Clearly a voluntary recall is in a company's best interest. The Consumer Product Safety Commission (CPSC) even has a Fast Track Program for companies willing and able to move quickly with a voluntary recall of their product.
If you perform a voluntary recall, you'll need to work with the appropriate regulatory body for your industry. You can find detailed safety and recall guidelines for the three agencies covering the majority of products here:
'Tell them what you know, tell them as soon as you know it, and tell them the facts,' Cahill says. 'Anytime a company tries to posture or position themselves to get around the facts, they get into trouble very quickly.'
Dig Deeper: Quality control and sourcing in China.
How to Handle a Product Recall: Get the Message Out
Unfortunately, the work doesn't get any easier from here. The whole purpose of a product recall is to get as many of the defective, unsafe products back, so that means getting the message out to the public. The trick is to do it in a way that doesn't damage the reputation of your company.
'Oftentimes manufacturers, retailers, and trade associations are reticent for fear of product liability issues,' Gibson says. 'But research tells us the public likes the impression that they are being dealt with honestly."
Gibson says one of the first dilemmas with communicating a product recall is deciding who the messenger should be. 'People like to get the feeling they are being leveled with completely from the start by the CEO,' he says.
While that may be the case, it's also a good strategy to hire a public relations firm to coordinate media relations. There are many that specialize in product recalls.
Another decision is on how potent the message should be. 'I think you should make it as vivid as possible,' Gibson says. 'That's what it takes to get through to a public that is saturated with messages.' It may be especially difficult to get the public to return smaller items, such as a lighter or a toy, compared to automobiles, for instance.
Although Gibson says there is an incentive for corporations to undersell how bad the problem is, he insists that, even in a tense recall situation, honesty is usually the best policy.
'When consumers believe that a company is being honest, forthright, and genuinely concerned about the customer's well-being,' Wix says, 'they recognize that problems sometimes can and do occur, and they can forgive and forget.'
Wix also advises to make the message as consistent as possible, both to the public and to the regulatory agency involved in the recall. The agency will also be closely monitoring your public relations strategy during the recall, with the CPSC helping draft press releases and point-of-sale posters, for example.
Don't forget to communicate what's going on with your employees, either. 'There is a lot of fear,' Cahill says. 'Am I going to lose my job? Did I do something that caused someone injury?'
Dig Deeper: How to manage your own PR.
How to Handle a Product Recall: Trace the Product
When products start arriving, you need the proper infrastructure to support the recall. Configure a section of your website to explain what the product is, what serial numbers are affected, and a link to register for the product recall. You should coordinate registration with your fulfillment center and customer service.
Beware of the sudden spike in traffic. 'A company may be used to getting 300 hits a month, and then the recall launches and they get 300 hits in the first hour,' Cahill says. Have a contract in place with a phone center as a back up in case your site crashes.
Of course, you'll need to quarantine the product within your facilities and stop shipment, but you'll also have to contact distributors and retailers to take the product off the shelves.
Your ability to trace the product to each individual consumer may also be limited. For example, if you're recalling a food product sold at a grocery store, you may be able to trace the product to the store itself, but not to who bought it. With credit and debit cards becoming more popular for purchases, however, tracking products down isn't as difficult as it once was.
Still, even for the most successful recalls, a 75 percent rate of return is 'unheard of,' Gibson says. 'Fifty percent is really good.'
After gathering all those unsafe products, you still have to figure out what to do with them—and your customers. 'We've initiated the recall, but now what's going to be done with the products,' Wix asks. 'Are they sent back to the company to be reworked, or is a different product provided to the consumer? Do they get a refund? Certainly there needs to be a clear remedy for consumers.'
Dig Deeper: Recalls bring opportunity for small businesses.
How to Handle a Product Recall: Protect Yourself from Lawsuits
One more word to the wise: beware of litigation. 'My experience has been that whenever there is a recall, there is likely to be litigation involved,' Wix says. Make sure you aren't creating documents through internal communications among employees, for instance, that won't be protected under an attorney-client privilege.
'Just initiating a recall isn't sufficient to insulate a company from liability,' Wix says. 'There are situations where companies are held liable because of an improperly conducted recall.'
It goes without saying that this is a serious job. But if you conduct yourself in an open, orderly fashion with the best interest of your customers and company in mind at all times, you greatly increase your chances of survival.
