Office of
the Secretary
Consumer
Product Safety Commission
Room
502
4330 East West
Highway
Bethesda
, Maryland
20814
Re: Tracking
Labels
Dear
Sir,
We are replying to the
request for comments published in the Federal Register on February 26, 2009 on
the implementation of Section 103 of the CPSIA (see http://cpsc.gov/businfo/frnotices/fr09/trackinglabels.pdf). You have asked for
comments on several specific topics. I have responded to your questions below
but provide general comments first.
I would note upfront
that of all the provisions in the CPSIA that I consider dangerous and
ill-conceived, the tracking labels provision has the greatest potential to wreak
economic damage and induce unmerited market restructuring. This provision alone
may bankrupt companies and wipe out entire product lines, all without improving
children’s product safety. I call on the CPSC and Congress to stay the
implementation of this provision indefinitely to allow for public hearings and
reconsideration of this requirement. If the CPSC and Congress proceed with
implementation of Section 103 as planned for August 14, 2009, accountability for
the irreversible damage inflicted over industry warnings will rest with the CPSC
and Congress. This terrible outcome is avoidable by brave action taken in
advance. Please table this provision pending development of a sensible
risk-based alternative.
General
Comments:
a. Children’s
Product Industry Safety Record Makes Tracking Labels VERY Wasteful. Our
company is not unlike most participants in the market, having had virtually no
recalls over the years. Notably, recalls for lead-in-paint in children’s
products (all markets) during the historically high recall period of January 1,
2007 – January 30, 2009 (25 months) involved only 87 companies (125 recalls
total). See analysis in http://learningresourcesinc.blogspot.com/2009/02/cpsia-dont-believe-consumer-groups-snow.html.
Given that many thousands of companies trade in children’s products in the
U.S.
economy, this data confirms that
only a miniscule fraction of all children’s product companies generate recalls
in any given year. Of the 125 recalls for lead-in-paint during the subject
25-month period, one company was responsible for seven recalls, two companies
had five recalls, three had four recalls, three had three recalls, nine had two
recalls and the remaining 69 companies had one recall each. Many of these
recalls were self-induced as the companies turned themselves in as a result of
self-policing. In addition, the CPSC exercised no discretion in implementing
recalls for the many hyper-technical lead-in-paint violations during this period
(see the remarks of Nancy Nord on February 16, 2009 at the New York Toy Fair),
thus inflating the apparently dramatic recall
figures.
The new requirement to
place tracking labels on our products will have a devastating impact on our
company and our investment decisions going forward, all without any impact
whatsoever on safety or the effectiveness of recalls of our products (if
any). We built a strong track record of safety administration in the 25 years
since our founding (not by accident), and with the stringent new rules of the
CPSIA, the tiny risk of a recall of our items is further reduced. For
perspective, please note that I estimate that our company has produced and sold
between 750 million and 1 billion units since our founding n 1984. In that
period of time, we have had ONE recall of 130 pieces. In that case, we
identified the customers who had purchased the recalled items using our computer
inventory tracking system, called them each individually and recovered ALL of
the recall units. We did this without the use of tracking labels. Please note that these figures suggest that the
expected recall rate for our products is approximately 0.00001%. How
much should we spend to improve recall effectiveness if the risk of a recall
over a 25-year period is 0.00001%? Nothing, of course. If we spend 0.5% of
revenue on tracking labels under an implementation of Section 103 (as
anticipated), the labeling cost would exceed the annualized cost of recalls by
50,000:1.
If the tracking label
provision is enforced against our company, we will incur SUBSTANTIAL incremental
expenses which will NOT improve our safety performance. Notably, the labels
CANNOT POSSIBLY improve our recall effectiveness. As demonstrated above, the
VAST MAJORITY of newly-regulated children’s product companies have NEVER HAD ONE
RECALL for any reason. If far less than 1% of children’s product manufacturers
have a single recall in a five-year period, the cost for tracking labels cannot
be justified, ESPECIALLY in light of the undocumented benefit of improved
recalls (namely, injuries expected to be avoided). There is
simply no way the cost and benefit of tracking labels match or relate favorably
for consumers or anyone for that matter.
Notably, like so many
aspects of the CPSIA, the imposition of the tracking label requirement
indiscriminately without consideration of quantifiable risk causes major market
distortions. While I am all in favor of "improving recall effectiveness"
(whatever that may mean in this case), the cost of more effective recalls should
be evaluated against the ACTUAL impact of ineffective recalls. In some cases,
where the risk to life is severe (perhaps a good example is cribs or playpens),
labels may make sense because consumers and resellers need an easy way to tell
which items should be set aside. This reasoning would not apply indiscriminately
to other categories of children's products. Improving recall effectiveness will
come at a cost, and if there is no actual societal benefit to the change in the
system, the cost of the changes will be pure cost to all of
us.
I would note further
that most items can be easily identified without tracking labels. It is also
true that many items are made by only one source, and in fact, many small
companies have few sources. Knowing the brand name is sufficient in those cases
to identify the source. In addition, many companies (like ours) use
sophisticated warehouse management/inventory-tracking software which provides
comprehensive control over manufacturing lots. This software helps manage
recalls quite effectively. For instance, in the above recall situation, we were
able to quickly identify all at-risk transactions using our tracking
software. Tracking labels would not have improved and might have reduced the
effectiveness of that particular recall.
b. Use Enforcement
Discretion to Table or Sharply Restrict the Tracking Labels Requirement.
Given the assertion by the CPSC of its broad "enforcement discretion" in
granting a permanent stay of enforcement on the ATV industry, I call on the CPSC
to use its "enforcement discretion" to permanently stay the tracking label
requirement and to redeploy it only in those instances where a clear connection
to public safety and prevention of injuries can be made. In the case of our
company, with our strong record of safety administration, the nature of our
products and their excellent and consistent track record for safety, the
application of the tracking label requirements is both wasteful and will distort
our economic decision-making. The CPSC should waive the requirement in all
cases where there is no demonstrated need for labeling to protect the public. To
do otherwise is to sacrifice the small business community to these overreaching
and unproductive requirements.
c. The Tracking
Label Requirement Will Kill Many Innocent Items Produced by Small Business.
The cost of administration of tracking labels will be enough to cause a MAJOR
culling of specialty market items. For instance, with more than 1500 items in
our current product line, the complexity of the undertaking at our company is
simply breathtaking. The impact of tracking labels falls disproportionately on
small businesses using small runs to service niche markets. When the expense of
tracking, retaining and managing lot information, managing and implementing lot
markings, inspecting shipments at factories and at the destination warehouse,
rehabbing incorrectly labeled items, training and supervising internal staff and
the supply chain simply on tracking labels and the potential liability attached
to errors or administrative failures, is considered and added to the cost of
small run products, it seems likely that most small businesses will be cutting
their product lines. It is also likely that many large businesses will feel
similar pressures to reduce product ranges and possibly exit entire
markets.
Arguably, the tracking
label provisions can only be managed by companies using only large production
runs (make-to-order, rather than make-to-stock) or selling very limited product
ranges (50-100 items only). Only under these circumstances is the complexity and
cost of tracking labels even slightly controllable. Companies meeting this
criteria usually cater to the mass market. Small businesses and start-ups do
not typically use large production runs which can bear the expense of tracking
labels. Whereas a large company can fairly easily manage the labeling
requirements on a P.O.-by-P.O. basis efficiently, small businesses will bear a
skyrocketing burden as they attempt to serve the specialty market.
d. The Tracking
Label Concept GREATLY Oversimplifies the Task. Tracking labels will be a
tortuous process for most companies. Please consider:
1. For many companies with small runs, lot sizes for
different components in a single product may vary. For instance,
boxes and other print items might be produced in 5,000 piece runs or larger to
gain minimum pricing efficiency. If product components are run in different lot
sizes or lots out of sequence (for instance, making new product with old boxes),
labeling will likely be manual and expensive. Some re-labeling may be
required. On some occasions where the finished product itself is made out of
sequence with the packaging, an additional step of matching labels (packaging
and product itself) will be required. This step will likely need to be verified
by statistical sampling at the factory and spot-checked upon arrival, a hugely
wasteful and expensive step that will slow companies down to a crawl. Please
keep the burden of these activities in mind when considered their low potential
value to a company like ours that recalled only 130 pieces in 25 years (none of
which caused an injury).
Small lot
manufacturers, like crafters, work-at-home-moms and companies catering to
special needs, will find the burden of managing the complexity of matching
component lots and handling complex labeling requirements unbearable. This will
also encourage disregard for the law, faking the labels (never changing the lot
number, for instance) or the creation of some kind of black market (selling out
of the trunk of your car or at flea market, rather than through stores).
Forcing small businesses underground cannot be good
policy.
2. Many companies have multiple sources for a single
item. The cost and complexity of maintaining and properly
labeling items with varying sources will be prohibitive (impossible as a
practical matter).
3. Changing labels on each run will be a taxing
administrative process. To change a label on both the product
and the package may require the involvement of product development staff in some
companies or for some products. This will soak up innovation resources to
process administrative details. At our company, since our items vary
considerably (plain and painted wood, plastic, urea, sewn, roto-cast,
injection-molded, electronics, printed, kits, etc.), numerous different labeling
protocols must be developed and enforced to ensure proper labeling with
consistent quality control. We anticipate this effort will require specialized
software at considerable expense. We do not presently own such software and it
may or may not be available on the market. We also anticipate that we will need
to hire, train and retain a full-time staff devoted just to tracking labels.
Given the size of our product line and the frequency of our production runs, we
estimate a need to change at least 20,000 – 30,000 labels every year. That
could be as many as 600 labels per week at our small company. It will be a
nearly impossible task.
4. The task of incorporating lot markings will be new to
many small factories. Small businesses use different factories
than big companies. Not only do small companies serve different parts of the
market, a different supply chain has also developed to serve them. [Please note
that the most notorious recalls in 2007/8 were NOT by small companies serviced
by small factories; the data does not suggest that size of factory correlates
directly to quality.] The shift to tracking labels with this manufacturing base
is likely to be a rough one. For instance, our supply chain has never had to
change each of our products lot-by-lot. We have not selected our factories for
this skill set and do not know if they can manage a process like this. No doubt
some of our factories will fail to be good partners for lot markings. The
transition to tracking labels will be disruptive to our supply chain, and will
be quite expensive. It cannot be done in a short period of time. Even a one
year lead-time is unrealistic.
5. Many items which are sold safely and appropriately in
the U.S.
have ambiguous or unknown
sources. Items obtained through trading companies often have
intentionally-obscured origins. In addition, just as many importers present
themselves as manufacturers, some factories present themselves as manufacturers
but are actually trading companies. As a practical matter, it is not possible
to identify the manufacturer in many cases. In other cases, the origin of the
item may be impossible to identify because it is a fungible commodity (think of
aluminum foil, table tennis balls or paper clips). With multiple sources
possible (or even mixed together in one box), it may be impossible to properly label
items in compliance with the rules. Finally, some items may be sold as
"children's products" under the CPSIA definition although they sell freely in
the general economy without regulation. For instance, tape measures sold at
Home Depot might also be sold as educational materials. Likewise, Reynolds
Aluminum foil sold at the grocery store without labels might be sold to schools
for science experiments. Labeling common items will be impossible because the
sources for such consumer goods are unlikely to cooperate, based on our real
world experience. As a consequence, many resellers will have to choose between
breaking the law and dropping important supply items. This phenomenon will
hammer the school business, among others.
6. Many items have numerous small parts that cannot be
marked. A set of blocks cannot be easily marked, for instance.
This will slow down many marketers of children's products. In some cases,
labeling might even impair the ability of the item to function
properly.
7. Production runs do not always have a clear
“date”. For instance, production runs can stretch over several
days or occur in several places at one time. In other cases, production can be
done separately for various components, and then simple assembly (put item in a
box, for instance) may occur at another date. If the basic item is made at one
time but assembled into boxes on several occasions, tracking labels may set out
misleading information if the assembly date is shown. Or, if assembly is
somehow done wrong, the date would be misleading if keyed off the production
date of the basic item. This creates a real dilemma for small businesses. Other
permutations may also be troublesome.
8. Owing to the presence of various components in each
item, the tracking label requirement will quickly devolve into an implicit
requirement to track components back to its source for each production
run. This kind of recordkeeping is WELL BEYOND most companies'
capabilities (small or large). In any event, the low value of most children’s
products means that there won’t be enough profit to support the development of a
recordkeeping system more appropriate to Boeing or Lockheed Martin. It is also
well beyond the capability of most of our factories as their computerized
automation will not accommodate this kind of complexity. The Dickensian
requirement to track such excessive and ultimately useless data will strongly
discourage start-ups in children's products and will cause many, if not most,
children's product companies to transition away from serving the children's
market. This will happen over time as the burden becomes clear to most
companies. Niche markets like Education will be crushed by such negative
incentives. This has already begun to take place in the thrift store market, as
many thrift stores are refusing to sell children's products to avoid the risk of
litigation or fines. Like the thrift stores, the rest of us will react to these
new costs and risks by adjusting our businesses to the new conditions. In most
cases, controlling costs under the CPSIA will mean exit.
9. Many important children's products, especially in the
education field, are kits that present special labeling
challenges. Labeling kits with many components will be a
nightmare and will constitute competitive suicide. Consider a kit with 50
components. For such a kit, we might have to list each source on the packaging
and possibly mark the same information on the master carton, providing a
wonderful competitive roadmap to our customers or competitors to save money or
to steal business. In addition, we might have to label EACH component in the
kit with its source. See above for the many challenges that confront kit makers
when they try to label the components. If a 50-component kit requires labeling
on a component-by-component basis, the biggest single expense in packaging a kit
may turn out to be labeling. The cost of such kits will skyrocket to pay for
wasteful labeling activities that have never proven necessary or desirable since
the United
States
was founded in 1776, or in any other
industrial country that I am aware of. With the anticipated increase in cost, I
believe many such kits will be discontinued.
10. Some items are sold in bulk and have no
packaging. These items do not fit within the rule and need to be
excluded. Some items are packaged for retail and then broken apart for retail
in bulk at the store level, too.
11. Some companies market natural materials (such as
rocks) as children’s products, creating unique difficulties.
Companies marketing natural or live materials like clay, plants, insects or
animals (or dead materials like frogs for dissection) to children will not be
able to document origin (where did that clay come from, or that frog? What is
the origin of the granite specimen?) or easily label the specimens. Needless to
say, labeling an ant, a tomato plant or rocks from several locations is
absurd.
e. Manufacturers
Can Accurately Assess Cost and Benefit of Tracking Labels, In our case, with
130 pieces recalled over a 25-year period, we believe it is in our economic
interest to (i) keep making safe products through strict control of our supply
chain and other quality control measures, and (ii) take the risk of having to
recall more units than necessary by opting to NOT label our products by lot
number and other co-hort information This is CLEARLY a favorable economic
decision for our company. At no time in our history would it have made economic
sense to label our products by lot to facilitate “more effective recalls”. We
are concerned that the resources devoted to managing a tracking label program
will divert funds from factory inspections or other necessary quality control
efforts designed to ensure the safety of our products. Other than situations
where labeling is clearly needed to prevent likely injury, the manufacturer is
best situated to make this judgment. In some cases,
manufacturers have used serial numbers to create their own quality monitoring
system where necessary or desirable in pleasing customers or building a brand.
We believe the market will operate to provide incentives to manufacturers to
reduce costs through labeling, if tracking labels actually adds
value.
f. A Requirement to
Disclosure Factory Identity In ANY Form Will Kill Companies. The identity
of sources is critically-sensitive and confidential data in many
cases. Maintaining confidentiality on that information is essential for any
private labeler. If private labelers must reveal their ultimate source, their
brands will be severely damaged or even destroyed. I note with a sense of dread
that senior CPSC enforcement and legal officials announced at the 2009 ICPHSO
meeting that the CPSIA requires disclosure of sources in a form that consumers
can access. In particular, I recall one CPSC official advising the large
assembled group of businesspeople to get past their “mourning process” over
disclosure of this confidential data. I certainly hope the agency will
reconsider this terrible decision. It is not unknown for large customers to buy
certain products with the seeming idea to develop their own version if sales are
good. This process will be greatly accelerated if not shortcut by the
disclosure of factory identities. Likewise, competitors will feast on the
factory identities to reverse engineer deals or steal business.
Were the CPSC to
proceed to implement a rule requiring that confidential sources be disclosed AT
ALL, the rules of the game would change forever in the Children's Product
market. This rule would be experienced as a cost by market participants. That
is, manufacturers would discount their ability to capture or retain large
accounts for any item they didn't make themselves or make in a controlled
factory. In most cases, without the large volume accounts, these products would
no longer make economic sense and would be dropped or would never come to
market. Interestingly, many companies do good business selling open market
items under their own name. [Think of tape measures.] Clearly if there is
enough demand to fuel sales for so many private label open market items, this
activity must meet a real market need. If the CPSC imposes a disclosure rule
governing factory identities, most of this economic activity will end and that
market need will go unfulfilled. It will be just too easy to steal sources and
the incentive to bring these open market items to the children's market will so
greatly reduced as to kill the market. This will benefit NO
ONE.
g. Confusion over
Labeling Will Cause the Market to SHRINK. I have already heard of one
school electing to teach geology using posters rather than rocks over concern
about CPSIA compliance. No amount of explaining and hand waving was able to move
the school off this decision. Whether or not the school should have had legal
worries about the CPSIA, they did in actual fact and the students in that
district will now learn about rocks from a piece of paper rather than from
specimens. This obviously inferior method of teaching will no doubt negatively
affect the quality of education. Like it or not, in the real world, the rules
set forth in the CPSIA (including tracking labels) will drive regrettable
decisions downstream. No amount of education or "clarification" will fix this
problem. Imposing a misconceived across-the-board tracking label rule will
result in mass chaos in the market and will damage our schools and our economy.
Without a serious trimming and refocusing of this requirement, the CPSC and the
Congress should be prepared for high costs to our society from a rule with
limited safety upside on any basis.
h. Like Other
Aspects of the CPSIA, the Marketing Intent Implicit in the Definition of
"Children's Products" Will Cause Havoc. Since the intention of the seller
determines whether something is a "children's product" under the CPSIA, it is
clear that there will be commercial "wars" over labeling between manufacturers
and retailers who repurpose items for sale into schools or to children
otherwise. For instance, a marketer could buy pens domestically from a pen
supplier and then offer a service to stencil a child's name on them. [This is a
popular service in the children’s toy and housewares market.] The CPSIA
tracking label obligation will not fall on the manufacturer who produced a pen
for general use. But how will the downstream value-added reseller get the
correct information for the label without the cooperation of the pen supplier
(who may not have it himself)? This type of bizarre problem will close the door
to the sale opportunity - people will not endure the hassle for labels, they'll
find some other way to make money. Unless the purpose of this rule is to end
commerce in children’s products, the problems implicit in heavily regulating
part of the market and leaving the rest completely unregulated will need to be
reconsidered. [In this case, we advocate that less regulation is the appropriate
solution.] The concept of an "intent-based" rule defining the scope of the
labeling obligation is going to shrink the children's market owing to confusion
alone. Despite Congressional cries for greater "clarity", I do not believe this
structural flaw in the law can be repaired by any amount of clarifying by the
CPSC or anyone else.
Your
Questions:
Q1.
The conditions and circumstances
that should be considered in determining whether it is “practicable” to have
tracking labels on children’s products and the extent to which different factors
apply to including labels on packaging.
A1: First and
foremost, the term "practicable" needs to take into account the economics of the
labeling task. If economics are somehow ignored on “public policy grounds”,
small business and niche markets are likely to be crushed, assuming the
provision is taken seriously and both regulators and the marketplace enforce the
provision. If so, important niches served by small businesses will be deprived
of existing products (as suddenly uneconomic products are culled from the
market) and innovative new products (for lack of economic incentive and for the
paucity of start-up businesses). There is a legitimate fear in the market that
the tracking label provision will accelerate a move toward a mass market-only
economy, where choice is limited to whatever the Wal-Mart’s and Toys R Us's of
the world will allow consumers to buy. Small production runs suffer from
dramatically worse economics under this rule, and that economic disadvantage
will tender huge opportunity to the mass market.
I recommend that
"practicable" take into account the production run economics, and that therefore
the implementation only be imposed on production runs of 50,000 pieces per lot
or more. This would have the effect of protecting small businesses, and would
tailor the provision ONLY to those large runs which have the potential to do
widespread harm. [Please do not interpret any
constructive remarks herein about any aspect of tracking labels or
implementation of Section 103 as a form of endorsement. I am unambiguously on
record as opposing implementation of this provision for the reasons outlined in
this letter. Any remark in this letter about how to implement Section 103 is
simply in response to your questions, not an indication of any support for
tracking labels.]
In addition to
economics, I believe there are many manifestations of products that should have
some relief from labeling requirements:
-
Those items where the
all-in cost of tracking labels is more than 0.5% of the landed cost of the item
for that production run. [Ex.: low value items or highly complex labeling
projects]
-
Those items with no
"main" part with surface area sufficient to hold a tracking label without
destroying its function or aesthetics. [Ex.: pens]
-
Those items with
multiple components from multiple factories (kits of various kinds). [Ex.: large
science kits for schools]
-
Those items where the
product and its packaging are produced at different times and in different lots
sizes. [Ex.: many items made by small businesses for niche
markets.]
-
Products comprised of
small parts. [Ex.: Lego’s]
-
Natural or living
materials, as mentioned above.
Re: packaging, as
noted above, kits present a particular challenge in labeling as many sources are
often found in one package. In addition, many finished goods (open market) in
the children's market come from multiple sources, which is usually invisible to
the importer. Accessing this information may be difficult or impossible.
Relations between importers and factories may fracture if this rule is imposed,
as factories depend on "private labels" as much as importers do. It is further worth noting that if the production of
children’s products is made sufficiently arduous, expensive or risky, factories
will stop serving U.S.
importers of children’s good,
thus further accelerating the decline on the
market.
Other packaging
issues:
-
Small facings [Ex.:
bags of dice with a tiny header card.]
-
Temporary packaging
[Ex.: items sold in a B2B market which may or may not be sold to consumers in
the non-retail packaging provided. Often the B2B customer doesn’t want the
seller to know what he is doing with the goods, as the seller may be his
competitor. As a consequence, the manufacturer may sell some items thinking
that they are NOT for resale and find out later that they were sold at
retail.]
-
Items without
packaging [Ex.: play tables may not come in retail packaging at
all.]
I share the concern of
many commentators about the requirement that the label be "permanent". I do not
know what that might mean. A permanent label should mean anything that sticks
with greater durability than a Post-It. Packaging should be allowed to have the
tracking information printed on it (in other words, without a label), and the
product itself should be allowed to provide the information in any "permanent"
means, even if not by label.
Some retailers are
said to be currently insisting on "labels", even when the information could be
molded or painted on the item. This will add additional costs and arguably will
be a worse solution. The requirement by certain retailers for a label is a
by-product of the incomplete rules on this requirement as the deadline
approaches. Action by the CPSC to stay the implementation of the tracking labels
requirement MIGHT get the retailers to back off their varying requirements.
Please note that since this provision can be enforced by EACH State Attorney
General independent of the CPSC, we believe NO action by the CPSC will have the
effect of slowing down the growing body of varying rules on tracking labels in
the market as the retailers compete to exceed the expected requirements to
ensure none of the 51 regulators capable of enforcing this law will take
action. This is creating a truly toxic environment for
commerce.
Q2:
(a)
How permitting manufacturers and
private labelers to comply with labeling requirements with or without
standardized nomenclature, appearance, and arrangement of information would
affect: Manufacturer’s ability to ascertain the location and date of production
of the product; and(b)How permitting manufacturers and private labelers to
comply with labeling requirements with or without standardized nomenclature,
appearance, and arrangement of information would affect: Other business
considerations relevant to tracking label
policy.
A2a: The
manufacturer will be able to determine the location and date of production by
its recordkeeping. Standard nomenclature is not necessary to make the
information decipherable from the standpoint of a manufacturer. There may be
good reason to let manufacturers determine their own form of information as
businesses and software systems will vary significantly among the market
participants. This is purely a data and recordkeeping
function.
Please note that the
location of production for many small businesses and their products won't change
over many years on an item-by-item basis. For many such items, it is sufficient
to note the date of production to identify location. In addition, for companies
like ours, simply tying the item back to internal purchase order records will
definitively identify the location (and date) of production. Notably, the
precise date of production is not nearly as important as the lot identification.
Please note that we are not selling consumable products like candy bars. The
date of production is largely irrelevant data - the only information that truly
matters is identifying the lot, regardless of when it was made. Any information
that would tie a particular unit back to a particular production run is what is
needed to make recalls effective. In addition, consumers will only need to be
able to make this connection for “more effective recalls”. In other words, if
the item has the marking "XYZ" on it and that code is recalled, then a consumer
can positively identify the item using the code. The rest of the data is
irrelevant. Arguably, given the varying levels of education, sophistication and
language skills in our country, a truly comprehensive display of data on
tracking labels might be counter-productive and impair understanding. In my
opinion, the more data provided, the more likely that consumers will be
confused. I would prefer a marking like a serial number which is far less
complex and much more definitive. This system would also preserve
confidentiality of source information which is absolutely critical to preserve
economic incentive.
A2b: Anything that
would allow each manufacturer to use its discretion in designing and using
tracking labels would be quite desirable. As I said, from the point of view of
a manufacturer, the key considerations in a recall situation is identifying
affected units and clearly describing them for its customers and consumers in
general. For many companies, current recordkeeping puts them in a good position
to identify items affected, often by date of sale. [Of course, in the case of
recalls by date of sale, the manufacturer might be required to accept returns
that cannot be distinguished by date of sale or other distinguishing
characteristics like product features, components or colors.]
Q3:
How consumers’ ability to identify
recalled items would be affected by permitting manufacturers and private
labelers to comply with labeling requirements with or without standardized
nomenclature, appearance, and arrangement of
information.
A3: As noted above,
the consumer only needs to be able to identify the item as recalled or not being
recalled. This can be accomplished without the specific co-hort information
apparently required by the statute. A "serial number" style for identifier will
work well for this purpose. I believe food products often use this means of
product identification with great success. The notion that consumers have a
valid, non-abusive use for factory identity information is
unsubstantiated.
Likewise, resellers of
used merchandise, like charities and thrift stores, would be able to effectively
monitor recalls using serial number-style markings.
The location and
appearance of the information might not need standardization if a summary,
serial number-style marking is permitted. Most such markings are usually placed
near the other manufacturer boilerplate information and are not hard to find. I
think the only instance in which some degree of standardization might be
beneficial is if the provision is taken literally and implemented without change
as a form of label.
Q4:
How, and to what extent, the
tracking information should be presented with some information in English or
other
languages, or whether presentation
should be without the use of language (e.g., by alpha-numeric code with a
reference key available to the public).
Tracking information
should be available in only one language to keep costs down. Use of symbols may
be deployed to make the information accessible to people who don't speak
English. We do not believe most of the tracking label information has any value
to consumers other than to identify lots. A simple alpha-numeric code should
suffice for this purpose and eliminate the need for ALL other
information.
Q5:
Whether there would be a substantial
benefit to consumers if products were to contain tracking information in
electronically readable form (to include optical data and other forms requiring
supplemental technology), and if so, in which cases would be most beneficial and
in which electronic form.
Consumers will not
benefit from labeling in the first place and will have no way to access
electronically readable data like a bar code. Requirements that businesses
build a massive Internet-accessible infrastructure for consumers to access night
and day online will kill many small businesses and will throw yet another major
roadblock up for start-up businesses. A provision like this would throttle the
life out of innovation and growth through new company
formation.
Q6:
In cases where the product is
privately labeled, by what means the manufacturer information should be made
available by the seller to a consumer upon request, e.g.: Electronically via
Internet, or toll-free number, or at point of
sale.
As noted above, we
STRONGLY object to the provision of source information to consumers or anyone on
any basis and in any form. Notwithstanding the supposed benefits, required
disclosure of source identity is misconceived and will wreak unprecedented havoc
on our markets. There is simply NO justification for forcing the restructuring
of a massive industry for the supposed benefit of revealing source information
to consumers. If implemented, consumers may gain access to a lot of useless
information but will have no products to buy.
Q7:
The amount of lead time needed to
comply with marking requirements if the format is
prescribed.
A7: I believe that it
is appropriate to allow at least TWO YEARS from the promulgation of final
implementing rules for transition into a tracking label regime, if the agency
elects to proceed with this ill-advised provision, to allow for supply chain
re-training, building of appropriate U.S.-side business infrastructure and/or an
orderly transition away from operating in the children's
market.
Q8:
Whether successful models for
adequate tracking labels already exist in other
jurisdictions.
A8: We are not aware
of any labeling requirement comparable to the CPSIA requirements anywhere in the
world. We are active in over 80 countries presently and have never had to
provide any of the information required by this law in any
jurisdiction.
As a closing note, I
want to confirm that we have identified no reason to believe that tracking
labels will have any material positive impact on safety for children’s
products. We urge the CPSC and Congress to stay this provision pending
development of a more rational and pro-market provision.
Please do not hesitate
to contact me with any further questions. Thank you for considering my views on
this important subject.
Sincerely,
Richard
Woldenberg
Chairman
Learning Resources,
Inc.
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