ACCC: Product Recall & Xtava LLC's Material Recall - Essay Sample

Introduction

According to the Australian Competition and Consumer Commission (ACCC) (2015), product recall entails the process whereby manufacturers retrieve dangerous, unsafe, and defective goods after realizing that they may be harmful to consumers. In many cases, the affected consumers are compensated, refunded, or given other safer products. Xtava LLC, a Chinese company based in New York, selling consumer goods is an example of a firm that has had a material recall within the last five years.

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The first procedure that a company should follow in the process of recalling a potentially unsafe product is to inform the production and quality, control manager (Schneider et al., 2018). Once a defect in a consumer good is detected, this information should be relayed immediately to these organization's officers who should then undertake a quick internal investigation to decide whether the product needs to be recalled. The product investigation at the organizational level also enables the manufacturer to determine the appropriate classification of the level of safety of the product. Recalls may be classified as class I to III recall.

The next process in the product recall process is the convention of a recall committee. After classifying the recall in terms of the priority involved, the quality control manager should establish a committee that will then spearhead the recall process by coordinating the recall activities (ACCC, 2015)). However, where the manager determines that the recall does not fall under any of the three classifications, then they need not form a committee. The recall committee will then decide regarding the best technique for handling the recall based on the company's recall guidelines. The next process is to contactin the relevant government agency, such as the Food and Drug Administration (FDA) and the National Highway Traffic Safety Administration (NHTSA) to inform or notify them about the defective consumer goods (Schneider, 2018). The agency will then inform consumers about the defective products and have them recalled (ACCC, 2015). The last process involves manufacturing company compensating the affected consumers, takin other damage control measures, and disposing of the unsafe products. The organization should also strive to find the cause of the product recall and fix it to prevent future recurrence.

A company that sells consumer goods and which has had a material recall within the last five years is Xtava LLC. On August 15, 2018, the company was forced to recall its Allure and Allure Pro hair dryers after it detected that this good could overheat and explode, hence posing electrical shock, burn, and fire hazards to users of the dryers. According to the Consumer Product Safety Commission (CPSC) (2018), close to 235, 000 of this material were recalled because they posed the risk of burning to consumers. In recalling the goods, Xtava followed the recall process by first receiving complaints and reports of the overheating and explosion of the hairdryers from users of the devices. The manufacturer than acted on the complaints by conducting internal investigations. The notification enabled the company to formulate a recall procedure and the best ways of retrieving the affected products (CPSC, 2018).

Xtava LLC also formulated a recall plan or strategy after identifying the consumer product safety hazard in the hair dryers based on data collected from consumers, retailers, and within the company. Thereafter, Xtava contacted and notified the CPSC which then notified the retailers of the products including Walmart, eBay, and Amazon to inform them of the defects in the hairdryers and asking them to immediately withdraw the products and remove them from their shelves. The company and the CPSC also proceeded to advise consumers of the products to stop using them immediately. Xtava then offered a free replacement for the affected consumers, both online and offline.

References

Australian Competition and Consumer Commission. (2015). Consumer product recall guidelines: What a supplier should do when conductin a product safety recall. https://www.productsafety.gov.au/system/files/Consumer%20product%20safety%20recall%20guidelines.pdf

Consumer Product Safety Commission. (2018). Xtava recalls allure hair dryers due to fire, burn, and electrical shock hazards. https://www.cpsc.gov/Recalls/2018/xtava-recalls-allure-hair-dryers-due-to-fire-burn-and-electrical-shock-hazards

Schneider, K.R., Schneider, R. G., Archer, D.L., Danyluk, M.D., Baker, G.L., & Thomas, C. (2018). The food recall manual (ver. 2). IFAS Extension University of Florida. https://edis.ifas.ufl.edu/pdffiles/FS/FS10800.pdf