How do you handle a product recall?
Product recalls are an unfortunate reality of modern retail. They are usually initiated because of safety problems but increasingly, regulatory or quality issues are behind the decision.
Addleshaw Goddard litigation lawyer Mark Chesher says speed, planning and communication are key to a successful product recall.
“Reacting quickly to an issue can demonstrate your company’s commitment to quality and safety and could enhance its reputation,” says Chesher.
Efficiency is essential to minimise reputational damage. Recall plans should be tested regularly to ensure staff know their roles and responsibilities in advance.
“Communication is essential and it is important to ensure a clear, consistent message is given to the right people at the right time,” says Chesher.
Early engagement with the relevant regulatory bodies might reduce the risk of criminal prosecution and sanctions at a later stage. Any corrective message to customers must be clear and simple, and insurers should also be informed without delay.
International product recall is inevitably more complex but retailers should be aware of the long-term risks of failing to carry out a comprehensive recall if necessary.
“Local regulations may require a nuanced approach but obviously inconsistent treatment of consumers can lead to a perception that some are treated less favourably based purely on geography,” says Chesher.
“While more costly in the short term, risk to reputation may justify a global approach even if that goes beyond the legal requirements of some markets.”