Once Is Not Enough

Once a phenomenon limited chiefly to the auto industry, recalls of defective products have burgeoned into a way of business life that affects makers and buyers of all sorts of items--TV sets, toothbrushes, light bulbs, oven cleaners, snowmobiles, power saws, mattresses and cosmetics. Cars still account for a sizable portion of the recalls: from 1966 through the end of February 1975, 45.7 million foreign and domestic autos were called back for inspection or actual repair. But in 1974 alone, 25 million product units other than cars were recalled, according to E. Patrick McGuire, marketing management research director of the Conference Board, a nonprofit research institution partly financed by businesses. He uses a Government definition of recalls that includes not only actual returns of products for refund or replacement but also repairs carried out in consumers' homes.

In each of the next five years, McGuire predicts, the number of recalls will grow by 10% to 15%; and all auto manufacturers, 75% of the television-set makers and more than half of all home-appliance makers will recall at least some of their products. One reason: stiffer Government safety regulations, pressure from consumer advocates and the increasing complexity of many products, which multiplies trouble. "The cost to companies could easily run up to $1 billion a year," says McGuire.

For some companies, a recall can spell financial disaster. For example, the Food and Drug Administration, which also has jurisdiction over radiation-emitting products, recently ordered the recall of 400,000 Panasonic color-television sets, almost 280,000 of which were in the hands of consumers. The FDA suspected the sets of being radiation hazards. To locate and repair the sets could cost Panasonic's Japanese owner, Matsushita Electric Industrial Co., about $11 million, which is equal to Panasonic's U.S. profits for the past several years.

In February and March, the FDA issued recall orders for more than 1,000 cardiac-pacemaker units that are prone to premature failure or that cause too high pulse rates. On a lower order of urgency, the FDA last month announced the recall of 1,600 dozen "Brownie tote brushes," which are toothbrushes made to be used exclusively by Brownies. The item's handle bears the official insignia of this younger order of Girl Scouts but has a tendency to snap in two.

Makers of expensive medical devices and major appliances often get back up to 90% or more of the products that they recall for safety reasons; owners of such items are registered with doctors or manufacturers and are easy to locate. Automobile recalls are successful about 60% of the time. But among the products ordered recalled by the two-year-old Consumer Product Safety Commission--mostly items used around the home--an average of no more than 10% to 20% are ever returned by consumers. Although manufacturers, distributors and retailers are required to notify the CPSC as soon as they learn of a "substantial product hazard," recalls are no longer unusual and are less widely publicized than they used to be--so fewer consumers pay attention.

Trouble Light. Even recall campaigns involving products with defects that could be fatal to consumers have evoked little in the way of a response. In 1974, the CPSC issued a recall order for a $2 "trouble light" distributed mainly by Pennsylvania-based Action Industries. The device, when held a certain way, could electrocute a user, and one already had done so. Action Industries hired a public relations firm to mount a nationwide campaign publicizing the dangers and the recall of the item and offering a full refund. But only 15% of the 145,000 or so lights that had been sold to consumers were returned. The rest either were thrown out or are still in use.

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