CPSIA – Keeping Our Children Safer on Black Friday
Just four days until Black Friday. Major retailers have already announced major “doorbuster” deals for those die-hard shoppers willing to brave cold temperatures and early morning lines for a chance at a good deal. Most of the purchases my family will make this year are toys, games and clothing for our two children. My hope is not to get anything that requires extensive assembly or anything that comes packaged in those horrible plastic clamshell contraptions. Last Christmas, I wrote about the case I wrap rage I suffer from due to the elaborate packaging mechanisms that toy companies employ to secure their products in the supply chain. But this year toy companies are investing more than ever in product safety. The investments are not just to prevent damage during transportation or theft at the store, but also to minimize any health related issues that might arise from children’s use of the toys.
I am referring, of course, to the US Consumer Product Safety Improvement Act (CPSIA), which became effective in February 2009. The law is targeted at manufacturers, distributors and retailers of products used by children 12 years of age or younger. The most important aspect of the law is that it lowers the acceptable tolerances for harmful substances such as lead and phthalates in children’s products. The scope is broad including not only toys, games and electronics, but also apparel, footwear, accessories, bedding, books, school supplies and personal care products. Violators of the law can face civil or criminal penalties including up to 5 years in prison. CPSIA also expands and empowers the Consumer Product Safety Commission (CPSC). Prior to enactment of the law, CPSC had only one person responsible for testing all toys in the. CPSIA considerably expands the budget for the public safety agency including the addition of 500 personnel by 2013.
Among the most challenging aspects of the regulations are the new testing and documentation requirements. In the US, sellers of children’s products must have a copy of a General Conformity Certificate which attests that the product complies with all applicable safety rules. Certificates must contain the date and place of manufacture as well as contact details for the manufacture. If third party testing was performed to ensure compliance, then the date and place of testing as well as contact details for the tester must be provided. Certificates must accompany the product through distribution chain, which means that both the manufacturer, retailer and any intermediary distributors must keep the information on file.
The US is not the only country with consumer product safety regulations targeted towards children. In 2009, the European Union introduced the Toy Safety Directive, which targest any product intended, whether or not exclusively, for play by children under 14 years of age. The EU regulation governs the physical, mechanical, chemical, electrical, hygeinic, radioactivity and flammability properties of the products. Documentation requirements in the EU are similar in spirit to the US laws with additional requirements such as the need to keep safety assessments on file for a period of 10 years.
National Bankruptcy Day
The CPSIA regulation was not very popular with retailers or manufacturers upon its introduction. The documentation requirements are burdensome (more thoughts in a future post), but the majority of the criticisms were focused on the extremely short timelines, breadth of impact and scope of testing. One Wall Street Journal Reporter described the original effective date of the legislation, February 10th 2009, as National Bankruptcy Day. The fear was that a tremendous amount of inventory would still be in the supply chain when the law went into effect. Numerous retailers would have product on their shelves which had not been properly tested and certified. Others would have inbound product that had been manufactured shortly after the law was passed. Critics of CPSIA suggested that the US economy could lose up to $1B.
Other critics of CPSIA argued that the law favors large retailers and manufacturers, which enjoy the economies of scale necessary to cost-effectively test children’s products. Many smaller retailers feared that entire categories of merchandise would need to be discontinued due to the high costs of testing. For example, Goodwill stores lack the budget the buy testing equipment for clothes and toys that may contain lead in them. Certain products such as children’s books have been particularly controversial. Regular children’s books have never presented any health risks, but are now subject to the CPSIA regulations. Critics call it “The New Book Banning.”