CPSIA – Send Me Your Notes about Disappearing Products

We need some data about your sense of regret and loss over the disappearance of favorite products. We are interested in everyone’s feelings, so feel free to share if you are a consumer, a teacher, a school administrator, a parent, a store owner, a distributor, whatever. We want to know about CPSIA-related product disappearances. Are you finding it harder to find that educational product you know and love or need, that t-shirt your daughter wants, that piece of jewelry you wanted to buy for a birthday, that special hair bow you need to make your baby sparkle? Have you lost suppliers, supply items, product lines you depend on? What are the casualties brought on by the CPSIA?

Please send me your notes. You can leave them as comments to this post, or email them to me at rwoldenberg@learningresources.com or fax them to me at 847-281-1730. Please provide your name and address, as well as a return email address.

We need to make ourselves heard. Please ask friends, family and associates to answer this call. Thank you!

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CPSIA – Send Me Your Notes about Disappearing Products

CPSIA – Rob Wilson’s Op-Ed in PSL on Resale Guidance

October 9, 2009

Consumer Confusion Comes From CPSC Guidance, Not the Media

By Rob Wilson

Product Safety Forum recently published an article by Consumer Product Safety Commission (CPSC) Chairman Inez Tenenbaum intended to reassure thrift stores and families holding garage sales that the CPSC will not punish them with million dollar fines for sales of recalled items in violation of the Consumer Product Safety Improvement Act (CPSIA). Those of us who manufacture children’s products support the CPSC’s effort to rid the market of recalled products, but Ms. Tenenbaum’s essay vividly illustrates her misunderstanding of the fears generated by the new product safety law.

Why are families and resale shops pulling children’s products from their stores and garages? It’s not for fear of selling recalled products; after all, it’s relatively easy to go on the CPSC website and learn which items have been recalled.

It’s not the media causing confusion and panic in the marketplace, as Ms. Tenenbaum asserts in her article. In fact, the fears were caused by the CPSC itself, originating in its recently published guidebook, CPSC Handbook for Resale Stores and Product Resellers.

The handbook explains that the new law not only prohibits the sale of recalled products at yard sales or by thrift shops, but also any product that doesn’t meet the CPSIA’s strict new lead standard, contains any one of six prohibited phthalates (found in plastic), or violates any other CPSC standard, ban, rule, or regulation. The possibilities for violating the law seem endless.

The handbook lists many products that may fall into this category: painted products, wood products with any varnish or paint, clothes with rhinestones, metal or vinyl/plastic snaps (including buttons), zippers, grommets, closures or appliqués, inexpensive children’s metal jewelry (ie. children’s jewelry not made from gold, platinum, sterling silver, precious stones, pearls, or other absurdly expensive materials), books printed in 1985 or earlier, or any book that can be played with. In a nutshell, the items that you typically see at a family’s garage sale or a thrift store.

Yet resellers and families holding garage sales have no idea whether the buttons on a child’s shirt contain lead above or below the new standard, or whether a plastic toy contains phthalates. The only way to tell is by testing it, and families aren’t going to spend hundreds of dollars per product to test a $5 tinker toy. In many cases, including tests for phthalates, the product must be destroyed. If families could afford to test products, even the most entrepreneurial might find it difficult to sell the product once it’s turned to dust. The CPSC’s handbook offers a good solution: don’t sell the children’s product if you are not sure.

But perhaps you are thinking, “this doesn’t apply to me.” Back to the handbook for guidance: “You are not required to test your products for safety. However, resellers (including those who sell on auction Web sites) cannot knowingly sell products that do not meet the requirements of the law. You can protect yourself by screening for violative products. Ignorance of the law is not an excuse.” The handbook then goes on to advise: “If you should happen to sell or offer for sale a product in violation of the CPSIA or other law, CPSC’s response will vary depending upon the circumstances, including the nature of the product defect, the number of products, the severity of the risk of injury associated with the product and the type of violation. The Commission’s response would also take into account the fact that you may be a small business.”

In other words, the “guidance” is clear as mud. You don’t have to test, but you better not sell products that don’t meet requirements of the law, which you can only determine if you test. If you do violate the law, CPSC may take it easy on you if you are a small business or a family holding a garage sale . . . unless they decide not to.

The heart of the problem for the resale community is the retroactive nature of the law. If the law were not retroactive, all items manufactured according to the rules before February 10, 2009 would be deemed safe, and anything made after the implementation would be certified compliant (and safe). Without retroactivity, thrift stores must follow CPSC guidelines and eliminate most of their children’s products, since most fit the profile of a “risky” product (meaning there is even a slight chance they might not meet the new standard), they must be presumed not compliant unless proven otherwise.

If Chairman Tenenbaum wants coats, toys, books and children’s products to remain in thrift stores this Christmas season, she needs to stop being a mouthpiece for the authors of the legislation who claim the law is absolutely perfect. If she wants families to be able to sell their kids’ old clothes and toys on the weekends and remain law abiding citizens, she must start being an advocate for a common sense approach to implementing CPSIA. If she wants consumers to still have access to handmade, natural or educational products, she needs to take a serious look at why this law is hampering their availability.

Chairman Tenenbaum vowed at her Senate confirmation hearing to bring a common sense approach to CPSIA implementation. We are still waiting for signs of common sense from the agency regarding CPSIA. Now is the time for the Chairman to end the confusion and dysfunctionality in the marketplace by advocating for common sense changes to the CPSIA.

Rob Wilson is vice president of Challenge & Fun, an importer of natural toys, founder of CPSIA-Central, and a board member of the Handmade Toy Alliance. Contact him at rob@challengeandfun.com

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CPSIA – Rob Wilson’s Op-Ed in PSL on Resale Guidance

CPSIA – More New Standards to Help Put The Fork Into Small Business

Perhaps you are aware that the Retail Industry Leaders Association (RILA) and British Retail Consortium (BRC) are working on new “Global Standards for Consumer Goods“. RILA presented this new construct to the CPSC on October 5 and were warmly greeted for their efforts. According to the Product Safety Letter: “Tenenbaum termed the effort ‘encouraging’ and urged the group to include details in upcoming comments on CPSIA-related reasonable testing programs. She said it is good that the release of the RILA program and the pending comment period (slated to open in November) are likely to coincide. ‘The timing could not be better,’ she told the visitors. She also noted the power of retailers to push standards: ‘The way that you all could fan out in China would really facilitate the process exponentially.’ Adler said, ‘What I heard is terrific. You’re all ferocious competitors and will remain so. But you’re not going to compete on safety.’ Also pointing to the power of retailers to impose standards, he called regulators and retailer allies.

A quick glance at these standards makes clear that they are a death sentence to small businesses. The practical impact of the rules will be to bifurcate the market for importers and factories – suppliers to mass market and suppliers to the rest. You won’t be able to be in the mass market camp without complying with these standards. There won’t be any halfway point – it will be like a pregnancy test, you comply or you don’t (pregnant or not pregnant). Of course, this also means that you must incur a HUGE cost to sell even one product into the mass market. This barrier to entry will make the mass market off-limits to small fry. Goodbye American Dream?

I find it interesting that the CPSC jumped at the chance to support these standards. Where did the standards come from? The mass market, of course. RILA is a mass market enterprise, designed to represent the interests of a few large (LARGE) retailers. Ditto for the BRC. Notably, when the CPSIA was in gestation in 2007/8, the folks behind the law reached out to the likes of Wal-Mart to ask about the feasibility of their brilliant safety innovations. By several reports (to me directly), Wal-Mart and their ilk expressed little concern about their ability to comply. Case closed. Ahem, what about the rest of us? Congress overlooked that little detail, figuring that what Wal-Mart can do, the rest of us can do, too.

Have we learned NOTHING in the last 18 months? Please don’t make me answer that one.

A quick glance at the standards reveals that they are really only suitable for mega-businesses, particularly those that have committed to ISO 9001 and the like. This group does NOT include EVERYONE. The sections on Risk Management and Management (check out 3.8 Traceability – yeah, FULL traceability is required) are particularly out of reach for small businesses. Some of the new standards have already been addressed by initiatives in recent years to address “Code of Conduct” issues, like ICTI-CARE, and will probably be okay (within limits). But the RILA/BRC standards go much, much further. The cost implications of these standards for small business are breathtaking.

If a “damn the consequences, don’t bother me with the details” rush to implement these new standards takes hold, there will be little reason left to try to be a small business in America. After all, standards like the RILA/BRC global standards are a classic glass ceiling to growth. I hope somebody takes note of the impact of these awful standards on small business, the largest creator of jobs in America. Small business needs an advocate, and these days, it’s hard to identify anyone in Congress that gives a darn. If no one will rise to the occasion, I guess we can always open up a sandwich shop. That’s about the only option that will be left for small business. Making products, besides sandwiches, has become a very unrewarding pastime.

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CPSIA – More New Standards to Help Put The Fork Into Small Business

CPSIA – Learning Curve Begs for Common Sense (What a Joke)

On Friday, the CPSC Commission docketed a decision on a request for exclusion under Section 101(b) filed by Learning Curve Brands, Inc. Learning Curve (a company owned by RC2) is famous for its Thomas The Tank train sets, which had a little recall problem back in 2007 but we don’t need to go there right now . . . . In any event, among other things, they make die-cast vehicles like this and want permission to use brass bushings on the wheels.

In a sane world, no one would need to ask the government a question like this. Thanks to Mr. Waxman, that’s not our world anymore. Wacky or not, they must plead their case. As Learning Curve notes (their filing is not apparently public, or at least I cannot find it on the “easy to use” CPSC website): “1) CPSC has already granted an exemption for brass and other lead containing alloys in electronics where the material is necessary for the function of the product; 2) the brass is required to ensure that the products pass the necessary use and abuse tests by preventing the wheels from separating from the axles; 3) children are not likely to be exposed to the lead in the product; 4) other household products, including plumbing fixtures are allowed to contain lead at levels that exceed the CPSIA limits; and 5) a study conducted by RAM Engineering, a division of Intertek, determined that lead exposure to a child would be minimal, less than the amounts allowed in food.”

It’s sort of cute that LC attempts to reason with the CPSC. Darling, really. I applaud them for stating sensible reasons to exclude brass bushings. Of course, their common sense falls on deaf ears. The staff responded this way: “In this case, given the assessment provided by the requestors, the staff likely would have concluded that the estimated exposure to lead from children’s contact with the die-cast toys would have little impact on the blood lead level. Accordingly, based on the staffs assessment, the staff would have recommended that the Commission not consider the product to be a hazardous substance to be regulated under the FHSA. However, the CPSIA establishes the standard by which the staff evaluates the materials submitted with a request for exclusions. . . . Since contact with the toy could result in absorption of lead, however small the absorbed amount, the staff concludes that the statutory standard has not been met.”

I feel like humming the tune that they used to play on Bozo’s Circus when you missed the last bucket on the Grand Prize Game. Wah-wah-wah, too bad! Too bad, indeed.

Why on Earth do I care about this? The unfairness of the application of this law to Learning Curve affects all of us. We don’t happen to make brass bushings, but then again, we do use connectors of various kinds, like staples, screws, nuts and bolts. Many people use these items in their products innocently enough. Connectors are not regulated EXCEPT for their inclusion in children’s products. I would note that I have NEVER seen a single article directly or referenced that suggested that connectors present a HEALTH DANGER to anyone. Likewise, any deaths or injuries attributable to poisoning from brass in any form. Don’t stick connectors in your eye or eat them, and I think you are going to be fine.

Some connectors have brass content in them (horrors!). Does this matter? Only under the awful CPSIA. Why do I care? Some random and terrible results are possible when connectors become the subject of CPSIA disputes. Let’s not forget that the CPSIA criminalizes any “intentional” violation of the law. Thus, it is now IMPOSSIBLE to work out any issue between supplier and customer, no matter how trivial. The law incentivizes customers to turn in their suppliers. [When I consider this dynamic under the CPSIA, I always think of historical precedents where governments turned one part of the society against another, with terrible results. I am sure you are aware of the parallel. Why isn't anyone bothered by this besides me?]

The law also incentivizes the CPSC to not forgive these “transgressions”. Why won’t the CPSC just overlook these issues, using “enforcement discretion”? The reason: apparently, the CPSC has no taste for “defiance” these days. They defend their practices (off-the-record) by noting that they are only imposing a “no-sale” requirement on such inventory. [Remember the Potato Clock?] This “innocuous” position is usually accompanied by a demand that suppliers notify their dealers of the “no sale” requirement. [In the case of the Potato Clock, I believe the company felt it might incur liability if it didn't tell dealers to stop sale. More of the same.] While this is short of a full-scale recall, it is tantamount to financial Armageddon for many small companies, and has the potential to kill brands.

Am I just a worrywart? Well, this is same CPSC that just allowed or demanded a recall of 40 inflatable baseball bats for a phthalate violation. Good thing they stopped short of a house-to-house search, that showed GOOD JUDGMENT. You can hold 40 inflatable toy bats in one hand (if uninflated). So nothing is apparently beneath their scrutiny. In this case, they can shrug off the consequences of their actions. After all, they are “just doing their job”. How satisfying for them!

In any event, the Learning Curve exclusion request is a loser. Get ready for more rationalizing from some Commissioners and hand-wringing from others. We should have a pool for when the new Democratic leadership of the CPSC will stand up publicly and call for needed change in this law. Your guess is as good as mine.

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CPSIA – Learning Curve Begs for Common Sense (What a Joke)

CPSIA – More Victims (Am I Boring You Yet?)

I received a phone call on Friday from a reader of this blog who, among things, wanted to report to me that she is losing suppliers at a rapid clip. Why? She makes hair bows and barrettes for kids. [She recently branched into dog hair bows because it is outside the CPSIA reach and might be a viable business after the rest of her business craters thanks to Mr. Waxman. Where have we heard this strategy before, namely leaving the children's product market to escape the penal reach of the CPSIA?] She decorates her bows and barrettes with various doodads like buttons and other shiny bling. It turns out that her suppliers of buttons and so on have no interest in paying for testing for or compliance with the CPSIA. They tell her, “Listen, these things aren’t intended for kids. We are not subject to that law and refuse to test. If you don’t like it, buy someone else’s buttons (etc.).” That rules them out as suppliers because she can’t afford to test. Each such answer creates yet another off-limits supplier and supply item.

I wish I could say any of this is surprising to me. In fact, it is not. I spoke about this particular subject ONE YEAR AGO at the CPSC on November 6, 2008. Here’s the video that segment of the speech:

[The first and third parts of this old speech are also worth watching. Old but good. I stand by the speech, although some minor things have changed since then.]

This subject is rather relevant right now. Hey, CPSC, are you actually considering market feedback on your component testing concept? I have made numerous points about component testing and hope you are listening. Here’s another one (it’s a repeat but please think about it anyway): IF you give us “relief” by allowing us to use the tests provided by our suppliers, what are you going to do to force suppliers from outside the market to provide test reports? How will your rule provide relief to Ms. Barrette above? This problem is EXACTLY what I highlighted last November. If component testing won’t solve her supply problem for her, it won’t work for me. And, PLEASE, watch my video above and take note of the various other testing fantasies that component testing WON’T resolve. As I have said innumerable times, test reports do not equal safety. Supply chain management and risk assessment does. In this case, your wonderful CPSIA has gaps in it that make full and compulsive compliance impossible. The casualties are mounting.

As noted by others, we need the CPSC to stand for safety, not for the CPSIA. There is a consequence for the passage of time. Please do not assume that your efforts to clarify the law over a yawning 18-month period won’t have a very real cost to those of us left in the children’s market. And you are responsible for that cost.

It’s time to tell Mr. Waxman and his buddies over in Congress what’s wrong. Please don’t kill us while you work up the nerve.

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CPSIA – More Victims (Am I Boring You Yet?)

CPSIA – Rumorville CPSIA Casualties

We recently spoke to a candidate for a customer service position here who works for a nationally-prominent brand of toys. This brand is a division of a large and well-known company, and is renowned for its high quality and expensive products. You have heard of this brand. What we were told was that they are suffering from widespread backorders owing to the CPSIA. The explanation we were given is that the factories were refusing to take risk under the new law and that the brand itself was cancelling a wide range of accessories sold with their principal products. [This brand is well-known for the nicknacks it sells to accompany its flagship products.] The accessories cannot carry off the testing costs, largely because they are low -volume items, and neither the famous brand company nor the factories will bear the new testing costs. No doubt some of the problem is also an inability to meet the demanding new standards.

The candidate did NOT tell us that these discontinued products were unsafe or had ever hurt anyone. Hmmm – no apparent issue with safety, amazing! And you thought the new law was NECESSARY to keep everyone safe. It turns out that a number of these products are found in my home and I can say from personal experience that they are of the finest quality and deserve their reputation for outstanding design and strong educational content. Shame no one will be able to buy them anymore.

Boy, Mr. Waxman has really made life better for everyone! Obviously, there’s no reason to change THIS law.

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CPSIA – Rumorville CPSIA Casualties

CPSIA – CPSC Recalls 40 Inflatable Bats for Phthalates

I know I am crazy, over the edge, worrying about a CPSC so hellbent on enforcing the awful CPSIA that it will chill the market and kill products and companies that are essential to those markets. I know I have a reputation . . . .

Well, consider this recall today: a California company agreed to a recall of 130 pieces of several toys, including an inflatable bat stenciled with “Home Run” on it. The bat was offensive because it violated the phthalates standard. A recall of 130 pieces spread over several toys, means that they must be recalling less than 130 pieces of the inflatable bat. So I called the company (Daiso Japan) and asked them exactly how many bats were involved – the answer? Forty. Feeling safer already?

This is a rather strict standard . . . and completely disproportionate to any conceivable risk. Phthalates do not “ooze” from toys – they must be mouthed and chewed. The CPSC knows this – their own CHAP examined this question and their own scientists participated in “chew tests”. So, in choosing to expend resources on a recall of 40 pieces of an inflatable bat that is clearly not intended or likely to be mouthed, the CPSC is imposing a strict liability standard with no apparent threshhold for recalls – one unit is enough to justify this public humiliation.

This is asinine, of course. How do you expect the business community to react to this development? Well, for one thing, they will overreact. I anticipate that our customers will demand that we prove that everything we make is phthalate-free, toy or not. This means expensive tests to prove that we have not used an additive not found in nature. [It's an ADDITIVE - it will only be there if added.] The application of this rule by the marketplace to every product, whether or not subject to the ban, means that more of our items will lose marketshare simply because we cannot afford to test them to prove we were compliant. The cull of items will accelerate.

This turn in the market will dramatically increase our costs. At this point, we have seen cost increases in the range of 12-40%. Perhaps those surcharges will fall over time, but right now, that’s a pretty hefty chunk of lost profits. The impact will be lower revenues as products are dropped and volumes decline in the face of forced price increases. Price increases in a weak market is not a winning strategy.

Another factor will be fear. Companies will look at this development, connect the dots with the penalty-happy posture of this new CPSC, and realize that any misstep is subject to dramatic punishment. They will pull into their shell – or leave the market. This is called a “chilling effect”.

And what will be achieved? Recalls of less than 130 pieces is pointless from a safety standpoint. The presence of phthalates in a toy is not tantamount to devastating injury, even if banned. The CPSC used to tout its “enforcement discretion” but apparently has no intention of using it here. Even so, the use of phthalates in a baseball bat is hard to link to injury under any rational standards – baseball bats are not teethers. Ergo, there are no rational standards. “Common sense” at the CPSC is a sound bite only and a pathetic figment of the marketers’ imagination.

Enjoy! You can thank the Congressional Democrats for all the good this is bringing to your life.

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CPSIA – CPSC Recalls 40 Inflatable Bats for Phthalates

CPSIA – Video Blog "Time is Running Out"

]Pardon the “weekend look”.]

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CPSIA – Video Blog "Time is Running Out"

CPSIA – Californization Continues

On September 29, the EPA’s top administrator announced that the Obama Administration would announce the long-awaited amendment of the Toxic Substances Control Act. This announcement came in a speech in San Francisco, the home of all good regulations. The Scientific American states: “As a result, she said the Obama Administration will promote a new chemical law in Congress in the coming months that puts the responsibility on industry to prove that its compounds are safe.” Sound familiar? The EPA also announced a new investigation of phthalates, perhaps attempting to blunt any effort to discredit the ban in the CPSIA.

In another “Brave New World” quote from the article featuring the not-enough-government, not-enough-regulation official: “‘As more and more chemicals are found in our bodies and the environment, the public is understandably anxious and confused. Many are turning to government for assurance that chemicals have been assessed using the best available science, and that unacceptable risks haven’t been ignored,’ Jackson told an audience of several hundred people during a speech at the Commonwealth Club in San Francisco on Tuesday night. An audience member asked if the EPA would add the right of citizens to sue for non-compliance of the law, a provision that lies within the Clean Water Act. ‘That’s a great idea,’ she said, and ‘it was certainly something to consider.’” [Emphasis added]

Hey, Chemical Industry – welcome to our misery! Why don’t you embrace this change with enthusiasm – appeasement really worked wonders in the case of the CPSIA.

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CPSIA – Californization Continues

CPSIA – Tenenbaum Doesn’t Know What Testing Costs

At a public meeting this week on September 30 between Chairman Inez Tenenbaum and representatives of the NSSEA (National School Supply and Equipment Assocation, http://www.nssea.org/ ), Ms. Tenenbaum related her belief that a lead test costs “$35″. This is consistent with propaganda put out by consumer groups. I recently wrote about a representative of WashPIRG who contends that testing costs are as low as $75. Yet, I have documented testing costs FAR higher than this. Who is right? I would like to report that the rumored $35-$75 lead tests is RIGHT . . . and WRONG. As the linked test quotes and invoices indicate, our (recent) cost for a lead test (plastics) is $75, less our 35% discount ($49). The cost of a lead test (metal) is $90 less discount ($59). Since I know you are curious, flammability is $70 less discount ($46), physical and mechanical is $245 less discount ($159) and phthalates is $350 less discount ($228). You will notice that these prices are not firm, and vary from one invoice and quote to the next. That said, it’s close enough for government work, as they say . . . . If the individual test cost was all we needed to know, Ms. Tenenbaum might be completely right, at least directionally. But she’s not. Of course, unless you use only one material in your product, you will have to pay for more than one test. Normally, this adds up to quite a few tests for a single item. I have summarized the test details below for the attached test quotes and invoices. As you will see, the tests required per item range from 9 – 121 lead and phthalates tests. [This ignores the miscellaneous tests and charges. You will note, by the way, that one of the attached invoices include a $101 charge to confirm that our tracking label was compliant. Good work if you can get it, I guess . . . .] The notion that testing costs are $35 is pure fantasy, Ms. Tenenbaum. The world is more complicated than that. Amazing, it turns out that what I have been saying since November is right! Shame that no one at the CPSC or Congress was listening. See the data below: Telescope: 24 lead in substrate 23 lead in substrate (metal) 26 phthalates (7) Cost: $8,635 [I am reporting only the quoted or invoiced test costs. There will other, significant costs, associated with these test reports. In the case of the telescope, we have to give 23-24 samples ($2600) plus spend at least $500 on FedEx costs. I have also omitted the smaller tests, to keep this essay focused. You are welcome to examine the test data linked above.] Pretend & Play Bakery Set: 9 lead in coatings 22 lead in substrate 21 phthalates Cost: $5,350 Let’s Tackle Kindergarten: 5 lead in coatings 30 lead in substrate 5 phthalates Cost: $2,397 Talking Microscope: 6 lead in coatings 20 lead in substrate 41 phthalates Cost: $3,678 Playfoam Creativity Set: 56 lead in substrate and coatings 34 cadmium 31 phthalates Cost: $6,483 Busy Pets: 3 lead in coatings 21 lead in substrate 7 phthalates Cost: $2,114 Jumbo Animals: 24 lead in coatings 22 lead in substrate 12 phthalates Cost: $3,565 Healthy Food Set: 11 lead in coatings 35 lead in substrate 48 phthalates Cost: $5,973 Trail Mix & Match: 12 phthalates Cost: $1,714 Over & Under The Sea Mat: 9 phthalates Cost: $1,130

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CPSIA – Tenenbaum Doesn’t Know What Testing Costs

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