Recalls are basically efforts at limiting liability for corporate negligence. These are requests made to the maker of a batch or an entire production run of a product upon discovery of some issues of safety concern. Corporate negligence can even lead to the imposition of costly legal penalties is recalls are not made in time. Damage to corporate publicity that can result from such corporate negligence is also minimized or avoided altogether by recalls.
Product recalls call forth expenses to be met by the company. Costs relating to the replacement of the recalled product or for the damages caused in its use will need to be incurred. However, such costs are negligible in comparison to the indirect cost that may need to be borne because of the damages caused to the brand name.
The suitable way of proceeding with making product recalls involves complying with the following sequence of steps:
- The manufacturer or dealer of the product makes notification to the authorities responsible conveying their intention to recall a product. Consumer hotlines and such other communication channels are set up. The scope of the recall (the serial numbers or batch numbers of the products recalled) is specified.
- Announcements about the product recall are released on the website of the concerned government agency (in case it is applicable). Such announcements are also to be made in paid notices in metropolitan daily newspapers.
- Some consumer group that becomes apprised of the product recalls also proceeding with notifying the public variously.
- The consumer returning the good in whatever conditions it may be and getting full refund or modification.
The consumer will be compensated no doubt. However, the ways in which the compensation will be provided will be varying with the specific consumer trade protection related laws and will also be depending on the cause of recall. The procedures may be varying too according to local laws.