Product Recall

Product-recall

Product recall is the business practice of calling back faulty consumer products. A company that manufactures or sells a product that is defective or potentially dangerous to consumers has a legal responsibility to take corrective action. This action may include removing the product from store shelves and contacting consumers who have purchased the product. Businesses may ask consumers to return the product for a refund or replacement, or they may offer free repair. Methods of product recall vary depending on the type of product being recalled and the nature of the product’s problem. Recalled products may include such items as poorly designed automobile parts, unsafe children’s toys, or contaminated food items.

Product recalls can cause large monetary losses and significant damage to a company’s reputation. In 2000, Bridgestone/Firestone Inc., a Japanese-owned tire company located in Nashville, Tennessee, announced one of the largest and most expensive product recalls in history. The company recalled several models of tires that were blamed for traffic accidents that resulted in more than 200 deaths and 700 injuries. More than 14 million of the recalled tires had been manufactured since 1991. By the time of the recall, about 61/2 million of the tires were still in use and had to be replaced. Losses associated with the recall, plant closings, and related lawsuits totaled more than $1 billion.