How To Manage a Successful Product Recall Procedure

By Indeed Editorial Team

Published October 8, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Companies recall products when they notice a defect in its design or effect. It's important for companies to handle product recalls successfully, as defective products can harm a customer's health and the company's brand. If you work in the manufacturing or product design and management industry, it's important for you to understand product recalls. In this article, we explain what a product recall is and why they occur and share six strategies to help you manage a product recall procedure.

What is a product recall?

A product recall is a procedure in which a company must retrieve a product from the market and from consumers who purchase it because of a defect or error in its production. During this process, companies compensate or otherwise convince consumers to trade the products in to ensure the safety of their customers. Product recalls are sometimes voluntary practices of the company that owns the malfunctioning product or is a mandatory action that other organizations, such as the government, require.

Related: What Is a Product Line? Definition and Examples

Why is it important to manage recalls?

It's important to manage recalls properly because it can affect your brand and your customer's health. Because defects in the item may affect the safety of customers, it's important to recall malfunctioning products quickly. For example, a bike company may recall a bicycle if they notice a bolt they used in assembly is ill-fitted and comes loose regularly. Often, a recall can affect both the short- and long-term health of consumers by either having potential side effects that were previously unknown or because it can be an immediate risk, such as glass falling in a batch of food in a factory.

Managing product recalls effectively can also help ensure companies keep good reputations. Using successful strategies for product recalls often allows companies to take accountability for their product and take actions to make amends with customers. This can help encourage consumers to continue purchasing products from the company.

Read more: Company Reputation: What It Is and How To Improve It

Reasons for recalls

Companies typically recall a product to ensure the safety of their customers and the integrity of their brand. There are several reasons why a company may need to recall a product, including:

Lack of testing

If a company releases a product on the market without having it undergo thorough tests, there may be side effects or defects that professionals might have noticed through testing. This can include products that don't undergo stress tests to measure their strength or testing the long-term effects of a product. For example, a company may need to recall food upon learning that if a person eats the food product often, they could develop a health issue unique to that company's recipe. Similarly, a company might recall a car's seat belts if they didn't test their effectiveness in a crash simulation.

Manufacturing mistakes

Another common reason for companies to recall a product is manufacturing mistakes. This can include errors in production such as skipping an ingredient or contaminating a product with another substance. For example, a company might recall their cat food if they discover that the manufacturer accidentally didn't include the chicken in the recipe.

Related: 6 Types of Manufacturing Processes

Substitutions

Substitutions are another type of manufacturing mistake that can lead to a product recall. When a manufacturer substitutes an ingredient for a product due to costs or availability. When companies don't authorize these substitutes, they may need to recall the product later. For example, if a brand that typically uses organically sourced ingredients learns a manufacturer substituted an artificial ingredient, they may recall the product to preserve the integrity of their brand.

Unforeseen limitations

Sometimes a company might recall a product due to some of its unforeseen limitations. This usually occurs when a company rushes to release a product to the market without testing it enough or considering all its possible limitations or uses. For example, if a company releases a pet carrier that includes multiple safety features, but doesn't allow for the pet to get out of the carrier easily, they might recall it to improve the design.

Related: How To Become a Product Designer (With FAQs)

How to manage a product recall procedure

Follow these steps to help you manage a product recall procedure:

1. React quickly

When you notice an issue with a product that could potentially affect the health or happiness of consumers, it's important to react quickly. Quick reactions to product defects allow companies to address the issue before other media outlets. Having a quick response also shows consumers that the company is taking responsibility for their mistake and working to fix it. This practice can help encourage customers to stay patient and understanding while the company finds a resolution.

2. Notify authorities

Once you understand the issue with the product, contact the appropriate authorities. This is usually a legal requirement, especially if it's a food product or a safety hazard. The governing agency of the industry in which your product relates may have specific recall procedures for the company to follow, so be sure to ask about the next steps.

3. Give an explanation

Give consumers an explanation for the recall. It's helpful to share this information in a press release or on the company's social media accounts. Providing a brief and accurate explanation for the recall ensures that consumers understand what's happening and why. This can lead to consumers being more willing to accept solutions such as a product exchange or full compensation.

4. Be available for questions

After announcing a product recall, make time to address customer concerns and questions. This can include sharing contact information in the initial recall announcement, to demonstrate your availability. You may want to set up an email account or messaging system that focuses on recalls to keep the company communication organized. Being transparent and sharing details about the recall can help build customer and company trust, which improves the reputation of your brand.

Related: FAQ: What Are Customer Service Relations?

5. Offer refunds

To take accountability for the product recall and preserve customer relationships, offer refunds for the product. Many companies opt to either offer full refunds or an exchange for a functional product. Offering both of these solutions to customers can help increase customer satisfaction, though in some cases only one is possible to offer. For example, if you recall an older product and have since stopped production, you won't be able to offer an exchange. You can also include this information in the product recall notice.

6. Use product recall insurance

Product recall insurance can protect companies and manufacturers from the costs of recalling a product. Usually, these costs include shipping, disposal and advertising. If the company for which you work has an insurance policy for this reason, contact the insurance company to determine how to make a claim. Product recall insurance is usually helpful in instances where the product recall involves health risks, as these are typically more urgent. If the company doesn't have product recall insurance, skip this step.

Related: Risk Management: A Definitive Guide

7. Reintroduce the product

Once you manage the product recall, start planning on when and how to reintroduce the product to the market. This can include planning marketing campaigns and consulting the product design team to ensure that the reason for the recall won't occur again. Successfully managing product recalls allows companies to maintain their customer base, which can make reintroducing the product easier.

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