Reluctance And Silence On Recalls
From the October 28, 2006 edition, New York Times (Late Edition(East Coast)), Your Money Column, Page C1.
By Damon Darlin.
Marla Felcher is an authority on product safety, having studied it for more than eight years.
But Ms. Felcher, a marketing consultant and the author of ''It's No Accident: How Corporations Sell Dangerous Baby Products,'' has never had a product she owned recalled until last month. That was when Lenovo announced that certain IBM ThinkPad notebook computers contained batteries that could catch fire.
Yet Ms. Felcher didn't notice the announcement made by the company and the Consumer Product Safety Commission. It was only after a colleague at the Kennedy School of Government at Harvard, where she is an adjunct lecturer, sent an e-mail message to the faculty warning them that Ms. Felcher learned she was carrying a potential fire hazard under her arm. ''I would have missed it,'' she said.
Her experience is not unlike that of millions of consumers, most of them considerably less aware of recall notices. Despite major recalls occurring several times a month -- so far October has brought a few million more exploding notebook batteries, a strangling cardigan for children and a pumpkin-decorating kit cum choking hazard -- most people are oblivious to them.
The most remarkable thing about recalls is how few people respond to them. (The second-most-remarkable thing is that the safety commission cannot say how effective a single recall is.) Companies do not like to publicize that they sold a defective product. But because few companies know who bought a product, publicity is generally the only way most can reach customers. ''The whole system in which the government, particularly the C.P.S.C., communicates to the public is fatally flawed,'' said Rachel Weintraub, director for public safety at the Consumer Federation of America, an advocacy group. ''They send press releases out and hope people see it on TV or on the radio.''
It does not help that the safety commission, the federal agency charged with protecting consumers, is severely limited in what it can say about safety investigations. Even after a recall is announced, it cannot disclose any information that the recalling company does not want disclosed, agency staff members say.
The commission has been analyzing recalls and has been listening to consumer focus groups to determine when and why consumers respond to recalls. But the basic problem remains that companies don't like having to announce a recall.
''Most companies are resistant to the word 'recall,' '' said Sally Greenberg, senior product safety counsel for Consumers Union, another consumer advocacy group. ''They should be showing their concern for their customers, instead they get all nervous about it.''
The recent recalls of lithium-ion batteries for notebook computers offer lessons for consumers on how to think about recalls and product quality. When Dell announced in August that it needed to recall 4.1 million notebook computer batteries because they could catch fire, notebook owners could easily have concluded it was a problem particular to Dell.
But Apple, Lenovo, Sony, Toshiba Gateway and Fujitsu used similar noteback batteries made by the same manufacturer, Sony, at the same factory at about the same time with the same processes. The safety commission was aware of that because Dell officials shared the results of its investigation into the cause with the government.
Dell sought publicity about its recall, concluding that it needed get the word out. One executive was giving television interviews before dawn in front of Dell's Round Rock, Tex., headquarters. Officials granted scores of interviews. But the other companies kept a low profile.
A few weeks -- and a few notebook fires -- later, Apple acknowledged that it had the same problem. It recalled 1.8 million of its notebook batteries, though it termed the low-key recall a ''battery exchange.''
Lenovo followed with an even quieter recall of a half million more notebooks in late September. Then last week, 3.4 million more batteries for Sony, Toshiba, Gateway and Fujitsu notebooks were recalled. All told, more than 9.9 million notebook computer batteries, all made by Sony, have been recalled. (And the batteries continue to catch fire. Fujitsu reported yesterday that a customer received minor burns on his hand when a battery he was removing sparked.)
Why did the safety commission drag it out over three months? It will not say. A spokesman cited the federal law prohibiting the disclosure of information.
The same law is cited when questions are posed as to how effective the recall was in getting the dangerous products out of consumers' hands. In any case, the correction rate -- the number of products returned to the manufacturer -- is only one indicator of a successful recall, said Nancy A. Nord, the acting chairwoman of the safety commission. ''But it shouldn't be the only one,'' she said.
For example, one of the biggest recalls was for a ball-like container holding a Pokemon toy that Burger King handed out with children's meals in 1999. The company gave away nearly 25 million of them before a 13-month-old child suffocated when one half of the ball covered her mouth and nose. The child's family sued Burger King and won a settlement, the amount of which they agreed to keep confidential. In that recall, Burger King offered a small bag of French fries to any person who brought back the toy. It also ran advertising, a rare act by recalling companies. Few came back, the safety commission staff members said. They assume most people tossed them out.
Indeed, Ms. Nord said that research already shows that among consumers who didn't respond to a recall, 60 percent had already thrown the product away. ''That may well be an effective recall,'' she said.
The government agency does urge some companies to make more of an effort to get their products out of circulation. Safety commission officials tracking a BernzOmatic propane heater that was recalled in 1987 after 42 people died from carbon monoxide poisoning asked the company to repeat the recall in each of the three following years. It had to do another one in 1994 because six more people had died since the initial recall, according to staff members.
Publicity is not always the solution. One of the most publicized of all recent recalls was for Firestone tires on Ford Explorers. Despite the media attention, only about 60 percent of owners took their vehicles to the dealer. (Many did not get the spare replaced. Sean Kane, president of the Safety Research and Strategies consulting firm, estimates 6.5 million defective tires are still in or on vehicles.) Only half the Pintos, the infamous compact car that exploded, were ever retrieved.
The safety commission said it would try to build in incentives, like bounties, when it negotiated with recalling companies. Starbucks, for example, offered a $5 gift card to get back the $25 ceramic tea kettles that got dangerously hot when placed in a microwave. Only 257 were sold, so it was not too daunting a task.
In most recall cases, manufacturers simply do not know who bought their products unless consumers filled out a warranty card. But because companies ask all sorts of marketing questions on those cards like age, income and where they saw the product advertised, many consumers do not bother.
The consumer advocates insist that forcing makers to include simple registration cards for nearly every product over $10 in value would help solve the problem.
Ms. Nord is against that idea because it would burden manufacturers with additional costs. She said that in the case of baby car seats, the return rate of such cards are ''abysmally low.'' She said: ''I am not sure cards will do the trick. There may be other techniques and we are willing to explore that.''
''Consumers need to make a commitment here,'' she said. If consumers do want to track recalls, the best government sites are www.cpsc.gov or www.recalls.gov. Consumers can sign up for e-mail alerts about recalls at www.cpsc.gov/cpsclist.asp. Consumer Reports magazine's Web site also lists recent recalls at http://www.consumerreports.org/cro/consumer-protection/recalls/index.htm.
When companies make the commitment, though, the recall is more successful. Williams-Sonoma sold a defective gas grill in 2000. The company tried to locate every one of the 950 grills by putting posters in all its stores. Then it hired a company to obtain the names of customers from credit card companies, so it could send a letter directly to people who bought the grill. It also offered $50 on top of a full refund for returns. All but two products were retrieved.
''They were trailblazers in our view,'' said Marc J. Schoem, director of the office of the safety commission's recalls and compliance unit.
Technology may help. Some consumer advocates suggest installing radio frequency ID tags on big-ticket items, like tires, so products can be more easily identified. A purchase on the Internet should leave merchants with better customer records. Indeed, Dell, which sells direct to consumers, is counting on that to reach most of its buyers. (More than a million batteries have already been replaced, the company said.)
Ms. Felcher said that at first she found the directions for identifying her notebook's battery onerous. But the Lenovo site provided software that automatically identified if the battery was part of the recall. ''The company actually did a good job of making it easy,'' she said. ''I just typed in my address and contact info and they are mailing me a new battery. Most product replacements are not this easy.''
It was a learning experience for her. ''I've tried not to blame the consumer, and it is not their fault,'' Ms. Felcher said. ''Now I understand just how much work this would be, and why so many recalls are ignored.''
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