High number of product recalls lowering consumers attentiveness

Interesting story in USAToday on the high number of product recalls and the impact on consumers. 

Last year there were 2,363 product recalls. Are things worse…probably not. Rather, the high number is due to an increased amount of testing and better regulatory oversight as well as the impact of social media (reporting by consumers).   However, the negative impact of the high number of recalls is that people are probably not paying as much attention…there is no shock value. This can become an issue if a recall is due to a significant hazard that can impact consumer’s health. 

This increasing lack of concern by consumers puts additional burden on manufacturers and retailers on ways to ensure that people take appropriate action when a recall occurs….or to make it right the first time.  

Surge in products being recalled may be numbing consumersBy Christopher Doering, Gannett Washington Bureau  
USA Today 6/10/12http://www.usatoday.com/money/industries/manufacturing/story/2012-06-08/product-recall-surge-consumer-fatigue/55466398/1

U.S. regulators, retailers and manufacturers are growing increasingly concerned that a surge in the number of products being recalled is resulting in "fatigue" by the public — increasing the chance that consumers could ignore or miss a recall that could ultimately endanger their health.

Consumers last year were deluged with 2,363 recalls, or about 6.5 recalls each day, covering consumer products, pharmaceuticals, medical devices and food, according to data from the U.S. Food and Drug Administration, the Department of Agriculture and the Consumer Product Safety Commission. The recalls announced mark a nearly 14 percent increase from 2,081 in 2010 and compare with about 1,460 in 2007.

Experts say the increase is the result of a combination of greater oversight by regulators, better testing procedures and the use of social media where consumers can quickly point out and discuss problems with other people.

"We're experiencing recall fatigue in my mind at the consumer level and also perhaps at the business level, and we all have to worry about that," said Mike Rozembajgier, vice president of recalls for Stericycle ExpertRecall, an Indianapolis-based firm which has provided advice and helped major U.S. companies, including Merck, General Electric and Wendy's, carry out recalls.

"We have this growing concern for safety, but with there being so many recalls going on (is the public) paying attention to them and responding to them in a manner that is necessary for the recalls to be handled effectively?" he said.

This year alone hundreds of recalls have already been announced. Pfizer recalled birth control pills after it was found there may have been an inexact number of pills that also could have been out of sequence, increasing the chance of an unintended pregnancy. IKEA asked its customers to return about 169,000 high chairs because the restraint buckle could open unexpectedly. And Dole warned the public not to eat a lettuce salad mix because of a possible health risk from salmonella.

Retailers and government regulators are increasingly struggling to reach people who may not know about a recall, or choose to ignore it despite the potential dangers. A 2009 study conducted by Rutgers found 12% of Americans ate food they knew had been recalled and 40% admitted never having looked for recalled products in their homes.

Increasingly, retailers and government agencies are expanding the methods they use to communicate with the public — from social-media technologies such as Twitter and Facebook to more traditional methods such as phone calls and postings within their stores. But the same methods that prove successful in reaching one customer could just as easily be ignored by another.

"We don't feel that our members are getting bombarded but certainly the general public is and sooner or later you don't know what to believe," said Craig Wilson, vice president for quality assurance and food safety at the warehouse giant Costco.

The 602-store warehouse chain uses data supplied from its estimated 60 million members and notifies them within 24 hours if they've purchased a recalled item. It then follows up with a letter. The result is that customers return about 90% of recently recalled products and, in the case of major recalls such as when a food product could cause serious health problems or death, Costco gets "the majority of everything that was sold back."

But Wilson says the national recall system "doesn't work as designed" and that consumers and retailers alike would benefit from a single, uniform network. He says the CPSC, USDA and FDA each have a different recall system with unique requirements, making it more difficult for companies like his to make sure they are complying with the rules.

At Rochester, New York-based Wegmans, the grocery chain has a detailed recall plan that can require hundreds of people to carry out. The 81-store East Coast chain follows a recall protocol increasingly common among retailers: posting recall information on its web page and within stores for customers, notifying its followers using social media tools and, when possible, calling individuals who may have used a store card for the purchase.

"We do what we can to protect our customers but then our customers have to protect themselves and they can't do that unless they have the information," said Jeanne Colleluori with Wegmans. Last year alone, Colleluori said Wegmans participated in about 40 recalls, and the retailer was ahead of that pace in 2012 with about 16 recalls as of early May.

Businesses can ease the burden of a recall on their reputation and bottom line by being honest and upfront with their customers and crafting a response plan before any recall occurs that outlines what they will do with the public, media and regulators, industry watchers say.

"Many companies are being criticized not because they are not doing the right thing but because they are taking too long," said Sophie Ann Terrisse, chief executive of STC Associates, a brand-management firm.

She said some firms fail to estimate the work needed to conduct a recall and quickly become overwhelmed, leading to slow responses or poor customer service from representatives who don't have the time or know how to respond properly. "Things can get out of hand very quickly and it's hard to recover from that" for the brand and the company's core audience, said Terrisse.
Companies involved in recalls all say their primary concern is protecting the public — but they also have a business interest as well. "Our concern is for our customers but we have to protect our name as well, and we are very much aware that when there is a recall if it is a Wegmans brand product our reputation is at stake," said Wegmans' Colleluori.

 Some businesses have managed to take a recall and turn it into a marketing bonanza that benefits the company. Two years ago McDonald's took the unusual step of paying customers a premium to return Shrek glasses to the restaurants following concerns that paint used to depict characters on the glasses contained cadmium — a carcinogen known to cause kidney problems.

"Mistakes can be made, but the way they are dealt with is by being completely open and letting the customer become part of the recall," said Terrisse.

For Stericycle ExpertRecall's Rozembajgier, the recall surge has turned into a lucrative business for his company, the largest U.S. firm handing consumer product, food and pharmaceutical recalls. The firm has its hands in nearly every stage of the process from storing a recalled product, helping warehouses and stores remove the item from shelves, dealing with customers and ensuring the company conducting the recall is complying with guidelines set out by U.S. regulators.

At its five warehouses in Indianapolis totaling 700,000 square feet (about 12 football fields), the firm collects and stores recalled items — everything from household appliance components to sporting/recreational equipment to jewelry.

In fact, eight years after Merck voluntarily recalled Vioxx, Stericycle ExpertRecall still has a full side of a warehouse stacked floor to ceiling with cases of the arthritis drug. There are still a number of lawsuits pending, and Stericycle ExpertRecall must keep the drug under lock and key until the FDA says it can be destroyed.

"Recalled products come here to die," said Rozembajgier, whose firm has been involved in nearly 3,000 recalls during the last decade. "If they come to Indianapolis they're not getting back into the supply chain."

The firm has started to recycle some of the recalled items. For example, it has recycled the batteries and plastic components from recalled medical devices; copper from the wiring in electrical products; and sugar has been extracted from liquid medication.

The government operates a recalled website, http://recalls.gov/, which offers the public information on all recalls including cars, boats, food, consumer products, medicine and cosmetics.

The U.S. Agriculture Department's Food Safety and Inspection Service improved its recall system in March by rolling out a Twitter feed that targets consumers only if their state is impacted. In the past, FSIS would send out a Tweet to the 250,000 people who follow everything that happens at the agency.

 USDA Secretary Tom Vilsack downplayed the number of recalls that are announced considering the number of products that are produced, items that are sold and meals consumed each day.

"I think people want to know and need to know and have a right to know if there is a problem with a particular product," said Vilsack. "We're going to look at ways in which we (communicate) and constantly improve how we communicate but we're not going to stop communicating."