Carrying out a product recall can cost a pretty penny, and it can be tempting to cut corners to save a few bucks.
But the consequences of not doing a thorough recall aren’t worth it.
Flushmate, a toilet flushing system manufacturer, recently learned that lesson the hard way.
The manufacturer settled an $18 million class action lawsuit after several consumers claimed the firm:
- deliberately sold the flushing system for years despite knowing of a dangerous defect, and then
- carried out an inadequate recall that never really solved the issue.
And the product defect was no joke.
Flushmate’s defective high-pressure flushing system led to exploding toilets across the nation, and 14 reported impact and laceration injuries.
United Desert Charities initiated the class-action lawsuit in 2012 - just a month after Flushmate had recalled 2.3 million of the systems.
The lawsuit (PDF) claimed that Flushmate knew about the dangerous defect in July 2000, but downplayed it by issuing a couple of tepid product advisories that year and then again in 2003.
And then when Flushmate finally recalled the product, consumers said the plan was seriously lacking.
Instead of replacing the product, Flushmate offered a free repair kit.
Problem was, the repair kit didn’t work well in many cases, and it usually required consumers to pay out-of-pocket expenses for a plumber — which Flushmate didn’t reimburse.
Now the company is paying out $18 million to cover property damage and personal injuries.
And that number may increase if it’s not enough to cover all of the claims.
Making sure recalls are thorough
Manufacturers that hesitate with product recalls risk getting into a world of trouble, including:
- huge fines from the Consumer Product Safety Commission (CPSC), and
- costly lawsuits.
And as this case shows, even issuing a recall still doesn’t minimize all the risks — if the plan isn’t thorough enough.
Here are a couple of tips for effective recalls:
- Act quickly. CPSC requires firms to report a product defect within 24 hours of obtaining the information. But don’t wait on the feds to get the word out. Make a public announcement about a product risk when you find out about it — instead of letting time pass while you go through the bureaucratic slog with CPSC.
- Make it easy on customers. How you handle a recall is a make-or-break time in the relationship with customers, so you want to make the process very simple for them. Be sure that returning and replacing the product is as seamless as possible, and make the recall info on your web site clear and concise.
