The Q2 2015 Stericycle Recall Index shows significant drops in both the consumer and automotive sectors, which suggests that manufacturers are increasingly taking responsibility for ensuring and improving safety standards.
But let’s look at this in context. Since 2003, safety notifications and recalls have actually been on an upward trend, and 88 per cent of them have been classified in the most “serious threat” category.
Data shows that from April to the end of June this year, there were a total of 1,158 recalls in Europe, and for every stakeholder in the product process from the manufacturer to the consumer this is 1,158 recalls too many. This is why the Government is currently reviewing the UK’s system for the recall of unsafe products under consumer champion, Lynn Faulds Wood.
Companies who have not been through a product recall process can easily be taken by surprise.
Although they may have insurance to cover a recall event, steps must be put in place very quickly to minimise the much broader financial and reputational damage that can spiral out of control, whether the recall involves food, toys, cars or electrical goods.
Document the issues
Whilst companies pay attention to the physical logistics of retrieving a product from the market, they must also prioritise a thorough paper trail or ‘chain of custody’ with proper documentation.
Recalling a product can prompt legal action and all the costs involved with that, but having a bulletproof chain of custody is often a manufacturer’s greatest ally.
Product samples, for example, can be treated as evidence in a legal case and it falls on the manufacturer to show proper handling of the product after retrieval. If samples go missing or if there are allegations of mishandling or tampering with the sample, these can all be addressed with a dependable chain of custody.
If a consumer seeks damages following a recall or complaint, holes in the chain of custody make it much more difficult for the manufacturer to defend against all manner of dubious claims. If there is even the slightest chance that a claim could be feasible, it can swing the balance of the case resulting in higher damages than are truly warranted.
It may seem like a small step in the retrieval process but it could be the one that ends up saving the company millions.
Interact with your customers
Enterprising organisations could consider a recall an opportunity to interact more closely with customers.
If it is handled efficiently and quickly customers will understand the situation and may even be impressed by the quality of customer service. Handled badly, and the opposite will be true.
Continue reading on page two…
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