The Consumer Product Safety Act, or CPSA, and legislation like it, makes it a crime to sell products that are the subject of a safety recall. Nonetheless, that is precisely what the U.S. Consumer Product Safety Commission, or CPSC, says that retail giant Best Buy did between 2010 and 2015. The retailer recently agreed to pay a $3.8 million penalty to the CPSC for breaking the law.
The CPSC accused Best Buy of continuing to sell 16 products even after those items had been recalled. Ranging from cameras and laptops to dishwashers and electric ranges, each product posed a safety hazard. A recalled dehumidifier sparked a fire after being sold by a Best Buy store years after it should have been quarantined from sale. Given the more stringent clauses of the CPSA, which was amended in 2008, it was only a matter of time before the CPSC took notice.
Best Buy stated that they had a recall system in place during the 2010 to 2015 period. However, the CPSC found that Best Buy’s system for finding and getting rid of recalled products was ineffective. Among the findings, the CPSC says that the Best Buy system failed to permanently block product codes for recalled items. Additionally, some of those product codes were reactivated or the system functions that should have prevented a sale were overridden.
In addition to paying the $3.8 million penalty, Best Buy must also set up a much more robust system for identifying recalled products and preventing them from being sold. This system will include an internal component of controls and procedures as well as an element that requires reporting information to the CPSC.
Best Buy’s experience serves as a cautionary tale for all retailers. The CPSC is growing increasingly vigilant about enforcing the CPSA, and that means that more companies are going to see large penalties being levied against them. It is more important than ever for retailers to understand the CPSA and to stay informed regarding current government and manufacturer recalls. Working with an experienced business attorney is one of the best ways to ensure compliance.