vulnerabilities are discovered?  How will they handle registering users of IoPT devices so that software and firmware can be updated with patches?  How will suppliers develop firmware and software patches (to remedy vulnerabilities) without having in-house expertise in circuit board design, microchip programming and other intricacies of IoT devices?  Whose responsibility will it be to pay for these fixes and for how long? Will there have to be a new provision added to Section 15(b) of the Consumer Product Safety Act requiring companies to report on security breaches?  How will CPSC and other global regulators treat IoT vulnerabilities for product recalls?  And how will all of this impact recall insurance policies and premiums?  These questions and many more should be adequately addressed before the industry jumps into the deep end of the pool with IoPT devices.

So while it will ultimately be very cool to have a lunch box that can send an alert if peanuts are within 50 feet, a child’s backpack that allows a worried mom to track her elementary school child, or pens that can automatically notify the advertiser to send out a new refill when the ink is running dry, you should take the time now to implement an education program in your company to learn about the technology, the cybersecurity issues, the privacy issues, the regulatory issues and how you will evaluate products and vendors when these type of products come to market.




Int’l Certification

ISO 27000 Series Information Security Management System including SDLC and incident management Y
IEC 62443 Series Cyber Security Management System including product security and SDLC Y
NIST 800-53 Cyber Security Management System *US Only N
UL 2900 Product testing and evaluation N
*Courtesy of CSA Group


[1]Ashton, Kevin, “That ‘Internet of Things’ Thing,”
[2]Gross, Neil, “The Earth Will Don an Electronic Skin,” Businessweek, 1999.
[3]Rainie, Lee and Anderson, Janna, “The Internet of Things Connectivity Binge: What Are the Implications?” Pew Research Center,
[4]O’Donnell, Lindsey, “20 Crazy Connected IoT Products At CES 2017”,, January 12, 2017.
[5]Gartner Press Release, “Gartner Says 8.4 Billion Connected “Things” Will Be in Use in 2017, Up 31 Percent From 2016,”, February 7, 2017.
[6]Staff Report, “Potential Hazards Associated with Emerging and Future Technologies,” U.S. Consumer Product Safety Commission, January, 2018.
[7]Constantin, Lucian, “Hackers found 47 new vulnerabilities in 23 IoT devices at DEF CON”, IDG News Service,, September 13, 2016.
[8]NYC Consumer Affairs Press Release, “Consumer Alert: Consumer Affairs Warns Parents to Secure Video Baby Monitors,”, January 27, 2016.

16 Imperatives for Product Safety and Compliance

Yikes!  We’re barely past the halfway point of 2016 and already a whopping $25 million in civil penalties have been assessed against businesses this year for product safety violations.  A civil penalty is a fine levied by a regulatory agency of the federal government – in this case, by the U.S. Consumer Product Safety Commission (CPSC), the agency charged with protecting consumers against unsafe products.

The magnitude of these penalties should not be a surprise to PPAI members.  In his keynote address at PPAI’s 2015 Product Responsibility Summit. CPSC Chairman Elliot Kaye told our attendees that we should expect to see the Commission assess significantly higher civil penalties in 2016 than in the past because, as Kaye sees it, it is the only way some companies will get the message that the agency is serious about protecting consumers.  CPSC has shown the same enforcement resolve in the constant stream of recalls it announces each week, many relating to lithium ion batteries, a component found in dozens of promotional products.  Just this past week, on July 6, 2016, the Commission ordered ten companies to recall 500,000 lithium-ion powered hoverboards because of the risk of overheating, fire and explosion.  If the companies involved had to refund the retail price of all those hoverboards, the total cost could be more than $100 million!  Yikes, indeed!

In this challenging regulatory environment, it is prudent for all suppliers and distributors to redouble their efforts to educate their employees on safety and compliance basics and to verify that their company has a sensible compliance program in place for all of its supply chain activities, whether you are a direct importer or simply a sales rep selecting products from your favorite supplier.  If you sell promotional products, the rules apply to you no matter what your role is in the stream of commerce.

Here is a glossary of definitions, tips, guidelines and best practices to use in your review and training.  Treat it like a checklist to evaluate your own practices and to identify areas for improvement.

Definition 1
Product Safety vs. Regulatory Compliance – Both are equally important.  Regulatory compliance refers to meeting (and ideally, exceeding) standards required by regulators –the rules, laws and standards that apply to the products we manufacture, decorate and sell.  Standards can either be mandatory, such as those referenced in state and federal law, or they can be voluntary standards developed by industry consensus at organizations like UL and ASTM International.  Both types are important and both are used by regulators in their enforcement efforts.  The Consumer Product Safety Improvement Act of 2008 (CPSIA) is an example of a federal law that contains many regulations.  For example, it mandates that children’s products be tested annually at a recognized third party laboratory and that children’s toys must comply with the ASTM F963 Toy Safety Standard.  The law makes it illegal to sell children’s products and children’s toys that do not meet these requirements.

Product safety goes beyond regulatory compliance in dealing with whether a product is safe to use, even if it meets every applicable rule or even if it is one of the many products for which there are no mandatory or voluntary rules.  The hoverboard recall is an example of a product for which no safety regulations were violated but the product was deemed by CPSC to be unsafe anyway.  The Commission has statutory authority to recall any product it deems unsafe, no matter what.  Period.

Definition 2

Mandatory vs Voluntary Standards – Both are equally important.  Whenever a standard or rule is incorporated into a law, that standard is mandatory.  The Toy Safety Standard F963 is a good example.  Originally a voluntary standard, after the Mattel Barbie Doll recalls in the summer of 2007 an angry Congress chastised industry for not policing itself so it made the standard mandatory.  There are thousands more voluntary standards than mandatory standards as it is benefits everyone – consumers, business and government – when business and industry polices itself.  At PPAI’s 2015 Product Responsibility Summit, Marc Schoem, then CPSC’s long-term Deputy Director of Compliance (now retired) stated unequivocally that the Agency considers voluntary standards to be the minimum acceptable – the least a company should comply with.  So be sure to always find out – usually by speaking to an expert at a testing lab – if there are voluntary standards applicable to the product you are selecting and then verify that the product complies.

Best Practice #1
You are responsible!  No matter who you buy from, no matter how long you have done business with that supplier or factory, no matter what, you are ultimately responsible for the quality, safety and compliance of every product you sell.  Your customers don’t know your factory or supplier.  They’re doing business with you because they trust you.  Of course you will entrust a great deal of faith in your, reliable, high-quality suppliers.  But remember, even the largest and most trustworthy brands on the planet – Apple, Sony, Disney, Fisher Price, Johnson & Johnson to name a few – all have had major product recalls and serious quality gaffes, so you can be sure that even the most reliable companies in our industry have quality and compliance issues.   Don’t take anything for granted and don’t assume anything.  Suppliers have hundreds and, in some cases, even thousands of products on their websites.  No one has the resources to be an expert in everything.

Best Practice #2
Nurture a product safety culture in every aspect of your work so that you’re automatically thinking of safety and compliance with each project you work on, with each product you select, with each order you take, with each supplier or factory you work with and with each client presentation you make.

Always assume responsibility for the safety, compliance and appropriateness of the product that you are selling.  You are 100% responsible for making the right product decisions for your clients.

Best Practice #3
Learn the products in the industry that are subject to compliance requirements.   Anything used by a child heads the list since the major focus of the Consumer Product Safety Improvement Act (CPSIA) is children’s products and children’s toys.  Children’s apparel and sleepwear are both regulated by CPSC as are art materials like such as highlighters.  Food and all products that come into contact with food, are regulated by the U.S. Food and Drug Administration (FDA).  In addition to mints, chocolate and other common promotional foods, this category includes all types of promotional water bottles, tumblers, lip balms, hand sanitizers, sunscreens, lotions and cosmetics, sunglasses, first aid kids and more.   Learn the key considerations for each of these products.  For example, food containers like drinkware need to be tested to verify that chemicals from the container will not “leach” into the food or drink.  This list is just an overview.  You can get a more complete list, category by category from any of the major testing labs.

Best Practice #4
Develop a standard checklist of questions to ask every client for every project you work on.  What kind of event is the product for?  How will it be used?  Who is the intended audience?  If there are children, what are their ages?  In which states or countries will the product be distributed?   Does the client have any compliance requirements that exceed mandatory requirements?  Then, use the information you learn to help you select the most appropriate products and to properly advise your supplier.

Best Practice #5
If you find out that the intended audience includes children, make sure the products you select are age appropriate, even if there are no specific compliance requirements.  There is no mandatory regulation to prevent you from selecting a string backpack for a pre-school camp event, but a corded product for very young children is probably not the most prudent choice.  Similarly, don’t select a product that would break into shards if a six-year old threw it on a cement floor because sooner or later that’s probably going to happen.  Common sense is the best rule here.

Best Practice #6
If children are involved, always require CPSIA compliance no matter the age.  CPSIA is a complicated law that doesn’t always make common sense.  For the most part, as noted earlier, CPSIA focuses on children’s products, which it defines as products primarily intended for children 12 years of age or younger.  CPSC has issued guidance as to what “primarily intended” means but you should ignore it.  If children are involved, don’t try to figure out if the law technically applies – just make sure your product complies.

Let’s say you pick a product like a sports water bottle for a PTA fund raiser and that the imprint is not something obviously juvenile like Elmo or Winney the Pooh.  Since the product has equal appeal to all ages, including young children, CPSC might say that the bottle is a general use item not subject to CPSIA requirements.  Now assume that bottle is decorated with a lead-containing ink, that a well-meaning consumer advocacy group finds out about it and that group issues a press release criticizing your client for distributing leaded products to children. Is your client going to want to stand up at a press conference and say, “well, our vendor told us that the bottle isn’t technically covered by the lead rules.”  Of course not.  At that point it is a public relations nightmare for your client and the damage has been done, regardless of whether the product is technically compliant.

If you think this example is far-fetched, search Google for the Wegman’s grocery bag recall after a consumer group found lead in their reusable grocery bags or a similar expose by a Tampa TV station which led to millions of these bags being recalled.  In both cases, no compliance violations were involved – only the common sense fear about putting your family’s food in a container containing harmful lead – and the fiascos resulted in millions of bags being recalled.

Best Practice #7
Don’t assume that product you select for children has been tested to CPSIA requirements.  If you learn that the intended audience includes children, you should always select products that are fully CPSIA compliant.  In the promotional industry, that can be a challenge.  Most items used for children’s events are imported as general use items, appropriate for all ages and not subject to children’s product regulations.  They only become “children’s products” subject to CPSIA after they are decorated with juvenile art.   So it’s very possible that the supplier may not have incurred the expense to have the general use product tested to children’s product standards.  As a best practice, whenever selecting products for children or family audiences, always verify that the products have been tested to full CPSIA compliance at a CPSC-certified third party laboratory within the past 12 months.  If the supplier claims that the product has been tested, ask for the test report and see for yourself.

Similarly, you should personally verify that the item is manufactured with the level of fit, finish and quality that a safe children’s product requires.  Always devote your highest degree of scrutiny when children are involved.

Best Practice #8

Always ask where the products you sell are going to be distributed.   Why is this important?  Many states have laws that layer on top of federal law, and most countries have different product safety requirements than here in the U.S.A.   Chemical regulations are a good example.  In recent years, many states have passed chemical legislation regulating children’s products and children’s jewelry and some have rules that apply to all consumer products. California, for example, has a chemical labeling law commonly known as Proposition 65 which is intended to warn consumers about products that contain carcinogens.  Because of high testing costs, most companies opt to comply with Proposition 65 by affixing a warning label to each product stating that the product contains chemicals known to the State of California to cause cancer.  But since it’s not generally desirable in the promotional industry for companies to hand out free gifts with a warning about cancer, some choose to avoid the warning labels by testing for the most common carcinogens.  It’s not a fail-safe strategy and it’s not inexpensive.  California’s carcinogen list exceeds 900 chemicals so there is no affordable testing protocol to test for all of them.  When selecting products for California, work closely with your suppliers to learn their practices and to determine the best strategy – testing, labeling, or a combination of both – that works for your risk tolerance and that of your clients.  Illinois, Maine, Washington, Massachusetts, Vermont, and Connecticut are among the other states that have passed chemical regulations in recent years.

Speaking of chemical legislation, you should be aware that Congress has just passed and President Obama has just signed into law the Lautenberg Chemical Safety Act – a major revision to the existing Toxic Substances Control Act of 1976.  Over the next several years this updated law could impose significant new chemical restrictions for products in our industry.

The best strategy for complying with chemical regulation is to develop a relationship with one of the nationally recognized labs.  PPAI members can take advantage of discounted testing rates with our affiliate partner UL as well as having access to a trove of educational materials and webinars through PPAI’s product safety department.

Best Practice #9
Learn the questions to ask your supplier or test lab for every product you sell, until the answers are second nature to you.  What voluntary and mandatory standards apply to the product?  When and where was it tested?  Tested for what?  CPSIA?  Prop 65?  Phthalates?  Toy Safety?  UL2056 (for lithium ion)?   Is it UL certified or certified by another Nationally Recognized Testing Lab (NRTL)?  Ask to see the full copies of test reports and give them to a person qualified to understand what they say.  Are they current?  Are they thorough?  Were all seven phthalates tested?  Which toy safety (ASTM F963) tests were conducted?  Does the test report include color photos of the products tested?  Do the photos match exactly with the product you plan to buy?  Get an actual sample of the product and hold it in your hand.  Does it seem well-made?  Is the fit and finish that of a quality product?  Can you easily pull it apart?  Are there sharp edges?  Is it a product you have experience with and knowledge of its material, design and construction?  Are you aware of the technology used and the key quality differentiators with that product?  Would you be able to differentiate between a high quality, well-made safe product and one with lesser quality?  Sometimes the differences are hidden inside, especially with electronics where the protective circuits need the highest quality components that won’t fail under stress.

These are just some of the questions you should be asking yourself for every product you sell.  Remember that when you select a product for your customer – particularly one that will be decorated with your client’s brand or logo—your client is trusting that you have the professional skills, knowledge and experience not to put their brand and logo in harm’s way, by selecting an inappropriate, unsafe or non-compliant product.  Of course you wouldn’t do that intentionally, but once you develop a true product safety culture you will begin thinking of that responsibility differently, as if you were deciding on a toy for your own new born infant.  That’s the level of caring and diligence your clients deserve.

Buy from the most reliable factories and suppliers you can find but don’t put blind faith in anyone.

Best Practice #10
When you speak to your supplier about safety and compliance, speak to the person in charge of safety and compliance – not a customer service rep or a sales person.  Compliance can be complex and nuanced based on the particular circumstances even for those us of who deal with it every day.  Over the past nine years, I have conducted dozens of workshops and training classes throughout the industry to educate and raise awareness on the basics of product safety and compliance in the promotional industry.  But merely attending a class like mine or reading from a website description or an FAQ doesn’t qualify anyone to give advice.  Always speak to an expert when seeking actionable information about product safety and compliance.

Best Practice #11
Regardless of the job title of the person you speak to, do not rely solely on what that person tells you or what you may read on their website.  As noted, you are ultimately responsible.

Best Practice #12
Learn How to Read a Test Report.  Speaking about test reports, this would be a good time to reiterate a topic that has caused more misunderstandings and “gotcha’s” than anything else in the promotional world – worthless test reports.  Here’s what happens:  You ask for a test report and your supplier or factory sends you what they have.  It might be for the product you are considering and it might be for a similar one or for a different product altogether.  The test may be from a CPSC certified lab or not.  The report may be complete or not – with some tests covered and other ones not.  Or it could be for European standards instead of ours.  It may include a photo and may not.  The point is, tests are expensive and most of the people handling these reports are not experts.  So buyer beware.  Learn how to read a test report and know what you’re looking for.  Or find someone in your company who is an expert and verify that that the tests are complete, in date and applicable to the specific product and color you’re purchasing.  PPAI has presented webinars on this topic which are available online to members.  There’s also a monograph to accompany the webinar that explains step-by-step how to read a test report.

Best Practice #13
Adopt a sensible risk management strategy.  Quality and compliance is critical but it isn’t your only job.  You have to find a way to manage this risk within the context of your time available.  You already do this in your everyday family life without thinking about it as a formal strategy.  You probably devote much more time selecting healthy foods for your children than you might spend deciding what outfit to wear in the morning.  One has a much higher risk factor than the other.  Similarly, when you don’t have extensive time to research a particular purchase, you probably pick the brand you’ve had the best experience with.  So you already know a lot about risk management.   How does that translate to our industry?  Devote the most time to the highest risk products and the highest risk situations.  Children’s products, children’s jewelry and children’s toys all have significant compliance and safety implications, so you should naturally devote greater scrutiny to these products.  Food products, food containers, hand sanitizers, lip balms, sun screens, skin lotions, and sun glasses are all regulated products with significant safety and compliance implications.  And, of course, the single most dangerous product in our industry – lithium ion – which powers portable phone chargers, Bluetooth speakers and a wide range of other electronic products, deserves your greatest scrutiny.  Learn the key safety and quality differentiators for each of these high risk products and then choose carefully.  Very carefully.

Best Practice #14
Include safety and compliance requirements on your purchase orders. 
Compliance and product safety in the promotional industry requires clear communication and a strong partnership between the distributor and supplier.  All the information you learn in your client meeting – the intended audience for the promotion, the ages of any children involved, the states or countries where the product will be distributed – should all be written on your purchase order.  Don’t assume anything!  It doesn’t matter if you mentioned your requirements to a customer service agent or wrote them in the email with your PO attached.  Suppliers get many hundreds of calls every day and thousands of emails.  The only document that is certain to travel with your order from start to finish is your purchase order and it is also the contract between you and the supplier.  If the product must comply with CPSIA, or Prop 65, or the Illinois Cadmium-Safe Kids Act, include that as a special instruction on your purchase order.  It’s also a smart idea to ask the supplier to specifically confirm that they can comply with these instructions.

Best Practice #15
If you hear of any safety or compliance incidents, report them to your company immediately. 
If your client emails you about an incident – perhaps that a glass tumbler broke and someone’s hand was cut – report it to your company and investigate immediately.  Do the same for a compliance violation, if you find out after the fact that a product your company shipped was not compliant.  CPSIA contains strict reporting requirements that start the moment you learn of an incident.  The single biggest reason for the civil penalties I mentioned at the start of this article was failure of these companies to notify CPSC in a timely manner. Always let your compliance team know of any incidents reported to you.

Best Practice Tip 16
Find a compliance/product safety advisor or mentor to help you learn and make the right decisions.  Even the most knowledgeable and experienced compliance practitioners have colleagues and consultants they rely on for expert advice and second opinions.  No one is an expert at everything, especially in a field as broad and complicated as compliance.  There are notable experts in our industry – at PPAI and its Product Responsibility Action Group – but the most reliable sources of compliance expertise are major testing labs, professional consultants and experienced product safety attorneys.

So there you have it – sixteen ways you can protect your clients and your business.  Post them on your refrigerator.  Pass them around your office.   Make them part of your DNA.  They will make you more valuable to your clients and to your employer and they will help distinguish you in an industry of commodities. They are the essence of PPAI’s Product Safety Aware initiative and they will make you a worthy product safety ambassador.  But most of all, they’re the right thing to do.

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Rick Brenner is president of RFBrenner LLC, a management consulting firm.  He coaches CEOs and advises industry firms on growth, strategy, finance, acquisitions, operations, product development, supply chain, improving profitability and developing wealth.   Mr. Brenner also heads Product Safety Advisors LLC which helps firms and implement product safety, compliance and social responsibility programs.  He is the immediate past chair of PPAI, president elect of ICPHSO – the International Consumer Product Health and Safety Organization, and an 18 year industry veteran, 12 as CEO of Prime Line. 

Voluntary Standards are Not Optional. They’re the Minimum.

At a recent industry event, a top 40 supplier told me about a USB phone charger his company added to its line.  “The factory with the UL-compliant model was more expensive, so we decided to go elsewhere and buy a cheaper one,” he said. “With so many inexpensive adapters on the market, we didn’t feel that our customers would be willing to pay the higher price.”

Of all the product safety imperatives in the promotional products industry, none is more widely misunderstood than compliance with “voluntary” or “industry consensus” standards.  Most distributors and suppliers are either unaware of the critical importance of voluntary standards in the United States or under a misconception that compliance with voluntary safety standards is optional.  But the CPSC doesn’t agree.  Speaking at PPAI’s 2015 Product Responsibility Summit, Marc Schoem, Deputy Director, Office of Compliance and Field Operations for the U.S. Consumer Product Safety Commission (CPSC), said “The Commission expects all consumer products – including promotional products – to be fully compliant with applicable voluntary standards.”  Perhaps most surprising to the 190 attendees was Mr. Schoem’s follow-up opinion that voluntary standards often don’t go far enough and that CPSC generally regards voluntary standards as a minimum.

Standards Development – A Private Sector Process with Government Participation

Voluntary standards, developed by private sector participants, have provided the backbone of product safety in America for 100 years.  The American National Standards Institute (ANSI) – a non-governmental organization (NGO) – is responsible for overseeing and accrediting voluntary standards in the United States.  The individual standards are developed under the supervision of more than 200 standards development organizations such as ASTM International and Underwriters Laboratory (UL).  The U.S. Toy Safety Standard, F-963, well-known to our industry since Congress made it mandatory in the Consumer Product Safety Improvement Act (CPSIA), is an example of an ASTM standard developed by its F15 committee.  UL2054, the lithium-ion battery standard in the U.S., is an example of a UL standard.  Government regulators have long preferred to have industry police itself through voluntary standards, however, Congress took the additional step of memorializing that preference in The National Technology Transfer and Advancement Act of 1995 (NTTAA).  That legislation requires federal agencies to defer to standards developed by “voluntary consensus standards bodies” whenever possible and to participate in the process.  However, governmental participants on standards development committees do not normally have a vote.

How a Standard is Developed

To understand how a standard is developed, consider the genesis of ASTM’s new liquid laundry packet standard.  Soap manufacturers had developed a novel method of packaging liquid laundry detergent into convenient, individual-use packets.  While the attractive and colorful packets were an instant hit with consumers, they were mistaken by many children as candy.  Before long, hundreds of poisoning cases were reported at hospitals and poison control centers nationwide.  Responding to the surging incidents, CPSC sent a letter to ASTM asking that a committee be formed to develop a standard for laundry packets that would eliminate or minimize the danger. ASTM invited all interested parties – manufacturers, retailers, government regulators, consumer advocates, trade associations, technical experts, academics and others – to meet to discuss the hazard.  As a result, the Liquid Laundry Packet Subcommittee F15.71 was formed, a chair was selected and the challenging process of agreeing upon a comprehensive standard was begun.

Depending on their client’s or employer’s role in the stream of commerce, each of the participants on a standards development committee has priorities for what will ultimately be included or excluded from the standard.  Accordingly, the discussions can become protracted and contentious.  It took a full two years for the laundry packet subcommittee to work through issues including child-resistant packaging, candy-like graphics, and whether a foul-tasting coating could be added to the outside of the packets to deter ingestion.  It is up to the subcommittee chair to find common ground, build consensus and get the participants to agree on key elements.  Like any collaborative process, no participant is likely to get 100% of what he or she wants.  Even after a standard is developed and published, its development committee continues to meet periodically to evaluate injury data and consider whether that standard needs to be revised or updated.

The Alternative is Mandatory Regulation

U.S. reliance on voluntary standards is a major benefit to American business.  Consider the alternative.  Would you rather have regulators decide the mandatory requirements for your products without your input or interest in mind or would you prefer a consensus process where industry participants get a seat at the table in every stage of the process and have a vote in the final outcome?  The answer seems obvious but sometimes it has taken the threat of regulation to prod market leaders to agree on a restrictive standard.  In February 2015, when the liquid laundry packet subcommittee had not yet achieved consensus on a new standard, U.S. Senator Dick Durbin (D-IL) and U.S. Representative Jackie Speier (D-CA) lit a fire under the subcommittee by introducing a bill in Congress entitled The Detergent Poisoning and Child Safety Act requiring CPSC to set mandatory safety standards for liquid laundry packets.  But in September 2015, immediately after the ASTM’s laundry packet subcommittee reached consensus and published its new standard, these same legislators issued a press release commending the subcommittee for the new rules stating that “we will be monitoring their effectiveness and evaluating whether further action or legislation may be needed.”

A similar example occurred in September 2011, prompted by the CPSC.  Acting on a petition by four consumer advocacy groups to ban toy jewelry containing more than trace amounts of cadmium, CPSC directed its staff to begin drafting a notice of proposed rulemaking – the first step in developing a mandatory regulation – unless an effective voluntary standard could be developed on an expedited basis. As a result of this pressure, in just two months, an ASTM subcommittee published Standard Specification for Consumer Product Safety for Children’s Jewelry (ASTM F2923-11) and related provisions of the toy safety standard were revised the following month.  Six months later, after getting confirmation from CPSC staff that the new voluntary standard was adequate, and that there was substantial compliance with the voluntary standard, the Commission voted to withdraw its directive for a rulemaking.

“Substantial compliance” is indeed a critical factor in the success or failure of a voluntary standard.  Lawmakers and regulators do not hesitate to take matters into their own hands by issuing mandatory regulations if they determine that voluntary standards are not working effectively to protect consumers. In the summer of 2007, millions of toys were recalled, many because they didn’t meet the ASTM voluntary toy standard.  An angry Congress responded by enacting the CPSIA which made the toy safety standard mandatory.  Voluntary standards can also be “incorporated by reference” into U.S. law which effectively does the same thing – makes a voluntary standard mandatory.  This is a common practice across government agencies.  The National Institute of Standards and Technology ( maintains an online database of all voluntary standards that are incorporated by reference into federal regulations.[1]

Voluntary Standards, Mandatory Compliance

Don’t let the word “voluntary” fool you.  Voluntary standards can be enforced just like mandatory standards.  Even if a voluntary standard is not incorporated by reference into a federal law, agencies are able to use other statutory authority to enforce it.  UL 588 is the designation for the long-established voluntary Standard for Seasonal and Holiday Decorative Products.  In a June 2015 letter, CPSC warned that any products not meeting the three “readily observable safety characteristics” set forth in UL 588 – minimum wire size, sufficient strain relief and overcurrent protection – would be considered as having a “Substantial Product Hazard” under Section 15 of the Consumer Product Safety Act and either refused admittance into the United States or ordered to be recalled.

What About The Customer?

We’ve talked about how voluntary consensus standards are the backbone of product safety in the U.S. and about how serious our regulators are about compliance with these standards.  But what about our customers?  What level of safety do they expect?  What duty do we owe to them to ensure that the logoed products they give away to spread goodwill are safe and compliant with applicable standards?  To the supplier who decided not to carry the UL-compliant phone charger, would distributors still sell this product to their end-buyer customers if they knew it wasn’t compliant with the prevailing standard?  Would they care?  What if the supplier’s website was fully-transparent and said, “This model has not been tested to the UL standard because we didn’t think distributors would pay the higher price for a tested model.”  Would distributors still buy the product?  What about the distributor’s customers – the end-buyers whose names, logos and reputations are on the line with the products they give away?  Do you think these end-buyers are aware they are getting a cheaper, non-compliant model or do you think they expect that the promotional products they buy are compliant with all applicable safety standards?  What if an end-buyer gives away one of the non-compliant adapters and it causes a fire?  Who would blame whom?  What would be the distributor’s and end-buyer’s expectations?

Are Promotional Products Subject to Voluntary Standards?

There are many products in the promotional products industry covered by voluntary standards.  In addition to phone chargers and children’s jewelry previously discussed there are standards for products in most industry categories including apparel, drink ware, writing instruments and, of course, technology and electronic products.  Rechargeable lithium-ion mobile power banks present a challenging example of a wildly popular promotional item with potentially serious product safety risks.  Compliance for these products is more complicated than many because there is one voluntary standard for the lithium-ion cell, another for the assembled power bank and yet another for safe transportation of the assembled power bank.  Don’t overlook tech products that contain internal lithium-ion batteries as well, such as rechargeable Bluetooth speakers.  Unfortunately, many suppliers and distributors of these products do not have an understanding of these standards and many of the products on the market have not been tested to the applicable standards.

Best Practices: What Should Suppliers Do?

Suppliers should have a detailed, step-by-step risk assessment process for every product in their line.  Learning the voluntary standards that are applicable for each product is one of the most important steps of the risk assessment process.  Third-party testing labs can be a good resource for this information as are the websites of standards organizations like ANSI, ASTM and UL.  Concerning Mr. Schoem’s point about exceeding the minimum, each time you evaluate a new product, you should determine with your compliance and product development teams whether the voluntary standards applicable to that product go far enough.  Have the standards been updated to deal with current products, current technology and consumer behavior?  Have any new risks emerged?  What are other manufactures and suppliers doing with similar products, both inside and outside of our industry?  What are customers asking for and expecting?  Have there been any recent recalls for this category of product?  And don’t forget to consider foreseeable misuse of the product.  Informed by the insights you gain from investigating these issues, establish and document the specifications and standards you expect your product to meet.  Then, after your product is designed and manufactured, the next step is what standards developers call “conformance assessment.”  At the Product Responsibility Summit, Ken Boyce of UL said, “Without conformance assessment, voluntary standards are just good ideas.”  Conformance assessment includes all of the verification processes including self-testing, surveillance, inspection, certification, auditing, and third-party testing to ensure that the product meets your specifications and the standard.  One last note for your marketing team:  It’s very helpful for distributors if the supplier’s website and catalogs communicates the standards that the product complies with and where the distributor can obtain copies of the test reports.

Best Practices: What Should Distributors Do?

For distributors, don’t presume that a product is compliant just because a supplier is large, prominent or carries industry certifications.  Get to know the compliance people at each of your suppliers.  Ask lots of questions, particularly for high risk categories like consumer electronics, products to be used by children, food products, health care products and personal care products.  Are there any voluntary standards applicable to the product?  Does the supplier have current third-party testing and adequate documentation to confirm that the product complies?  Ask the same question of different suppliers and to a lab partner to be sure that you’re getting consistent and accurate answers.    Most important, don’t assume anything.  Your customers expect the products they buy will comply with all standards, whether or not it’s the law.  They are relying on you, your integrity and experience; don’t let them down.


How Close Is The Tipping Point For Our Industry?

Having recently returned from PPAI’s highly acclaimed Product Responsibility Summit, I am more and more convinced that our industry is inching closer to a tipping point where the standards required for a successful promotional products business are materially different than those of just a few years ago. I raise this point now, before it becomes universal, because as chair of our 11,000-member association, it is my hope that all PPAI members emerge as winners in this brave new world. However, I fear that unless everyone ramps up their efforts to evolve, that may not be the case.

At the beginning of this year’s Summit—PPAI’s most well-attended educational event ever—I asked the 185 attendees how many had “compliance” in their job title. Except for the CEOs and service providers in the room, the answer was nearly everyone. Wow! What a sea change this is from our first Product Safety Summit five years ago when almost no distributors or suppliers had dedicated compliance staff and the industry was still trying to sort out what product safety meant. Things have changed indeed. In our session on best practices, we heard from large and small distributors alike who vet supplier compliance thoroughly, seek out independent certification of suppliers and actively direct orders to suppliers who have the most comprehensive compliance programs. And since rigorous compliance, factory audits and product testing is very costly, the price of entry for success at the highest level in our industry has gone up dramatically.

Change is not just occurring in compliance. Technology is rewriting the rules for success in our industry just as it is in all others. While overall sales in our industry grew by a scant 1.1 percent in 2014 versus 2013, online sales grew by a massive 33 percent in that same period. Direct online promotional product sales rose to $800 million in 2014—four percent of total industry sales—and will continue to grow as more industry players and, quite possibly, well-funded non-industry players, offer compelling online solutions.

This is consistent with an April 2015 Forrester Research study entitled “Death of a (B2B) Salesman” which predicts that a million business-to-business salespeople in the United States will lose their jobs by the year 2020 as more and more customers opt for self-service e-commerce websites. In a related article, Forbes magazine noted that nearly 75 percent of B2B buyers now say that buying from a website is more convenient than buying from a sales representative. Further, 93 percent say they prefer buying online rather than from a salesperson when they’ve decided what to buy.

Forrester contends that salespeople who are essentially “order takers” will fare the worst while those engaged in “consultative selling” will do the best. The Forbes article added that in a technology-driven world, companies will need to become “omni-channel,” meaning they need to provide the seamless purchasing channel their customer prefers—whether by an in-person sales call, web browser, tablet or smartphone, telephone, Skype, chat, text or email, social media, or through a brick and mortar showroom.

Harvard Business Review added a hopeful perspective on the Forrester Research in an article titled, “B2B Salespeople Can Survive if They Reimagine Their Roles.” In part, the article said: Today’s field salesperson should be an educator, negotiator, consultant, solution configurator, service provider and relationship manager. They are integral to discovering the “something more” that customers want. As customers will tell you, a salesperson must add value by becoming part of the product or solution.

In a full-day strategic planning session earlier this year, David Nicholson, president of Polyconcept North America (PCNA), led the PPAI board in a deep-dive discussion into these and other disruptive changes that are already happening or potentially threatening our businesses, our industry and our association. The discussion focused on changes resulting from the combination of globalization, technology and demographics, and the distinction between our well-established supplier/distributor industry and the overall promotional products marketplace.

Today’s promotional products buyer has many options outside of our industry. Aside from domestic options through new players such as Amazon, Café Press, Zazzle, VistaPrint and Custom Ink, there are many overseas options. For the past few years, there has been a “Small-Order Zone” at the Hong Kong Gifts and Premium Fair with hundreds of vendors offering small- quantity, quick-ship services. Alibaba and other Asian portals provide U.S. buyers with instant access to thousands of Chinese factories, but without the quality and compliance oversight of a PPAI member.

It isn’t just purchasing options that are evolving—so are our customers. Millennials—the youngest members of our industry who came into adulthood after the year 2000—have different norms, values and buying habits than their baby boomer parents. Technology isn’t something they’re just learning to deal with—it’s part of their DNA. They expect to be able to buy online, do research about you and your products and share their experience with all of their friends. They expect your website to work as well as Amazon with all the same rich features they’re used to, including comparisons, reviews and one-click ordering. They’re socially conscious. They care that you’re buying from factories that pay employees fairly and have safe working conditions. They expect the products you’re selling to be safe.

Webster defines tipping point as “the critical point in a situation, process or system beyond which a significant and often unstoppable effect or change takes place.” No one can deny there are great changes occurring in our industry. Some of us are experiencing them sooner or to a greater degree than others. How close is the tipping point at which the industry as we know it is irreversibly altered? How are you preparing by updating your business practices, by investing in technology and by educating your team, as so many did at the Product Responsibility Summit?

Whatever the changes, PPAI will continue to be your closest ally in providing support, education and affordable tools. I hope you will take advantage of all your Association offers, that you will respond to whatever challenges the future brings and that you will continue to have great success in the promotional products business for many years to come.

Recall Readiness 101: What if you just found out that you need to recall 12,500 tumblers?

Consider this scenario:  For the past five years, your distributorship has been running a high volume online store for Appleton Digital, a global media firm that happens to be your largest client.   Last month, your office received an urgent message from Appleton that a popular item you import directly—a glass tea tumbler you’ve had in the program for three years—shattered when a user filled it with boiling water.  Glass shards were reportedly sent in all directions and the person suffered incisions and lacerations.  Your client is still following up on the details but wants the tumbler out of the program immediately.  He says that he heard there might have been a few other complaints with this product in the past that Appleton never passed on to you.  You’re concerned because in addition to the 2,500 tumblers you’ve sold through Appleton’s portal, you’ve also sold another 10,000 units to other customers as well.

After investigating, you discover that under certain circumstances the tumbler can indeed shatter unexpectedly.  In addition to filing a Section 15(b) report with the Consumer Products Safety Commission (CPSC)—a federal requirement when you learn that one of your items may present a substantial product hazard or unreasonable risk of serious injury—you send samples of the glass tumblers to a third party lab.   Their results indicate a manufacturing flaw—a weakness in the glass—and CPSC staff investigators come to the same conclusion.  The die is cast and within a few weeks you agree to initiate a voluntary product recall of all 12,500 tumblers that you sold.

Recalls are urgent, demanding and all-consuming of time and resources.  Within a tightly compressed timeframe, your team will need to complete a daunting list of complex and detail laden tasks.  In those tense first weeks you will need to make critical decisions at a frenetic pace.  Unless you’re recalling a rocket, none of it will be rocket science, but there is a lot to do and time will be of the essence.  Your company will be under intense pressure to design a comprehensive recall plan, get it approved by CPSC and implement the recall as soon as possible.  As CPSC tells it, the objectives of a recall are “to locate all defective product as quickly as possible, to remove defective products from the distribution chain and from the possession of consumers, and to communicate accurate and understanding information in a timely manner to the public about the product defect, the hazard and the corrective action.”  But accomplishing that and satisfying CPSC that your plan is aggressive enough to motivate consumers to act on the recall can be a challenge.  You will likely experience a nonstop whirlwind of conference calls, meetings and drafts as your team rushes to complete your recall agreement with CPSC, a reverse logistics plan, a joint press release, retail posters, a customer service script, FAQs for your websites, letters and notices to your distribution chain, collection and disposal procedures, launch plans, submission forms, a social media plan, and on and on.  How do you prepare for an urgent project like this?  What should a company do before any product hazard arises to be as well prepared as possible to implement a recall?

The answer can be boiled down to two words:  Prepare and practice.

First Steps

Prepare by learning the recall process, step by step.  CPSC publishes a Recall Handbook that lays out all the elements in plain English.  Study it carefully and plan for how you will handle each requirement.  Consider the information you would need to collect, evaluate and provide to CPSC.  Where is this information stored at your company?  What documents do you have? Who has access?  How easily could you accumulate everything you would need if you had an urgent need to do so?

Good Documentation Helps

If you don’t have a good system for storing all the quality, production and safety data related to your products, now would be a good time to consider one, before an urgent need arises.  It should consolidate access to all relevant production, quality, safety, sales and distribution documents for the products you manufacture, decorate, retail or distribute.  Typical items include sales orders, purchase orders, bills of material, technical files, test reports, risk assessments, inspection reports, customer complaints, return authorizations, warranty claims, corrective actions, and production issues.  The specific documents you will need may depend on your company’s role in the distribution chain – supplier or distributor, importer or retailer – but they are all similar in their purpose: to quickly understand how extensive the problem is, how many defective products you’ve distributed, where the defective products are, how you can identify them, why the problem occurred in the first place and so forth.

How efficient are your systems now?  Would you be able to easily identify which purchase orders or production runs involved the affected products?  Do the defective products have tracking labels, date codes, lot numbers or other distinguishing characteristics?  Could you identify the owners or recipients of these defective products?  Do you have shipping records for all the locations where you’ve shipped these products and production records for all the logos you’ve imprinted on the product?  These recordkeeping details might even be the key to negotiating the scope of the recall with the CPSC and limiting the recall to a smaller batch or lot.  CPSC will want you to be as specific as possible with each example of defective product and ideally have an image of each logoed version to help consumers identify whether the product they have is included in the recall.  You may even need to reach out to your clients to determine the specific dates and events at which the product was distributed to determine how you can reach that audience.

Who Will Manage?

Another consideration is your chain of command.  Who will be authorized to make decisions and approve agreements for your company?  Who will coordinate the recall and have overall management responsibility?  Which managers will be responsible for specific tasks?   Who will guide and advise these managers?  Who will be authorized to speak with customers, consumers and the media on your behalf?  What talking points will be used for those communications?  Will you use outside counsel to advise you in your communications and negotiations with CPSC regulators, in getting your recall plan written and approved, and in advising you throughout the recall?  If so—in my view, highly advisable—it is best to establish a relationship with an expert product safety attorney in advance so he or she understands your business and can respond to your situation immediately.  In the middle of a crisis is not the time to be vetting attorneys, comparing fees and waiting for law firms to conduct conflict checks.

Nothing is More Important than the Recall Agreement

One of the most critical milestones your team will need to accomplish is to successfully negotiate an agreement with CPSC staff over all the salient details of your recall:  How will consumers who have defective products be notified?   How soon and by what method?   Who distributed the product?  How will you notify those parties?  By when?  What will you offer to consumers who have defective products?  A replacement product?  A repair?   A refund?  Will the funds be escrowed?  How will you collect, account for and dispose of the defective products in coordination with CPSC?   All of this and more will be spelled out in your agreement with CPSC.  This agreement is the one item in particular where you would be well advised to work with a seasoned product safety attorney who has had many previous successes in negotiating these corrective action agreements with CPSC.  Its importance cannot be overstated.

By the time you actually announce the recall and put a well-designed plan into place, much of the heavy lifting will be done.  To be sure, there is still a great deal of work to do but it should largely be an operations and logistics issue at this point—work that your team is probably very good at already. Some companies choose to handle this “fulfillment” part of the recall with their own staff – collecting and disposing of the defective merchandise, processing refunds and claims forms, coordinating between all of the parties involved, reporting to CPSC – and some outsource the work to a recall management firm.  Either way, the important objective at this point is for your recall coordinator to make sure the trains run on time, that you do exactly what you told CPSC you would do, that every step is documented carefully and that you do it as quickly and expeditiously as possible.

What Went Wrong?  What Should You Do About It?

Once the crisis stage of the recall has passed, it is always prudent to conduct a post-mortem to determine what went wrong, who, if anyone, was at fault and what you should do better in the future to avoid similar defects.  Did you fail to test something thoroughly or fail to ask enough questions?  Did the manufacturer fail in some way or make a change without telling you?   Product safety experts have long advocated that the surest path to product safety is by designing defects out of products to begin with.   The more you understand about what went wrong with the defective product the better job you can do with future products.  The post-mortem is also the time to consider whether you may be able to recover some or all of your recall related costs.  Are you insured for any portion?  Do you have any indemnification agreements in place that may be applicable?  Should you consider litigation to recover your damages?  There are many such questions to ask at this point and you are wise to consider each one.

Product recalls can happen to any company of any size.  It doesn’t matter whether you are a supplier or distributor, whether you import directly or retail products that you buy from others.  Under the Consumer Products Safety Act, everyone who manufactures, distributes, or sells defective products can be held responsible. No company is immune no matter how expert its engineering or how vigilant its compliance.  If you need to be convinced, just type “BMW” or “Mercedes” and “Recall” into a Google search and see how many hits you get.  Do the same for the names Disney, McDonald’s, Fisher-Price, Lululemon, Nike, UnderArmour, Kellogg’s, General Mills, Schwinn, Cannondale – almost any respected brand you can think of – and you will discover recalls.  And so it could be with you.  But if you take steps in advance to prepare—even small steps—you can greatly diminish the pain and anguish a recall could cause your organization and you can reduce your costs significantly.  Keep in mind the two most important takeaways from this brief overview – prepare and practice – and they could make all the difference.

Recall Readiness Checklist

  • Plan For It.  Assume it will happen sooner or later.  Learn the recall process, step by step, and teach it to your key managers.  Go through CPSC’s Recall Handbook carefully and periodically review it with your management team.
  • Learn What The CPSC Requires.  Learn or review the Section 15(b) reporting requirements of the Consumer Products Safety Act.  Among other things, these well-establish consumer product safety rules require you to report to CPSC immediately whenever you learn of a substantial product hazard or a product that doesn’t meet a CPSC standard.  Late reporting can generate seven figure civil penalties.   While you’re at it, also learn about the Section 37 and Section 102 reports.  It’s all in CPSC’s Recall Handbook.
  • Centralize Incident Reporting.  To ensure you are aware of all incidents that could require a Section 15(b) report to CPSC, be sure to centralize the review of all customer complaints, product returns, defects, accidents, incidents and other leading indicators that may indicate a quality problem or a safety hazard.
  • Get The Product Back.  Whenever you receive a product-related complaint, claim or injury report, always ask for the product in question to be returned to you.  If the product is later deemed to be defective such that it leads to a recall, any batch, lot or tracking numbers on the product may help you limit the scope of the recall.
  • Distributor: You Report If Supplier Doesn’t.  What if you purchased the tumbler in this example through an industry supplier rather than importing it directly?   How would the scenario change?  When reporting the complaint and injury to the supplier you could request that the supplier immediately file the Section 15(b) report with CPSC.  If the supplier refuses or delays, you can file the Section 15(b) report as a “retailer or distributor report” and request that CPSC contact your supplier directly for more information.  Remember that under the Consumer Products Safety Act, everyone who manufactures, distributes, or sells defective products can be held responsible.
  • Notification Tools.  Study the material on CPSC’s website as examples of the posters, scripts, FAQs, social medial plans and other processes you’ll have to go through in a recall.
  • Get Documents In Order.  Review your systems for documenting and storing key product information you would need in a recall.  Be sure it is easily accessible.
  • Appoint Recall Coordinator.  Assign a manager to act as your recall coordinator.  Provide continuous training and stay abreast of best practices.
  • Line Up Outsider Experts.  Interview expert product safety lawyers about the role a lawyer would play in a real recall.  Establish a relationship in advance so you could move quickly in an actual recall.  Interview firms that provide recall management or consulting services to be aware of what’s available.  Speak to your insurance company about recall insurance.  Cover all the bases and decide what’s best for you based on your budget and risk tolerance.
  • Start At Product Development.  Review your product development and selection process to be sure you’re being as careful as you should in evaluating, testing and overseeing the production of the products you make or sell.   Perform a risk assessment for each product and consider what could go wrong.  Where applicable, enlist a third party lab to perform product integrity tests as well as use and abuse tests.
  • Put ID Marks On Your Products.  Mark your products whenever possible with lot, batch or tracking numbers that you can tie back to the production run.  If only a portion of your products have the defect these numbers may help you limit the scope of a future recall.
  • Use Mock Recalls For Training.  Periodically test your systems and management training by conducting a mock recall.

CPSC Recall Handbook:

This article also appears in the September 2013 issue of PPAI’s PPB Magazine.

What the Promotional Products Industry Can Learn from Williams-Sonoma

Staying Silent Can Cost You

In the Fall of 2002, Ann Brown, head of the U.S. Consumer Products Safety Commission (CPSC), proclaimed that San Francisco-based Williams-Sonoma was “leading the way on recall effectiveness” as she honored the company with her prestigious Chairman’s Commendation.  “Williams-Sonoma has demonstrated their commitment to consumer safety, by ensuring that customers were properly notified of a dangerous recalled product.”  Unfortunately for this upscale retailer, Ms. Brown is no longer at the Commission and it is not 2002.  This May, in a stunning reversal of fortune, CPSC has smacked Williams-Sonoma with a whopping $987,500 civil penalty for failure to timely report a product defect. Draconian as it seems, this stunning and eye-popping penalty may soon seem modest.  Well-informed sources predict it is only a precursor of much larger penalties in the works.  The message of the 2013 Commission is clear: Follow the letter of the law or be prepared to pay an astronomical penalty and then be compelled to follow the law with a costly CPSC-imposed mandatory compliance program.

So what can distributors and suppliers in the promotional industry learn from this case that they can use to protect their businesses?

Williams-Sonoma ran afoul of the critical Section 15(b) reporting requirements of the Consumer Product Safety Act.  Among other obligations, Section 15 requires manufacturers, importers, distributors and retailers of consumer products to notify the Commission immediately whenever the company has information that one of its products contains a defect which could create a substantial hazard or creates an unreasonable risk of serious injury or death.   Strategy #1: Assign a senior person in your company to learn the Section 15 reporting requirements.

Change a few details and the story of what happened to Williams-Sonoma could have happened to any company in our industry – promotional products suppliers who import product and distributors who sell it.  In this case, William-Sonoma did both.  In 2003 they began importing wooden hammock stands to sell through their Pottery Barn division.  From 2003–2008, Pottery Barn sold 30,000 units.  According to CPSC, when the hammock stand is used outdoors its metal brackets can trap moisture causing the wooden beams to rot over time behind the bracket and giving no outward sign until someone sits in the hammock and the beam breaks.   During this five-year span the company received 45 complaints of which 12 incidents required some medical attention.  The Commission claims that Williams-Sonoma knew by late 2006 – after it had received eight complaints – that the product had a defect which created a substantial product hazard, however Williams-Sonoma did not file a Section 15 report with CPSC until September 2008 – two years later!

If this case was typical, Williams-Sonoma most likely learned about the defective hammocks through a variety of customer interactions that may not have been passed on to one central repository.  Some customers might have placed warranty claims and only mentioned the bumps and bruises in passing.  Others might have come in to a store for a refund, written a letter, called an 800 number, complained via a Web contact form or even posted on CPSC’s new “Safer Products” site.  Whether a company is large or small, information – even bad news – can permanently reside in silos when the people receiving the information don’t appreciate its implication or aren’t aware of related incidents.  Without specific training and a robust initiative, employees in the field might receive a customer complaint—perhaps over the phone or in passing during an unrelated conversation—and dismiss it as insignificant, not their responsibility or not serious enough to report.   Teach your team that every product complaint is potentially significant.  Every complaint, claim, or incident report should be relayed to a central repository, logged and followed-up on thoroughly.  Be sure to have a trained individual call the consumer to discuss what happened and to make sure your incident report is accurate and that no details have been sugarcoated.  Ask for the product to be returned so you can see for yourself what went wrong and determine whether the issue constitutes a substantial product hazard.   Strategy #2: Educate employees to communicate every product related complaint to one person or department knowledgeable about Section 15 requirements, who has the authority to report to CPSC or to quickly raise the reporting issue to someone who does.  Investigate every incident thoroughly and get first-hand information about what happened whenever you can.  Ask for the product back to carefully evaluate what went wrong and whether further action is required. 

A common myth, and why some companies may not report, is the fear that Section 15 reports will automatically result in a costly “corrective action”, a term CPSC uses to refer to any remedial action taken by a firm, including recalls.  CPSC denies this myth in an FAQ on its website:  “Reporting a product to the Commission under section 15 of the CPSA does not mean that the Commission automatically will conclude that the product creates a substantial product hazard or that corrective action is necessary.”  Instead, CPSC contends that aside from helping the Commission to identify substantial product hazards that Congress established the Section 15 reporting requirements to encourage “widespread reporting…. to help identify risks that the Commission could address through voluntary or mandatory standards, or information and education.”   I posed this myth question to a prominent product safety attorney who regularly practices before the Commission.  He confirmed that many Section 15 reports result in no action and advised that companies should err on the side of “over-reporting.”   Indeed, the risks inherent in a Williams-Sonoma-sized civil penalty alone should inform any company’s consideration of whether or not to report.  Strategy #3: Err on the side of “over-reporting” when you learn of a product defect that could create a substantial hazard.  If the risk is not substantial, CPSC will not likely take action.  If the risk is substantial and you do not report, the potential civil penalties can be massive.  This Commission has already shown in the Williams-Sonoma and Kolcraft [1]matters that it will not hesitate to invoke stiff penalties for late reporting.

CPSC allows Section 15 reports to be filed through it’s website, by mail, or by telephone, and can be submitted by the reporting company or its attorney.  The most important thing is to file the report timely, however it is always advisable when dealing with regulatory agencies to do so with the advice of an experienced attorney who specializes in that area of the law.  Reporting companies should be prepared with the information that CPSC staff will need to evaluate the product hazard and determine if further action is required.   The more organized and complete a company’s records are, the easier time it will have responding to Commission staff queries.  The initial questions are what you would expect: What is the product?  Who is the manufacturer or importer?  Where is the product sold?  What is the defect, injury or risk?   How many units have been sold?  How many complaints or incidents involving the product have been reported?  Were there any injuries reported?  If the investigation continues beyond an initial stage, the information requested by CPSC can get much more detailed.  Strategy #4: Keep complete and accurate records about the products you sell.  This should include such product related items as sales and purchasing records, test reports, history of complaints, warranty claims, returns, and any other relevant information you may have.  The information should be stored in a database and easily searchable by the individual you empower to evaluate product defects and make Section 15 reports.

It is very easy – actually tempting – to read about someone else’s misfortune and assume for one reason or another that it can’t happen to you.  But if you sell consumer products – and our entire industry does – it can happen to you and maybe easier than you think.  Product defects that that have the potential to cause injury can happen to any company that makes or sells products.  Consider this: Williams-Sonoma has a long history of managing recalls – so much so that CPSC recognized its outstanding systems a decade ago.  Yet even with a compliance staff, a sophisticated database tracking system and a history of managing recalls effectively, a serious product defect fell through the cracks and cost the company dearly.  Take the time to evaluate your company’s system for evaluating products, for logging and monitoring complaints, returns and claims, and for determining whether any product related issue has the potential to create a product hazard substantial enough to warrant a Section 15 report.  Strategy #5: Just as you would monitor any other Key Performance Indicator, establish KPIs for monitoring your systems for tracking product related issues to ensure that no potential product hazard falls through the cracks to later become an albatross for your company.

[1] In March 2013, two months before the Williams-Sonoma civil penalty, Kolcraft Enterprises Inc. of Chicago agreed to pay a $400,000 civil penalty for failure to timely report defects involving faulty latches on the sides of several of the play yard products it manufactured for Carter’s, Sesame Street and others.  In both the Kolcraft and Williams-Sonoma Settlement Agreements CPSC imposed mandatory compliance programs.

This article appears in the August 2013 issue of PPB Magazine

CPSC Press Release – Williams Sonoma Civil Penalty and Links to Commissioner Statements

Settlement Agreement Between CPSC and Williams-Sonoma


Ten Ways to Protect Your Clients and Build Your Business

When you consult with your customers about their promotions or inquire of your suppliers about their products, do you ask questions about product safety and compliance?  For your customer – Who will the products be given to? Where will they be distributed?  For your supplier – What third-party tests have been performed for these products?  If you’re not asking basic questions like these, you’re missing valuable opportunities to distinguish yourself from your competitors.  More importantly, you could be putting your customers, your distributorship, your suppliers and even the industry at risk.  Yet, putting yourself in a position where you are confident enough to ask the right questions that will protect everyone in the supply chain is a cinch for promotional products professionals.  Here’s a list of ten guidelines that that every responsible member of the industry should master.

Learn the basic product safety laws and regulations that affect the promotional products industry.  The main one is CPSIA, an acronym for the Consumer Product Safety Improvement Act.  It’s the federal law that regulates children’s products and toys.  If one of your clients has a promotion that involves young children, you must understand how CPSIA applies and what you must verify with your supplier to ensure compliance.  There are other federal laws to consider as well, such as those that apply to industry products that come into contact with food, like water bottles, tumblers, coolers and lunch bags.  Together with hand sanitizer, sunglasses, and first aid kits, these promotional items are governed by U.S. Food and Drug Administration (FDA) regulations.  Certain states have regulations as well, such as California’s Proposition 65 and Illinois’ lead law.  There are industry resources to help you learn these basics – educational sessions at industry events and webinars through trade associations to name a few.  You don’t need to know all the technicalities of these laws but you do need to know enough to ask the right questions so you can make informed decisions.  A few hours of product safety training is a great start.

Know your products.  If you’re a supplier, you should know everything you can about each product in your line.  Importers and manufacturers should have technical drawings, a bill of materials (BOM) and performance requirements for each of their products.  These documents comprise the basis of quality control and compliance testing.  Suppliers should perform risk analyses and use and abuse testing when evaluating new products.  Are the products suitable for children?  What ages?  Distributors should ask related questions when selecting products from suppliers.  Has the product been tested by a third-party lab?  Which tests have been conducted?  Does it comply with each state’s safety laws?  What age is it designed for?  Is it a child’s toy?  The more we know about the products we sell the better job we do to protect our clients.

Know your suppliers.  How much do you really know about each of your suppliers?  You can learn a lot from a catalog and website but marketing materials don’t tell you the extent of what goes on behind the scenes.  Does the supplier have a knowledgeable head of compliance?  How does the supplier evaluate new products and vet its factories?  What third-party tests does the supplier commission, how often and for which products?  Does the supplier have an XRF instrument to test products in-house?  What about ink testing?  Are some or all of the supplier’s products compliant as children’s products?  What is the supplier’s policy on Prop 65 compliance?  How will you be indemnified?  These are only examples of the kinds of questions you should be asking each of your suppliers in addition to visiting their headquarters and seeing their operations first hand.

Know your clients.  Each of your clients is unique.  Learn about their differences so you can meet their specific requirements and expectations.  Some companies have testing requirements that exceed applicable regulations.  Others have written social accountability policies for any factory producing a product with their logo.  Companies differ in risk tolerance and rely on you to guide them.  Case in point:  Federal law permits general use products to be sold for use by young children even if the products are not tested, not certified, and even if they contain more lead than allowed for children’s products.  But how would your client feel about handing out a product to children that doesn’t meet children’s product standards?  The more you know about each client’s policies and expectations, the better job you can do to meet their individual needs.

Know the intended audience. When you speak to a client about a promotion, always ask about the target audience – who the products are intended for – and the U.S. states where the products will be distributed.  If the target audience includes children, this should influence your product selection.  Children’s products and toys must meet stringent lead and phthalate requirements, be certified by a third-party lab and carry permanent tracking labels.  Certain U.S. states have additional requirements.  Illinois, for example, has a lead law that exceeds the federal standard.  A best practice for distributors is to highlight on purchase orders to suppliers whether the products are for children and where the products will be distributed.  This will help your supplier verify that your products will be compliant with all applicable regulations.

Know the risks.  Risk is inherent in all that we do whether we are trying a restaurant for the first time, taking advantage of a bargain price, or selecting products blindly from a catalog.  In the promotional products industry, there are product safety risks (will the product hurt anyone), regulatory compliance risks (does the product comply with applicable laws and safety standards), and social accountability risks (could the manufacturing of the product embarrass your client), among others.  No matter what you do, no matter how careful you are, no one can eliminate risk entirely.  Even the most prestigious brands have product failures, recalls and production gaffes.  But you can mitigate risk to a great degree by being aware of risks and making appropriate product and supplier decisions.  Your clients put their most valuable asset in your care—their name and logo—­when they entrust you to select the products that will bear that name.  Treat this responsibility with the care and diligence it deserves.  Brand protection is one of your most sacred responsibilities.

Educate the team.  For most distributors and suppliers, servicing major customers requires a well-organized team effort.  Unless everyone on the team is on the same page, it isn’t likely that you will deliver consistent service, let alone excel.  The same principal applies to product safety and compliance.  The quality of your safety and compliance initiatives will only be as strong as the weakest link.  Take the time to educate everyone on your team in the basics of responsible sourcing.

Stay current.  Even though the Consumer Products Safety Improvement Act (CPSIA) became effective in August 2008, many of its provisions were phased in gradually and some became progressively more stringent.  At first, third party testing was not required and later it became mandatory.  Originally 600 parts per million (ppm) was the maximum lead allowed in children’s products, then 300 ppm and now 100 ppm.  In addition to phase in rules, the U.S. Consumer Products Safety Commission (CPSC) continually develops new rules that either modify existing regulations or introduce new ones altogether.  For example, CPSC is currently developing a rulemaking to establish a new federal standard for small, powerful magnet sets which have been sold in the promotional industry as puzzles, sculptures and stress relievers.  To help stay current about CPSC changes, go to and sign up for email alerts about rule changes, recalls and other product safety news.  And, in addition to CPSC, there are other federal and state laws to stay abreast of.  For updated news on the entire range of product safety regulation affecting the industry, trade associations and testing labs can be great sources of information.

Instill a Product Safety Culture.  Imagine that one day you decide to start eating nothing but 100% organically grown food.  Think of the challenges you would have at least three times a day for the rest of your life.  What are you going to eat?  Where are you going to buy your food?  Where does that food come from?  How is it grown?  How can you be sure?  Solve that problem for breakfast today and it starts over again at lunch.  Whatever you might have done yesterday to ensure your food supply when you were in Chicago won’t help you at all tomorrow when you’re off to New York.  For you to be successful in this new eating habit, planning in advance for the organic food you are going to eat each day and where you are going to obtain it reliably will have to become second nature, as if it were embedded in your DNA.  And so it is with product safety and compliance.  The kinds of food and ingredient questions you would have to ask every day if you drastically changed your eating habits are the same kinds of questions you should be asking every day to ensure safe and compliant product.  What’s in this product?  Who is going to use it?  Where will it be distributed?  How carefully was it made?  What was it tested for?  Was this shipment tested?  How can I be sure?  Ensuring safe and compliant product is a daily journey, not a destination.  Just like my food example, it requires continuous vigilance and attention, order by order, promotion by promotion.

The more that product safety and compliance becomes second nature and an automatic consideration no matter what client or promotion you’re working on, the more you’ll protect your clients, protect your business and ultimately protect the industry, a responsibility we all have to each other.

This article is scheduled for the October 2013 issue of Wearables Magazine

For Promotional Product Sales, Protect Your Client’s Brand

Whether you are selling to a global brand like Nike or to your local YMCA, no single asset is more valuable to your client than the client’s good name.   Sell them a promotional product that enhances their brand and you’re likely to have a happy customer for a long time.  Sell a product that embarrasses the brand and the cost for everyone involved could be astronomical.

Consider a case involving the Winn Dixie and Publix grocery chains.  In November 2010 investigative reporters from the Tampa Tribune purchased about two dozen reusable grocery bags and sent them to a lab to test whether or not the bags contained lead and other toxic metals.  Some of the bags tested high for lead so the newspaper featured the story in its Sunday edition that week.  Instantly the story went viral on the Internet and became the headline story on news broadcasts nationwide all weekend.  The lead discovered in these bags was relatively low – less than 200 parts per million – and product safety lawyers struggled to find any regulation that had been violated, but none of that mattered.  The story alone was damage enough.  By Monday morning, Senator Charles Schumer of New York was on the floor of the U.S. Senate demanding that the FDA ban all reusable grocery bags containing lead.  “When our families go to the grocery store looking for safe and healthy foods to feed their kids, the last thing they should have to worry about are toxic bags,” said Schumer.   Both grocery chains, and eventually several others, announced nationwide recalls.  Aside from the millions of dollars in recall costs, damage to the reputation of these brands was enormous.  For these grocery chains, all of their efforts to reinforce a “you can trust us” message was undone in one weekend.

The reusable grocery bag story is significant but not unusual.  For better or for worse, ever since the millions of Chinese-made Barbie dolls were recalled for lead paint violations in what has become known as the Summer of Recalls – August 2007 – the promotional products industry has had to deal with a new reality – the world of product safety, regulatory compliance and responsible sourcing.

So how do you embrace this new reality?  Where do you get started and how do you make it part of your culture?

The first and most important step is education.  Learn the basic product safety regulations and how they apply in our industry.  The most comprehensive federal law is the Consumer Product Safety Improvement Act (CPSIA).  It was enacted in August 2008 and imposes strict lead limits for all children’s products and additional requirements for toys.  Much has been written about how to determine whether the product you’re selling is regarded as a children’s product.  The distinction is not always a bright line and even experts sometimes disagree.  Why does it matter?  In addition to the lead restrictions, children’s products require third party testing, permanent tracking labels and certificates specifying when and where the product was manufactured and tested.  For everyone’s sake – your client, your company and the industry – I recommend a simple rule of thumb:  If the intended audience of a promotion includes children, protect everyone involved.  Don’t let yourself get sucked into a debate of whether the item is a children’s product or a general use product.  For these promotions play it safe and select products that have been produced and tested to CPSIA children’s product standards.

One difficult challenge for the promotional products industry is that many products become children’s products only after they are decorated.  Most blank water bottles, for example, are considered “general use” and not subject to CPSIA.  But if a water bottle is imprinted with a juvenile logo – such as a Winnie-the-Pooh type of character that appeals primarily to young children – it is transformed into a children’s product and becomes subject to the entire suite of children’s product rules.  The same applies to string backpacks and a host of other similar products.  Some suppliers will note on their websites the “child-friendly” products for which they have third-party testing.  Other suppliers have CPSIA test reports for all of their products.  Speak to your suppliers to learn each one’s protocol for children’s products.  Complying with the law is a partnership and requires open communication between distributor and supplier.  You should know which of your supplier’s blank products are “children’s product” compliant just as your supplier should be told when the intended audience for your promotion includes children.  To learn if the intended audience includes children make this a standard question you ask your clients for every order.  In addition to obtaining the information you need to comply with the law, it’s an opportunity to demonstrate to your client your concern for their protection and your knowledge of the law.  In communicating this information to your suppliers, make it your standard practice to note it on applicable purchase orders in bold letters:  The products in this order are intended for an audience that includes children 12 years of age or younger and must comply with all provisions of CPSIA!

Speaking of promotional products suppliers, with product safety and regulatory compliance in mind you should vet each of your suppliers carefully and perhaps through a different lens than you have before.  Does the supplier have a compliance department?  Is there a senior compliance officer who can explain to you how the compliance process works at each of the suppliers’ factories and at their headquarters?  Does the supplier have any quality or product safety certifications?  Do they have inspection records and third-party audits to back up what they’re saying?   Is a risk assessment done on their products before each one is added to the line?   What third- party tests are conducted and how often?  How do you obtain the current test report for each product?  Do the test reports include photographs specific to the supplier’s products or are they generic reports for similar products made by the same factory?  Does the report include all the required tests to comply with U.S. regulations or is the report referring to European standards?   All of these are important questions that you or someone in your organization should know the answers to before doing business with any supplier.

Where can you get this education if you’re new to product safety?   One great resource is the Promotional Products Association International (PPAI).  PPAI frequently offers product safety classes and has an extensive library of on-demand product safety webinars.  It also publishes numerous best practices documents that can help jumpstart your compliance initiative.  PPAI even has an online tool called Turbo Test that walks you through a series of questions to help you determine the compliance requirements for most promotional products.  Testing labs such as UL-STR and Anseco are another resource for product safety and compliance training.  Most labs provide webinars on a variety of product safety and compliance topics and provide consulting services on a product-by-product basis as well.

Like any topic you’ve ever studied, product safety for the promotional industry will take some time to learn.  But if you make the investment in time, you can be certain that it will pay handsome dividends for your career.  When you learn to ask the questions that make it obvious to your client you are just as committed to protecting their name as to making a sale – that you are acting as a fiduciary for their brand – you will enjoy a different relationship than before.  Instead of being regarded as the promotional products sales rep, you will become a valued and trusted advisor to the client, the highest mark of respect you can earn.



NOTE:  This article by Rick Brenner originally appeared in the February 2013 issue of Print + Promo Magazine.

CPSC General Counsel Clarifies Distributor Responsibilities for Children’s Apparel

Ever since the early years of our industry there aren’t many promotional products distributors who would describe themselves as manufacturers.  But under the Consumer Product Safety Improvement Act (CPSIA), the majority of promotional products distributors –at least those who buy blank apparel from a wholesaler and then send it out to have it decorated—are just that, manufacturers in the eyes of the law.  Now for the first time, as a follow-up to questions posed at PPAI’s Product Safety Summit this past August in New Orleans, the General Counsel of the U.S. Consumer Products Safety Commission (CPSC) has put in writing exactly how the senior staff at the Commission regards the responsibilities of distributors who decorate.  This written guidance doesn’t change anything from the Commission’s perspective but it might surprise many distributors to learn of the extent of their responsibilities under the law.

The issue we’re discussing is related to children’s apparel – tee shirts, baseball uniforms or sweat shirts, among others – and the amount of lead that might become part of these garments through the inks or other surface coating materials that are used in the decoration process.  Current law limits this lead content to no more than 90 parts per million (ppm) for any “articles intended for use by children.”

So how does a distributor become a manufacturer when they don’t manufacture the garment?   According to discussions with the Commission, the original manufacturer of the garment is responsible for compliance of the garment as they sell it, whether blank or decorated.  If it is a children’s product – often obvious with apparel because of children’s sizes – the garment manufacturer must comply with all the provisions of CPSIA for lead in the substrate of the product (100 ppm) and lead in any paint or surface coating (90 ppm).  This manufacturer must include a permanent tracking label on the garment as well.

But according to a 2009 meeting between PPAI and CPSC, the Commission has made clear that if a promotional products distributor buys a blank and compliant garment and then performs an operation that transforms the garment in any way before the garment is sold to the end buyer, then that distributor is responsible as a manufacturer for whatever “transforming” operation it may have performed itself or contracted to have done – such as tie-dyeing, stain proofing, embroidering, adding a press-on applique or simply silk screening the garment.  The distributor’s “manufacturer” responsibilities include obtaining a test from a CPSC approved third party laboratory confirming the lead content of the surface coating and applying a permanent tracking label to the garment to cover the decoration.  This tracking label is in addition to any tracking label that may have been applied by the blank garment manufacturer such as Gildan, Hanes or Champion.

Some promotional products distributors have wondered why they should be held responsible for ink applied by their decorator.   We posed this question to Ms. Falvey who explained that the responsible party depends on how the transaction is structured between the distributor and the decorator.  If a decorator buys a blank garment from an apparel wholesaler, decorates it and then sells the final decorated product to a distributor, then the decorator is responsible as the manufacturer.   But if a distributor buys a blank garment from an apparel wholesaler and then sends it to a decorator to be personalized, the distributor is the manufacturer.  The decorator in the latter case is simply a subcontractor to the distributor.

So what is the new guidance that Ms. Falvey has written to help distributor “manufacturers” understand their obligations under CPSIA?  It has to do with third party testing and the extent of the distributors’ responsibility to verify that their decorator is using compliant ink.   A question was posed to Ms. Falvey as to whether or not a distributor could rely on a decorator’s certification that their inks were compliant without having to personally test the inks or the finished garments, as long as the decorator indicated that the inks were tested once per year.

Ms. Falvey writes: “The short answer to that question is yes. The certificate from the imprinter (or firm applying the ink) can cover multiple batches or lots of production.  The only caveat is that the firm selling the imprinted item (distributor) must have exercised an appropriate level of due care to ensure that the ink being used by the imprinter is the same that is covered in the certificate such that each additional batch or lot of production will continue to comply with all applicable children’s product safety rules.”

For promotional products distributors, the CPSC guidance is a bit of a good news/bad news scenario.  The good news is that distributors can rely on a decorator’s certification without having to test every garment order at a third party lab.  The bad news is that the Commission has set a very high bar of responsibility for the distributor to independently verify that the inks that the decorator is using for every order are the same as what is covered by the certificate and that each additional batch is compliant as well.   Each distributor will have to determine how to fulfill these responsibilities but it is clear that the distributor will have to go far beyond keeping a current certificate on file.  If a recall or non-compliant garment issue arises, Ms. Falvey’s letter makes clear that the distributor will need to prove to the Commission that it exercised “an appropriate level of due care.”

From a common sense perspective, a distributor could and should visit their decorators periodically, learn about their ink procurement and testing procedures, review their third-party test documentation and do whatever they would normally do if they had their own factory or decorating operation to ensure that the operation is compliant.   If a distributor does not want to do this, or doesn’t have the expertise, he or she should discuss with their legal counsel whether or not it is worth the risk to continue to be responsible for decorating children’s apparel.   There is already one case in the past few months of a John Deere tee shirt recall in Canada for high lead in the decoration.  Recalls are very expensive not to speak of other costs and penalties possible under CPSIA.  In addition, ink is only one of the materials that may need to be tested.  If the decoration involves an applique, the glue and other material in the applique must also be third party tested as it all constitutes a surface coating.

Another strategy is for distributors to continue to sell children’s apparel but to purchase it as a finished product from a compliant apparel decorator.  Distributors would still want to exercise due diligence that the decorator is compliant – just as they would in purchasing children’s products from any supplier – but they wouldn’t have the manufacturer’s responsibility under CPSIA for testing and tracking labels.

Finally, as with all regulatory matters, in addition to the practical and common sense aspects, the matters discussed in Ms. Falvey’s letter are legal issues and I am not a lawyer.  Nothing that I have written in this or any other article should be construed as legal advice.  All industry participants – suppliers and distributors – would be well served by consulting with a product safety attorney who regularly practices before the Consumer Product Safety Commission and is an expert in CPSIA matters.

Falvey Letter Re Decorating and Tracking Labels

Updated Toy Safety Standard takes Effect June 12. New Tests Required!

If you import children’s toys, or if you’re a promotional products supplier with children’s toys in your line, effective tomorrow you’ll need to comply with an update to the mandatory Federal Toy Safety Standard.  Among other changes, this revision (ASTM F963-11) adds limits for the soluble amount of eight metals (antimony, arsenic, lead, barium, cadmium, chromium, mercury, and selenium) permitted in toy substrates.  The change is effective for toys manufactured or imported after June 12, 2012 for children 14 years of age or younger.

The ASTM F963 Toy Safety Standard used to be voluntary.  But in 2008, the Consumer Product Safety Improvement Act (CPSIA) made ASTM F963 a mandatory standard.   At that time, the current version of the Toy Safety Standard was F963‑07 with the “07” signifying the year that the latest revision was adopted.  Since then, CPSC has voted to adopt two newer revisions – one issued in 2008 and the latest in December 2011.  In February 2012, the Commission announced in the Federal Register its decision to adopt ASTM F963-11 effective as of June 12, 2012.

For the moment, the law requires you to comply with every provision of the new standard – including the 2011 changes – but doesn’t require you to use a CPSC certified third-party lab to test for the 2011 changes.  The reason is that the Commission has not yet voted to adopt recently proposed rules for third party laboratories which it published in the Federal Register on May 24, 2012.  Comments on these proposed rules are not due until August 7, 2012.

If you have another reliable way to verify compliance for the F963-11 changes—perhaps by testing with an XRF instrument—you could avoid, until CPSC adopts the new rules, the cost of testing the 2011 updates at a third-party lab.  However, this waiver only applies to the F963-11 changes.  You’ll still need a test from a CPSC certified third-party laboratory for the portions of ASTM F963-11 that are “functionally equivalent” to F963-08.

The risk of third-party testing now for the new requirements of F963-11 is that when the proposed rules are finally adopted by CPSC, the lab you choose may not be accredited for the new requirements and you will have to retest at an approved lab.  In my opinion, this is a very minor risk compared to the risk of not having an independent test confirming that your toy complies with the new requirements.

CPSC addressed this in an FAQ on its website:

In the event that a manufacturer or importer wishes to have its products tested now – in the hope that testing to the -11 version eventually will be accepted by the CPSC – that manufacturer or importer should check with its current CPSC-accepted laboratory to see if they will be applying to the CPSC for acceptance of the -11 version. If so, and if the lab satisfies other conditions spelled out in the draft document, then the Commission likely will accept that testing upon its approval of the new Notice of Requirements. (This is not a guarantee of the Commission’s action, but the Commission traditionally has permitted acceptance of such testing, provided that all the other conditions are satisfied.)

It’s always a treacherous scenario in our industry when the law requires strict compliance with a set of standards but doesn’t require third-party testing.  For one thing, it places an extra burden on distributors – to verify that the toys they’re purchasing are compliant with the new standard if the supplier or factory does not have a third party lab report verifying compliance.

My advice is to not buy any toy that is imported or manufactured after June 12, 2012 unless you get a report from well-known third-party laboratory verifying compliance with all the provisions of ASTM F963-11.

For promotional products distributors who maintain test reports in their files of children’s toys they order frequently, or for those who have children’s toys in company stores or in other co-op programs, be sure to go back to your supplier for an updated test report.

The full text of the FAQ from the CPSC website can be found at