It’s toy season, as kids compile their Christmas wishlists with Pokemon or Barbie or Star Wars action figures. The global toy market is worth around $ 100 billion and the pandemic saw an increase in toy sales as more children were stuck at home.
But how safe are toys? And when there is a design or manufacturing defect that could harm children, how do companies respond?
I recently co-wrote a research study that looked at how long it takes toy manufacturers to recall products that pose a safety risk. Our research suggests that in many cases, recalls for toys that pose serious safety threats often take longer to be issued than for toys that have less serious safety concerns.
Late response to reminders
Several factors appear to play into a company’s response time to issue a recall, including potential damage to the company’s reputation and concerns about the negative impact of recalls on sales.
While government regulators can order mandatory recalls by companies, companies should also advertise so-called voluntary recalls if they become aware of a product defect.
The United States Consumer Product Safety Commission reported that in 2020, there have been almost 150,000 toy-related injuries and nine deaths in children 14 and under. Most of the deaths are due to children choking on small toy parts.
From a business standpoint, recalls are a crisis event for a business. Businesses face a dilemma when recalling defective products that have caused injuries and deaths. Timing decisions on recalls indicate the extent of responsibility the company is prepared to take for the crisis.
The level of danger can influence decisions
The severity of hazards in all industries can significantly influence recall decisions. For example, while Johnson & Johnson recalled millions of bottles of Tylenol in one week in 1982 after the adulteration of the product has resulted in several deaths, pharmaceutical company took two years to recall products of less concern like a bad smell.
Early recalls of defective toys could prevent injury and death. However, from a business perspective, early recalls could suggest to their stakeholders that there are systemic issues within the business that could lead to high costs, damage to reputation, and public backlash. .
The toy industry is very competitive and subject to seasonality, which means the Christmas shopping season is crucial. Toys also have short life cycles. All of these factors put pressure on prices and profit margins for companies in the industry and these pressures impact how recalls are handled.
Children are consumers
This conflict between public safety and corporate profits is particularly problematic for the toy industry. While customers are parents or adults, consumers are children.
Our study looked at toy recalls in the United States over a 30-year period. There were 833 recalls issued by 445 companies from 1988 to 2018. Products include all kinds of children’s toys, including musical toys, activity toys, water toys, dolls and plush toys.
There are generally two types of product defects that lead to recalls in the toy industry: problems with the design of a toy, such as the presence of small detachable parts like button grommets and beads, as well as strings or other design flaws that could lead to strangulation – or problems resulting from manufacturing defects, including the presence of prohibited or unapproved materials like lead paint, faulty assembly or substandard parts that break or crack.
Shift the blame
While companies typically design their own toys, they almost always outsource the manufacturing process.
Our study indicates that for defective products that presented serious hazards, the recall time was longer for design-related recalls.
In cases where design flaws result in serious hazards, companies may be less motivated to issue a prompt recall as they would prefer a detailed investigation and liability assessment to communicate corrective actions before issuing the recall.
Recalls happen faster when the fault of the defect can be traced to manufacturing issues, enable companies to reduce damage to their reputation by drawing on the impressions of consumers who foreign manufacturers are mainly responsible for product defects – although previous research by one of the co-authors of our study, Hari Bapuji of the University of Melbourne, suggested that faulty designs were responsible for 75 percent of all toy recalls.
Another surprising finding from our research is how toy makers who have issued previous recalls are reacting to new defects.
Reputational risks of recalls
Whereas experienced companies were expected to recall defective products with serious risks faster because they know the process to deal with such failures effectively – as suggested in automatic reminders – our study found that toy manufacturers who had carried out previous recalls took longer to recall toys that presented more serious dangers than those that presented less serious problems. The reason could be that the recall of products that pose a serious danger to consumers means higher costs for businesses and potential loss of customers.
So how do you know if the toys on your children’s Christmas lists are safe?
It is important for parents to exercise due diligence with toy companies by following a company’s recall history before purchasing.
Non-profit organizations like Public Interest Research Group tracks toy recalls. Consumers can also help by report defective products to regulatory bodies such as the Consumer Product Safety Commission.
But our study also suggests that government regulators need to step up and tighten regulations to keep unsafe products from entering our stores by requiring toy manufacturers to report past recalls when they report new issues with a. product.