Product Recall Risk Response Strategy

The Challenges of Managing a Global AML Program Whitepaper
Product Recall Risk Response Strategy

The motto "any publicity is good publicity" is not always the case. Imagine picking up the Sunday paper and seeing the headline, "Popular Retailer Recalls Millions of Children's Toys." Then, imagine the popular retailer in the article is you. It could — and does — happen.

This nightmare came true in August 2007 for Mattel when the company had to recall nearly 19 million of its toys made in China. The recall included 436,000 die-cast toy cars depicting the character "Sarge" from the animated film Cars. The paint used on the cars contained unacceptable levels of lead. At the same time, Mattel recalled 18.2 million other toys because the small magnets inside the toys were powerful enough to harm children if swallowed. According to Mattel's 10-Q ended September 30, 2007, the total recall cost, as reported in the quarters ended June and September 2007, was $68.2 million.

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