Simply Check: A Long Awaited Solution to Recalled Products in the Secondary Market

May 1, 2011 — By

When we read about product recalls in the news, the focus is nearly always on manufacturers, retailers and consumers – what the brand is doing, how stores are responding and how many people were hurt by the product.  However, there is another industry that is severely impacted by recalled products that rarely gets any attention.

That is the Secondary Market. Comprised of stores and individuals who sell secondhand, overstock, out-of-season or liquidated goods, the market is estimated by eBay to be $500 billion worldwide. We estimate that a $180 billion segment of that market is impacted by Consumer Product Safety Commission (CPSC) recalls. It is this segment that carries much of the burden of capturing recalled products as they flow through the marketplace.

The Problem of Ineffective Recalls for Resellers

Historically, 80% of recalled products, about 46 million units per year, are never returned to, or fixed by, the manufacturer.  Many of these items remain in homes and continue to be used until they either hurt someone or are passed on – often via yard sales, thrifts and online marketplaces – without the owners’ knowledge of the potential dangers they hold.

The Consumer Product Safety Improvement Act (CPSIA) made it illegal to sell recalled products, imposing fines of up to $100,000 per product and, in criminal cases, jail time of up to 5 years, for those who do. Keeping unsafe, recalled products out of circulation is, of course, a good thing.  Unfortunately, making sure the products one sells have not been recalled is easier said than done, especially for the Secondary Market.

Secondhand items are most often out-of-box and do not have unique identifiers such as SKUs and UPCs. Even if they did, it is rare for this information to be included in publicly available recall data. Consignors, online sellers, and resale shop owners have been left with no choice but to search every item one-by-one on the CPSC site, which only offers text-based lists, or use online search engines such as Google, which are not optimized for recalls, let alone proving something does NOT exist. (How many pages of results should you check before you can be confident the item has not been recalled? 3, 10, 200?)

Resale shop owners have told us that they spend up to 7 to 10 minutes per product checking for recalls. At that rate, we expect that complying with the new law will cost the Secondary Market upwards of $3 billion annually.

How can we decrease this cost while maintaining the consumer safety benefits that the new law intends? That’s where Simply Check comes in.

Simply Check Addresses Secondary Market Needs

We designed Simply Check to ease the burden and cost of checking items for recalls, and to reward sellers for their efforts with increased sales and customer loyalty.

The simple User Interface combined with image-based results and probability scores, helps sellers to quickly determine whether the items they want to sell have been recalled.  Once verified, Simply Check generates a WeMakeItSafer Seal and a Recall Verification Certificate for each item.

The Seal can be embedded in online listings, or printed onto stickers and hang tags for physical stores and sale-events.  After the initial check for past recalls, the system continues monitoring for new recalls daily and notifies the seller if a problem is suspected.  In this way, if an item does not sell immediately, the seller does not have to worry about rechecking for new recalls.

The buyer can either click on the seal (in online listings) or enter the item number at WeMakeItSafer.com to view the seller’s certificate and, if they wish, drop the item into their own account. At that point, future recall alerts are transferred from the seller to the buyer of the product.

WeMakeItSafer Seals accomplish two main goals for sellers:
1) They signal to buyers (and government investigators) that this is a highly responsible seller who has checked for recalls, and
2) They enable sellers to offer free recall monitoring and alert services to their customers.

In preliminary tests of online sales, listings that include the WeMakeItSafer Seal had ending sales prices that were 4.6% higher, on average, than similar products sold over the same time period without the WeMakeItSafer Seal. While we will be conducting more rigorous testing in the future, these results are consistent with our market research.

Simply put, buyers appreciate responsible sellers and knowing that they don’t have to worry about a product having been recalled without their knowledge – now, or in the future.

Inventory Checker for Larger Sellers

While Simply Check is aimed at individual sellers and resale shops owners who check items individually, we also recognize the problems of larger sellers.  For those who have very large inventories, or who buy lots from liquidators, for example, Inventory Checker will enable sellers to upload entire spreadsheets or manifests to be checked at once.  This tool will be released in the coming months.

Please let us know if you would like to receive an email when Inventory Checker is ready.  You can send your request to InventorChecker@WeMakeItSafer.com

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