Common Misteakes Mistakes Businesses Make When Faced with a Recall5

2

A product recall can have many negative impacts on a business, such

as a loss of productivity, a loss of revenue or even long-term damage

to the company’s public image. With the brand’s reputation already on

the line due to the public nature of recalls, it’s important to make sure

no additional errors that could exacerbate the situation are made.

Below are five common mistakes businesses make during a recall,

including tips for organizations to avoid these common pitfalls.

3

Not Maintaining Focus

Putting normal operations aside for the sake of a recall crisis only serves to further harm an enterprise’s profit margins. A blanket-approach to recall management can often lead to missed opportunities, exhaustion and a prolonged recall process, because on top of a normal workload, employees must also contend with an out of the ordinary situation.

By relying solely on internal resources to handle a recall, companies not only lose revenues associated with the recalled product, but also from other business units whose resources may be reallocated in order to address the recall. To prevent this, businesses should designate an external partner to handle any recalls, in coordination with a specific internal team. This allows a small, nimble, internal team to focus on complying with recall regulations, while the rest of the business operates normally.

Improper Documentation

A successful recall hinges on maintaining proper documentation. Everything from manufacturing and shipping data to consumer complaints and regulatory paperwork needs to be recorded to ensure a smooth recall process. These records need to be maintained over the course of an operation’s life in order to give government agencies an accurate profile of the business.

A company can quickly fall out of compliance and accrue regulatory penalties and fines if even the smallest piece of data is overlooked during the documentation process. This includes business documents stored by vendors and partners.

To maintain compliance with regulations, it’s recommended to establish a records-keeping plan internally and with partners. This way, businesses can easily retrieve information demanded by regulatory agencies and help prove their proactive approach to handling the recall. Keeping detailed records can also help businesses diagnose products with the potential for a recall, and sometimes help limit the scope of a corrective plan when a recall is necessary.

1

2

4

Not Understanding the Potential for Escalation

Recalls are challenging enough, but many businesses also overlook the potential for things to get worse. This can happen when the full scope of a recall isn’t realized at the outset or if a major news event, like an accident or death, takes place. Underestimating the scale of a recall can lead to complications in both managing the recall and protecting the company’s brand from further damage in both the media and industry. For example, if an expanded recall is required after an initial recall is announced, this can dramatically reduce consumer trust in the effectiveness of an organization in addressing product problems in a comprehensive manner.

To address escalation, companies should place additional resources on-call to meet the demand of a suddenly expanded recall. This allocation can help mitigate brand damage and reduce the likelihood that regulatory agencies will levy fines due to negligence.

Stonewalling Regulatory Agencies

Even if the decision for a product recall may seem unfounded, putting up a fight with the Consumer Product Safety Commission or other regulatory agencies is unwise. Public acts of defiance can result in court penalties, fines or greater regulatory scrutiny, and may further hurt the brand’s reputation.

For example, in the automotive industry, there have been cases where an automaker was ordered by the National Highway Traffic Safety Administration (NHTSA) to recall some of its brand models due to safety hazards or risks. In the event that the company chose to stand behind the safety of the models, they not only faced a protracted and hefty legal battle, but were also required to produce a satisfactory explanation to why their cars shouldn’t be recalled, or otherwise face additional fines.

3

4

5

Avoiding Responsibility

Brands and product lines suffer when it appears a company isn’t taking responsibility for a faulty product. When a company avoids responsibility for its products, it can appear as if the company doesn’t care about the well being of its customers. This is untrue, of course, but campaigns by the press and outrage on social media can paint a very different picture.

An active recall philosophy, one where the company goes out of its way to take on responsibility for a faulty product, can be a unique opportunity for a company to improve its brand perception. Typically speaking, most consumers respond positively to organizations that decide to execute a voluntary recall, even in situations where the number of affected users appears low. By taking responsibility for their product’s defect, companies can turn what could be a PR nightmare into a largely positive consumer story.

Not all companies issuing a recall can be as lucky, but with planning, and by working with an experienced recall partner, a company can prove its commitment to the well being of its customers and its desire to adhere to regulations.

5

The mistakes outlined above

are avoidable. With proper

planning and recall expertise,

any organization can maintain

focus on the business, scale

recall efforts and prevent the

recall from enacting long-term

damage on the brand’s public

perception. Partnering

with a recall expert can also

help alleviate the situation and

help ensure business continues

to operate successfully despite

complicating circumstances.

www.stericycleexpertsolutions.comCopyright 2013 Stericycle, Inc., All Rights Reserved

6