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 SaferProducts.gov 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 http://www.cpsc.gov 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

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 http://www.cpsc.gov/info/toysafety/plain.html

Would You Risk a $10,000 Order to Raise Product Safety Questions?

You get a call one morning from a marketing manager referred to you by one of your customers.  She desperately needs 7,500 tote bags for an event the following week and wants to know if you can deliver.  You do some quick math and realize you could be talking about an order approaching $10,000.  Now what questions are you going to ask?

Of course you’re going to ask about budget, about the particular bag and imprint she has in mind, and where the bags are to be shipped, but are you willing to raise the product safety and compliance questions?  Could there be a regulatory issue involved?   Who is the intended audience for the product?  Will children be recipients?  What does the art look like?  Is it a juvenile imprint?   Will the bags be distributed in California?  Does the end-buyer company have any policies regarding lead, phthalates, or cadmium in the bag or the imprint?

With a plum order in hand—especially a $10,000 order—even veteran distributors might shy away from questions like these if the client hasn’t mentioned the issue first.

The same dilemma exists for suppliers.  You receive a quote request for 2,500 custom-shaped flashlights and the client doesn’t provide many details. What testing are you going to include?  If the flashlights are for a boy scout jamboree you have different considerations than if the flashlights are for a Mr. Goodwrench promotion.  What should you build into your quote for testing and what specifications will you require of your factory when you ask for a quote?  Every lab test you include and every product safety specification you require of your factory is likely to increase your cost.   If you specify that the material must be lead or cadmium free, or that the inks must be phthalate free, there will likely be an associated cost that your competitor might not be including.  These are difficult questions, particularly when you are quoting blindly without knowing the whole story.

Let’s frame the discussion between mandatory standards – what’s required by law – and voluntary standards – what may be required by your customer’s own policies, by market pressure or by some other non-legal reason.

The word “mandatory” should guide you when it comes to asking questions.  In both of the examples – the tote bags and the flashlight – if the final decorated product is determined to be a children’s product and it doesn’t comply with applicable regulations, then you could be risking an expensive recall and a public embarrassment.  Best practice is to learn the mandatory compliance regulations for products in our industry and then ask enough questions of your customer to enable you to quote properly – to know what to ask of your testing lab and what to require of your supplier or factory.  As the law is currently written and enforced, ignorance of the intended audience does not appear to be a defense.  You will not likely get much sympathy from CPSC by saying, “I didn’t know it was a children’s product and I didn’t know they were going to hand it out to kids.”  It could be a very expensive discussion.

Voluntary standards are a different matter.  McDonald’s recalled millions of Shrek glasses because of cadmium in the decoration even though there was no mandatory regulation that applied.  A few years ago, when the Today Show created a frenzy about the chemical BPA in polycarbonate bottles, hundreds of corporations stopped buying them. Yet BPA is still perfectly legal, even today.  Many corporations have policies about toxins like these that go beyond regulation.  Some, like Nintendo, borrow standards from ASTM F963 – the toy safety standard – and apply those requirements to products that are not toys.  The Consumer Product Safety Improvement Act (CPSIA) bans children’s toys if any of six phthalates measure more than .1% but Nintendo applies this standard to every promotional product it purchases, not just children’s toys.  Other companies require the fabric in products like tote bags and string backpacks to comply with the Flammable Fabrics Act even though that law applies primarily to apparel and not to tote bags or string backpacks.

So what is the best practice when it comes to quoting?  While each distributor or supplier needs to consider his or her own situation, here are some things to take into consideration:

Since mandatory standards are not optional, you have to deal with them no matter what.   If you are knowledgeable about the law, you may be able to make a determination from the product or an image and not have to query the client about the intended audience.  While this approach has risk for borderline products, there are hundreds of products in the industry that are obviously not toys or children’s products.  As a general rule, however, it is safer to evaluate the art and ask the client who the intended audience is before quoting.  Then you can determine the required standards and build them into your price – material specification and testing.

There are those who would argue that including product testing in a quote may make your product appear more expensive than competitive quotes that do not include testing.  To me, that’s a sales issue, not a pricing issue.  At a minimum, your quote and presentation should highlight the mandatory regulations that apply to the product and indicate the amount you have included for third party testing.  Your salesmanship should enable the client to appreciate your understanding of compliance and that you are protecting her and her company.  It seems more professional to me to openly provide the distributor or end-buyer all the facts she will need to approve the sale.   Once a price has been approved, it puts everyone in a difficult position if you to go back and say, “We need to add $1,000 for mandatory testing.”  These are hard conversations that sometimes do not have happy endings.

What about voluntary tests – the ones that aren’t required by law?   You might be tempted to disregard them as unnecessary costs that could price you out of a sale, but that would be too simplistic an approach and not necessarily in your best interest or your customer’s.   Because of the odd nuances of CPSIA, there are numerous products that can be distributed to young children that are not considered “children’s products” and therefore not subject to mandatory testing requirements.  These products are considered by CPSC to be “general use products” for children of all ages, not the “primarily 12 years of age or younger” crowd covered by CPSIA.  But if you sell a general use product for seven year olds, isn’t it likely that your client will expect it to be tested to children’s product standards?  And won’t you be embarrassed if the client calls you one day to say that he just found out that one of these products was chock full of lead?  Do you think the client will be sympathetic if you explain that product didn’t fit the technical definition of a children’s product so you decided not to test it?  Not likely, especially if some news outlet is asking for a statement about why her company is distributing lead-filled products to kids.

So just because a test is voluntary doesn’t mean you shouldn’t think about it.   Some may want executive toys to comply with ASTM F963, the toy safety standard, even if they’re not children’s toys.  Or they may want the imprint or transfer to comply with the CPSIA phthalate standard.  My suggestion for a best practice is to list on your quote each voluntary test your client may want to consider and provide a place for the client to check off yes or no for each test.   If the client checks off “no” for every voluntary test, then there could be no embarrassing phone call later.  You would be covered.

Product safety and regulatory compliance has transformed the competitive landscape in the promotional products industry.  While the rules can seem daunting at first, they provide an outstanding opportunity for promotional products professionals to distinguish themselves as trusted advisors.  Dealing with product regulation and testing in a quote document is one such golden opportunity for those who choose to embrace it.

Compliance is Not Enough for Safe Promotional Products

If attendance at ICPHSO’s 2012 Annual Meeting and Training Symposium is any indication, then the promotional products industry should feel proud of the strides it is making in product safety awareness.  From scant industry attendance just four years ago, this year’s symposium, held earlier this month in Orlando, had strong participation by PPAI, by QCA, and by at least a dozen major promotional products suppliers and distributors.  But while progress is encouraging, the workshops at ICPHSO made clear that product safety is much more than test reports and CPSIA compliance.

ICPHSO is an acronym for the International Consumer Product Health and Safety Organization.  It is the preeminent International product safety organization and is comprised of accomplished compliance professionals from all over the world – manufacturers, retailers, government regulators, attorneys, testing labs, standards developers, academia and consumer advocates.  Chances are, if you’re selling promotional products to a major corporation, its product safety team participates in ICPHSO.  More than 600 attendees made the pilgrimage to Orlando this year to share their knowledge, to learn from their peers, to network with like-minded colleagues and to mingle with government regulators from countries around the globe.

This year’s major topic was manufacturing and the challenges of producing safe and compliant products consistently in factories all over the world.  Traceability and supply chain transparency was a common theme in several presentations.  It was comforting to hear that even the largest companies struggle with this issue just as many importers do in our industry.  Jennifer Weaver, Director of Quality Assurance at Under Armour, noted that while she closely supervises Under Armour’s factories, her company does not even attempt to trace production from suppliers of items such as buttons, zippers and seams.  The consensus seemed to be that each manufacturer/importer must develop a plan based on a risk assessment of its own particular products.

While most product safety initiatives in the promotional industry are focused on compliance – CPSIA, FDA, Prop 65 and similar regulations – ICPHSO has always taken a deeper approach to consumer product safety.  Several experts spoke of the importance of avoiding product related injuries by building in safety from the beginning – by designing out safety defects at the product development stage and by considering the foreseeable abuse and misuse of a product as well as its intended use.   Another important topic focused on the importance of recall preparedness – having a well-practiced plan in place for the inevitable situations where unsafe products are discovered after a product goes to market.  Time is always of the essence in such cases, including the obligation to report to CPSC.  One of the most impressive presentations of the week was by Jennifer Thompson of Costco who explained the sophistication, speed and effectiveness with which Costco implements recalls and notifies customers who have purchased recalled products.

So while we should be proud as an industry of the product safety strides we are making – through PPAI’s Product Responsibility Action Group (PRAG), through QCA, and through individual company initiatives – the ICPHSO presentations illustrate how product safety has to become part of the culture of all industry participants if we’re truly to protect our industry.  For example, how many promotional products are imported without a formal risk assessment or without evaluation for product safety hazards?  In some cases these tests can seem unaffordable but the risk of not testing can be even more expensive.  A few years ago our product development team was considering a spa kit for our line – one that contained a variety of aloe-type skin creams and lotions.  The kit would have sold for less than $10.  In performing our risk assessment we asked a well-known cosmetics lab to verify that the lotions were of the quality that the Asian factory contended and that they did not contain any harmful ingredients or toxins.  The lab quoted $28,000 for the tests.  This may be a normal cost for a major cosmetics company but for most of our industry it isn’t a reasonable value proposition, particularly when the supplier has no idea if the product will even sell.  Accordingly, we did not add the spa kit to our line.  Now this week, in an unrelated case, the FDA has issued a dire warning about dangerous levels of poisonous mercury found in a variety of imported skin creams and antiseptic soaps or lotions found in at least seven states.  Just imagine how this could have impacted our industry if these poisonous lotions had been purchased through a promotional products distributor and given away in a spa kit by a major corporation.

So given the practical and realistic resources of most companies in the promotional products industry what can importers do to ensure that the products we are selling are not only compliant but also truly safe?  Here is a good starting list:

1)     Appoint someone in your company as product safety lead.  Send that person to product safety training such as a class offered by a major testing lab or the Certificate in Product Safety Management program offered by Saint Louis University.   Your designee should develop and implement a risk assessment process, maintain your product safety documentation and act as the point person if your company is ever involved in a recall.  Once these basic processes are in place, take the initiative to the next level.  Develop a comprehensive quality manual for all of your supply chain standard operating procedures and also develop a recall preparedness plan.

2)     As a supplier, manufacturer or importer, perform a basic risk assessment before adding any product to your line or before ordering it for your customer.  Even without independent testing, much can be done to minimize risk and promote safety.  Evaluate how well the product is constructed, the quality of materials, whether it will shatter when dropped, if it has sharp edges, choke or bite hazards as well as other foreseeable risks. Obtain a bill of materials for the product and identify any potentially hazardous materials or components.  Subject the product to reasonable use and abuse testing even if you have to test it yourself and be sure to consider the foreseeable misuse of the product, particularly by children.

3)     Test the product to simulate how well it performs.  If it is a bag, for example, how much weight will it bear reliably before the fabric, seams or straps give way.   Are there embellishments like buttons, grommets, labels, labels or hooks?  If so, how securely are they fastened?  If they break off will any sharp edges remain?  Is there any chrome or electroplating?  Is the quality high enough that it won’t peel or curl leaving knife like edges?

4)     Investigate whether the product, its components or its packaging is subject to any state or Federal regulation.   In addition to CPSC regulation, many promotional products are also regulated by the FDA, including hand sanitizer, first aid kits, sunglasses and food contact materials such as drinkware.  If the product is regulated be sure you have current (within a year) third party tests showing that the product complies with all of the regulatory requirements of current law.

5)     Consider identifying products in your line that contain toxins.  BPA, lead, phthalates and cadmium have all come under scrutiny by Congress, by CPSC, and by FDA but are still allowed by law for most products.  Some of your customers or your customer’s customer may have policies against purchasing products containing these substances.  An alternate idea is to identify the products in your line that are lead free, phthalate free, cadmium free and BPA free and note this in your catalog, advertisements and on your web site.

6)     Determine if any special labeling is required to warn against any hazards, to note any stress limits and to identify the appropriate age for the product.

This is certainly not a comprehensive list but it’s a good start and would go a long way to raising the bar for product safety in the promotional products industry. In the months ahead, PRAG will be working towards proposing a similar suite of “best practices” for product safety that all industry participants can rally around.  The more that all of us do to promote product safety – compliant products and safe products – the more we do to protect our clients and our livelihood.

(To learn more about ICPHSO and its programs, visit www.ICPHSO.org)

Time to Take a Closer Look at the Test Reports in Your Files

With the deadline for mandatory third party lead testing less than two months away, now would be a very good time to take a closer look at the third-party test reports in your files. There’s a good chance that upon closer inspection you might find that for certain products the reports you’re relying on for compliance might not be very reliable.

In the Consumer Products Safety Improvement Act (CPSIA), Congress mandated that an accredited third party laboratory must test children’s products before they can be distributed in commerce. Testing for lead in paint or surface coating has been required since December of 2008. Testing for lead in substrate will take effect on January 1, 2012.

So what are the reliability concerns I’m raising?

While some question the accuracy of the tests – by showing inconsistent results from one lab to the next—that isn’t the issue I see. My concern is more serious—that some of the test reports you receive may not even be for the same product that you’re selling. In those cases, the reports are not reliable and provide a false sense of security to you and to your customers.

Here’s one way that happens:  Instead of ordering tests for their own products, U.S. importers often turn to their overseas factories for testing. But some of these factories—particularly ones that supply similar versions of their products to multiple customers in the US—may try to mitigate the cost by testing only a small subset of their products—sometimes only one SKU out of a varied line of products. Instead of testing the actual products as produced for each of their customers, they send a generic version of their product to a lab and then they give these test results to every customer who requests a test report. I’ve seen tests like this more times than I can count.

So what’s the problem with this practice?

Well, there’s no problem with a U.S. importer having their overseas factory order the testing from an accredited lab as long as the tested version of the product is exactly the same in all material respects as the product they’re selling—same item, same finish, same color, same trim, same design, same paint and substrate materials, same raw material supplier, and the same factory. But that’s often not the case.

The more common scenario is that the generic version is similar but different from your product. It might be a different material or color, have different trim details or include additional features from the generic version.  Any of these differences requires a separate third party test.

Another possibility is that the report you have is for a completely different product from yours. Overseas factories don’t always test every product they produce.  I’ve seen cases where a factory will respond to a test request by sending any report they have in their files.  Unless the US firm receiving the report is trained in what to look for, these reports are often accepted as is and passed along to customers.

So how can you tell if your report is really for your product?

  1. Is the product named in the report exactly the same way as it is listed on the web or in the catalog where you found it?  If your product is a Bonzo HT-341 in midnight blue, does the test report say Bonzo HT-341 in midnight blue?  Be wary of reports with generic product descriptions like “Plastic Bottle” or “Tote Bag” and few product details.
  2. Does the test report include a picture of the product?  Is the picture exactly the same as your product and does it include your color?  The best test reports include detailed photographs of the actual products tested.
  3. Look for the name of the company who ordered the test. Is it the same as the company you are buying the product from or is it a company you’ve never heard of?  There’s no problem with tests ordered by overseas factories if they’re for your actual product but be wary of reports ordered by factories for generic versions of their products.

These tips are just a few of the basics in evaluating test reports. I’ve listed several others in my September 30th article If You Sell Promotional Products, Learn to Read a Test Report. And if you’re a PPAI member, check out the November 2nd webinar entitled How to Read a Test Report. It is archived on PPAI’s website.

Test reports are an important part of your due diligence to ensure that the products you’re selling comply with applicable law. Your customers are relying on the integrity of the reports you provide. Take this opportunity to go through your files to verify that you have current test reports for the products you’re selling and that the reports really are for your specific products.

Distributor to Supplier: Is this Product OK for Children?

I received a call last week from a distributor concerned about an order she had recently shipped through an industry supplier for a children’s event. The distributor told me she had inquired of the supplier’s customer service rep if the product was OK for children but was now wondering what else she should have done. Here is a capsule of what I recommended.

Start by asking for the product’s General Certification of Conformity (GCC) as well as its most recent test reports. A GCC is required by federal law for every consumer product subject to any rule or regulation enforced by CPSC. Regardless of what the test report says, the GCC is the best way to find out if the supplier considers the product as a “children’s product.” If the supplier does not, even if the test report passes CPSIA standards, it is a red flag that the supplier might not be monitoring each production run to children’s product standards.

Recommendation 1 (Children’s Product): If you sell a product that you know is intended for children, be sure that the supplier acknowledges through the GCC that it is a children’s product. Then, if something goes wrong later, you won’t risk being in the position of the supplier saying “we didn’t know it was for children and we never said it was a children’s product.”

So how do you find out from the GCC if the supplier considers the product a “children’s product?”  You do so by examining the section of the GCC listing the applicable regulations. CPSIA requires the importer or domestic manufacturer to list every CPSC-enforced rule that applies to the product. If the supplier doesn’t have a GCC for the product, or if the section noting the applicable rules is blank, it means that the supplier is not acknowledging that the product is a children’s product or a children’s toy.

If the item is certified for use as a children’s product you will see at least two rules listed. The first is CPSIA lead-in-substrate, sometimes called total lead. The second is lead-in-surface coating, sometimes called 16 CFR 1303. Lead in substrate refers to lead in the material that the product is made of. Lead in surface coating refers to lead in any painted surfaces or in the imprint.

If the item is certified as a children’s toy you will see at least two more rules in addition to the two lead provisions. One is the mandatory toy safety standard called ASTM F963. That used to be a voluntary standard but Congress made it mandatory when they passed the Consumer Product Safety Improvement Act (CPSIA). The second toy related rule applies to chemicals referred to as “phthalates.” CPSIA prohibits the sale of children’s toys with concentrations of more than .1% of any of the phthalates DEHP, DBP, BBP, DINP, DIDP and DnOP.

Recommendation 2 (Children’s Toy): Same concept as recommendation 1. If you sell a product that you know is likely to be used a children’s toy, be sure the supplier acknowledges through the GCC that it is a children’s toy.

The GCC requires other information you should note as well. First, make sure that the product identified on the GCC is exactly the same as they one you’re buying. Second, look for the name of the U.S. importer or domestic manufacturer certifying compliance of the product.  Is it the name of the supplier you’re ordering from?  If not – perhaps because the supplier bought the product from a local wholesaler – is it a company you know and are comfortable with? The name on the GCC is the party certifying compliance – the party legally responsible if something goes wrong – and ultimately the party you’re entrusting with your client’s logo. And if this isn’t challenging enough, if the supplier buys a blank from an importer and then decorates the product, you need two GCCs – one for the product and one for the decoration.

Recommendation 3 (Responsible party): Look at the GCC for the party certifying compliance. If it is not the supplier you’re buying the product from then learn who the importer is and whether it is someone you feel is reliable. Also, in that circumstance, find out if the decoration is to be applied by the importer or someone else – your supplier or a sub contractor. If the answer is “someone else” you’ll need a separate GCC for the decoration.

The next important point relates to testing. The GCC requires the date and place where the product was tested for each regulation cited on the GCC and it requires the identification of any third-party laboratory on whose testing the certification depends. Look at the test reports you received and be sure they correspond to exactly what you see on the GCC. The lab name, test date and tests listed should match one for one with the same information noted on the GCC.

Recommendation 4 (Testing): I have written previously on the topic of how to read test reports to be sure your product complies as well as on the limitations of these reports. Review these articles at http://rickbrenner.com and keep them handy for reference. In a nutshell, be sure you have a current test report from a CPSC-certified third party laboratory, that the report is for the identical product, SKU number and color that you ordered, that it includes legible photographs of the product, and that it certifies compliance with every regulation identified on the GCC. You should also be sure that the test report is based on the most current version of the law. A passing grade from June 2011 doesn’t necessarily mean that the product passes the new lead threshold that took effect in August 2011.

There are a few other things to note as well:

  • A separate GCC is required for every production run – indicating the manufacture date. Be sure that that the GCC you receive is specific to the product you’ve received.
  • Ask your supplier to confirm that the product you are receiving is being manufactured in the same factory where the tested product was manufactured, that there have been no changes in the design or bill of materials since the test and that the tested product was produced from the same raw materials as your production pieces. If not, you should insist that your production pieces be tested.
  • It is best to communicate directly with your supplier’s compliance department or the supplier’s person responsible for compliance. Product safety laws are complicated and evolving. The people most likely to know the most are those who deal with compliance every day. My recommendation is to deal with suppliers who are knowledgeable about these product safety and compliance matters and who provide you with direct phone and email access to get your questions answered.
  • This article applies specifically to the children’s product provisions in the Consumer Product Safety Improvement Act (CPSIA). There are other federal product safety regulations and there are several state regulations. PPAI has developed an excellent tool called Turbo Test to help distributors and suppliers determine the regulations that may apply to a wide range of products in the industry and PPAI also has a relationship with a third party laboratory that is available to advise members. Also, there are many attorneys whose practices include a specialty in product safety legislation.

Prime Sample GCC

CPSC Sample Format – GCC   (Note: This link also includes an FAQ from the Commission about GCCs)

Differentiating Quality Still a Challenge for the Promotional Products Industry

Of all the costs that go into making a promotional product, quality costs are often the hardest to appreciate. If we do our job well, the product simply looks good and works. But if we don’t, if a product breaks, parts don’t fit together well, ink dries out, seams tear, imprints are crooked – the defect stands out like a black eye and does double damage. The flawed product disappoints and it reflects poorly on the company who gave it away – exactly the opposite of what promotional products are supposed to do.  And now, with ever increasing product safety regulations upsetting norms, threatening the industry, raising calls for indemnification and changing the way we source products, quality has been catapulted front and center as a critical and urgent topic for promotional products professionals.  Yet amidst all of the attention, it remains a significant challenge for our industry to differentiate the highest quality products from the similar looking but lessor products, particularly when they often appear even to experienced buyers to be the same.

For personal purchases, brand names and expectation levels often inform the quality aspect of our buying decisions. We don’t have the same expectations for an item we buy from a dollar store as one we buy from Ralph Lauren. In the grocery store we expect more from Del Monte and Heinz than we do from generic store brands. And we are willing to pay more for the additional quality we get from branded items.

But most promotional products are not branded. Similar looking products are available from dozens of sources with nearly identical descriptions. Search engines like ESP or SAGE can also make similar products appear to be the same.

But they aren’t necessarily the same.

A month ago I received a call from a trusted industry source who said he knew of a well-respected bag factory that had some unexpected downtime and might be able to improve our price on a very popular item from our line. From the description and photos on our website his factory quoted a very attractive price. But after we sent actual samples of our bag the price went up considerably. The fabric was a higher grade than the factory had assumed and our reinforced construction required more labor. Our bag was of a higher quality but the differences were not obvious from the picture and web description, even to a 30-year industry veteran.

As hard as tangible differences are to detect, the critical quality initiatives behind the scenes are even more invisible. Many industry players are now following guidelines like the PPAI Code of Conduct and strict standards from certification organizations like QCA and FLA. These quality commitments include factory audits to verify compliance with child labor laws, social accountability, environmental stewardship, product reliability testing, QC inspections, supply chain security and third-party tests for product safety regulations. The costs of these quality efforts are substantial – one Top 40 apparel supplier told me recently that he spends $500,000 per year on compliance – but none of these efforts are apparent from ESP, SAGE or Google searches. Yet every dollar spent on quality – higher grade materials, better construction, QC inspections and product testing – contributes to the reliability, integrity and compliance of the product – and ultimately, a more compelling statement for the end buyer.

For distributors with years of experience the challenge of selling quality against cheaper lookalikes is nothing new. They know their suppliers well and which ones have performed reliably year in and year out. These professionals understand that quality oriented suppliers are not likely to take on a product unless it has been tested and meets their standards.  But not everyone in the industry has this experience and many rely on ESP and SAGE for sources, searches that focus on price comparisons, not quality comparisons.

Aside from the challenge of educating our own industry is the challenge of educating end buyers, many of whom are young marketing professionals who find lookalikes through Google with little attention given to compliance or quality.  It’s not that these buyers are irresponsible; they just don’t understand the supply chain risks.  Yet if one of these lookalike products results in embarrassment, an injury, a recall or becomes fodder for a Prop 65 bounty hunter, our industry would take the hit and pay the price.

So what are some meaningful steps we can take to help promote responsible sourcing?

Education is the most important.  If everyone involved in the sale and purchase of promotional products understands the issues involved in quality and compliance, they will know the right questions to ask to help them make an informed decision of what product is best for their needs.  PPAI does an outstanding job providing this education through webinars, MAS/CAS certification, its Product Responsibility Action Group and through classroom sessions at Expo.  Many distributor and supplier organizations provide excellent training as well.

Second, the industry needs to do a better job of making it easy for distributors to differentiate the quality and compliance characteristics of similar products – on supplier websites, on ESP and on SAGE.  Better product descriptions would help as would some kind of grading system to indicate whether a product was sourced with budget, standard or premium quality.  Perhaps a series of standard icons could be developed to indicate product or supplier certifications, whether the product has been tested as a children’s product or toy, and whether it is compliant with other state or federal requirements.  It would be even better if these icons were active links to the actual test reports documenting the compliance claim.

John Ruskin once wrote “There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper.”  That has always been the case in the promotional industry.  But now, with product safety and compliance presenting such significant risks to our livelihood, it is more urgent than ever that we develop easier and more effective ways for the industry to differentiate the quality and compliance characteristics of similar looking products.