Tag: Tracking Labels

CPSC General Counsel Clarifies Distributor Responsibilities for Children’s Apparel

~ Rick Brenner ~ Leave a comment

Ever since the early years of our industry there aren’t many promotional products distributors who would describe themselves as manufacturers.  But under the Consumer Product Safety Improvement Act (CPSIA), the majority of promotional products distributors –at least those who buy blank apparel from a wholesaler and then send it out to have it decorated—are just that, manufacturers in the eyes of the law.  Now for the first time, as a follow-up to questions posed at PPAI’s Product Safety Summit this past August in New Orleans, the General Counsel of the U.S. Consumer Products Safety Commission (CPSC) has put in writing exactly how the senior staff at the Commission regards the responsibilities of distributors who decorate.  This written guidance doesn’t change anything from the Commission’s perspective but it might surprise many distributors to learn of the extent of their responsibilities under the law.

The issue we’re discussing is related to children’s apparel – tee shirts, baseball uniforms or sweat shirts, among others – and the amount of lead that might become part of these garments through the inks or other surface coating materials that are used in the decoration process.  Current law limits this lead content to no more than 90 parts per million (ppm) for any “articles intended for use by children.”

So how does a distributor become a manufacturer when they don’t manufacture the garment?   According to discussions with the Commission, the original manufacturer of the garment is responsible for compliance of the garment as they sell it, whether blank or decorated.  If it is a children’s product – often obvious with apparel because of children’s sizes – the garment manufacturer must comply with all the provisions of CPSIA for lead in the substrate of the product (100 ppm) and lead in any paint or surface coating (90 ppm).  This manufacturer must include a permanent tracking label on the garment as well.

But according to a 2009 meeting between PPAI and CPSC, the Commission has made clear that if a promotional products distributor buys a blank and compliant garment and then performs an operation that transforms the garment in any way before the garment is sold to the end buyer, then that distributor is responsible as a manufacturer for whatever “transforming” operation it may have performed itself or contracted to have done – such as tie-dyeing, stain proofing, embroidering, adding a press-on applique or simply silk screening the garment.  The distributor’s “manufacturer” responsibilities include obtaining a test from a CPSC approved third party laboratory confirming the lead content of the surface coating and applying a permanent tracking label to the garment to cover the decoration.  This tracking label is in addition to any tracking label that may have been applied by the blank garment manufacturer such as Gildan, Hanes or Champion.

Some promotional products distributors have wondered why they should be held responsible for ink applied by their decorator.   We posed this question to Ms. Falvey who explained that the responsible party depends on how the transaction is structured between the distributor and the decorator.  If a decorator buys a blank garment from an apparel wholesaler, decorates it and then sells the final decorated product to a distributor, then the decorator is responsible as the manufacturer.   But if a distributor buys a blank garment from an apparel wholesaler and then sends it to a decorator to be personalized, the distributor is the manufacturer.  The decorator in the latter case is simply a subcontractor to the distributor.

So what is the new guidance that Ms. Falvey has written to help distributor “manufacturers” understand their obligations under CPSIA?  It has to do with third party testing and the extent of the distributors’ responsibility to verify that their decorator is using compliant ink.   A question was posed to Ms. Falvey as to whether or not a distributor could rely on a decorator’s certification that their inks were compliant without having to personally test the inks or the finished garments, as long as the decorator indicated that the inks were tested once per year.

Ms. Falvey writes: “The short answer to that question is yes. The certificate from the imprinter (or firm applying the ink) can cover multiple batches or lots of production.  The only caveat is that the firm selling the imprinted item (distributor) must have exercised an appropriate level of due care to ensure that the ink being used by the imprinter is the same that is covered in the certificate such that each additional batch or lot of production will continue to comply with all applicable children’s product safety rules.”

For promotional products distributors, the CPSC guidance is a bit of a good news/bad news scenario.  The good news is that distributors can rely on a decorator’s certification without having to test every garment order at a third party lab.  The bad news is that the Commission has set a very high bar of responsibility for the distributor to independently verify that the inks that the decorator is using for every order are the same as what is covered by the certificate and that each additional batch is compliant as well.   Each distributor will have to determine how to fulfill these responsibilities but it is clear that the distributor will have to go far beyond keeping a current certificate on file.  If a recall or non-compliant garment issue arises, Ms. Falvey’s letter makes clear that the distributor will need to prove to the Commission that it exercised “an appropriate level of due care.”

From a common sense perspective, a distributor could and should visit their decorators periodically, learn about their ink procurement and testing procedures, review their third-party test documentation and do whatever they would normally do if they had their own factory or decorating operation to ensure that the operation is compliant.   If a distributor does not want to do this, or doesn’t have the expertise, he or she should discuss with their legal counsel whether or not it is worth the risk to continue to be responsible for decorating children’s apparel.   There is already one case in the past few months of a John Deere tee shirt recall in Canada for high lead in the decoration.  Recalls are very expensive not to speak of other costs and penalties possible under CPSIA.  In addition, ink is only one of the materials that may need to be tested.  If the decoration involves an applique, the glue and other material in the applique must also be third party tested as it all constitutes a surface coating.

Another strategy is for distributors to continue to sell children’s apparel but to purchase it as a finished product from a compliant apparel decorator.  Distributors would still want to exercise due diligence that the decorator is compliant – just as they would in purchasing children’s products from any supplier – but they wouldn’t have the manufacturer’s responsibility under CPSIA for testing and tracking labels.

Finally, as with all regulatory matters, in addition to the practical and common sense aspects, the matters discussed in Ms. Falvey’s letter are legal issues and I am not a lawyer.  Nothing that I have written in this or any other article should be construed as legal advice.  All industry participants – suppliers and distributors – would be well served by consulting with a product safety attorney who regularly practices before the Consumer Product Safety Commission and is an expert in CPSIA matters.

Falvey Letter Re Decorating and Tracking Labels

Tracking Label Requirement Still Vexes Suppliers and Distributors

~ Rick Brenner ~ Leave a comment

In the four years since the Consumer Product Safety Improvement Act (CPSIA) was signed into law, the promotional products industry has struggled mightily to figure out how to apply it to what we do every day.  Nothing has come easily.  Perhaps because most promotional products don’t start out as children’s products and perhaps because the “toys” we sell are mostly for adults, there always seems to be a “yes, but” when we try to understand CPSIA in the context of the world we live in.

Permanent tracking labels – a CPSIA requirement for children’s products – provides a good example.  The requirement sounds simple but in practice the details aren’t so simple.  Depending on what you sell, where you buy it, who makes it and how you decorate it, the tracking label requirement can be a complex burden.  One thing is certain: each distributor and supplier should develop a rock-solid process for their tracking labels.  This is one provision of CPSIA that could cost you a lot if you get it wrong.

Who is responsible for tracking labels?  The manufacturer of the children’s product.   CPSIA uses the definition for manufacturer from the Consumer Product Safety Act which is “any person who manufacturers or imports a consumer product.”  But it can be more complicated than that.  The way the promotional products business works sometimes there are two manufacturers of a children’s product and both have responsibilities for tracking labels.  If a distributor buys children’s-sized tee-shirts from an apparel wholesaler and then contracts with a local silk screener to personalize them, even though the blank tee shirts have a tracking label from the shirt manufacturer, the distributor, by adding an imprinting process, has taken on the responsibilities of a manufacturer under CPSIA, including the responsibility for a second tracking label.   The first tracking label applies only to the blank tee shirt.  The second tracking label applies to the decoration.  Again, not so simple.

So how do you get it right with tracking labels?  Let’s start by looking at the most straightforward case.  This first example applies primarily to suppliers but also to distributors who import directly:  You contract with one of your overseas factories to produce a fully decorated, CPSIA-compliant children’s product, including a detailed tracking label with all of the required information.  As the order is being produced, your on-site inspector at the factory sends representative samples from the production run to a CPSC-certified laboratory to test for CPSIA compliance.  Then, once you verify compliance, you ship the products to your customer.

So why is this example the most straightforward case?   The example product is a children’s product from day one so there’s no ambiguity there.  The product is produced and decorated by the same manufacturer and then tested as a finished product.  There’s only one company responsible – the importer who contracted for the product – and you have a third party test that applies specifically to the order.  Very clear, very clean.

Next let’s consider a more typical case.  You’re a supplier who imports hundreds of products and stocks them in your warehouse.  You carry an undecorated string backpack that you’ve had tested annually as compliant with CPSIA children’s product standards.  Each time you produce a new batch you include a tracking label inside each bag that ties back to its production run.  You stock thousands of these bags and decorate them in your U.S. factory as you receive orders from distributors. These bags are in dozens of distributor co-op programs, including a large federal program with a child-oriented cartoon imprint that promotes healthy eating habits for first graders.  Since you already have a tracking label in the blank bag do you need a second tracking label each time you decorate an order for that federal program?  No.  Your company imported the bag so the tracking label you attached overseas when the bag was manufactured still applies.   However, when working with pre-applied tracking labels like this CPSC has advised that you should add a date code in a discrete location on the product each time you decorate a new order.  It’s also a good idea to flag in your computer system the orders that are specifically for children.  That will save you money if the product is later involved in a recall by enabling you to narrow down the problem and identify the specific products to be recalled.

Consider this scenario:  You produce and import 150,000 bags in January, all in the same production run and all with the same tracking label.  The bags arrive by ocean freight in March and you stock them in your U.S. warehouse.  You decorate them over the next several months as you receive orders and by October you’ve shipped the last of them.   The following April you receive a call from an investigator at the U.S. Consumer Product Safety Commission (CPSC) about that federal healthy food program.  It turns out that a consumer advocacy group tested a few of the bags and found high levels of lead in the decoration.  Your lawyer confers with the Commission and ultimately recommends that you initiate a “voluntary” recall.  But how many bags do you have to include in the recall?  You decorated and shipped 10,000 children’s bags per month for the federal program in May, June, July, August and September.  They all have the same imprint and the same tracking label.  Do you have to recall all 50,000?  What if the faulty ink arrived at your factory in September and was only involved in the final 500 pieces you produced?  It would be a painful remedy to have to recall 50,000 if the problem was limited to 500.  In the end, the final tally will depend largely on your labeling, documentation, testing and record keeping.   If you have date codes for each production lot of bags and samples of each lot of ink you place into production it could significantly cut your exposure.  The more you know, the more you can document, the better off you’ll be.  If all you have is one tracking number covering five months of production you will have no way to tell consumers how to differentiate the high-lead bags from the earlier ones.

In this example, the high lead came from the decoration.  That raises an important and related issue – developing a system to test and document the decorating materials you use.  In this example, we noted that the factory received a batch of high lead ink in September.  But if you do not have a system for testing or saving samples from each batch of ink, how could you later narrow down the problem to the ink you received in September?

The final example is one that is extremely common for distributors – the case I referred to earlier where a tee shirt is manufactured by one company and decorated by another.  Say that the children’s-sized tee shirts were manufactured by Gildan.   Gildan has no responsibility for imprinting done later so the original tracking label has no relevance if the problem is in the decoration.  A second tracking label is the only way you can trace those tee shirts if there turned out to be high lead in the imprint.   What about the unique combination of the original tracking label and the imprint?  Could that substitute for a second tracking label?  By itself, no, because it doesn’t identify the “manufacturer” (in this case, the distributor who contracted for the imprinting) or any of the other date and batch information that CPSIA requires of tracking labels.  Just like suppliers, distributors who decorate product should set up a good in-house system to verify that their subcontractors have current third-party tests for the inks and other materials they use (heat transfers might contain glue or other materials), to assign tracking numbers, to verify compliance and most important, keep good documentation for all of this.

As for the tracking label, there is no one specific required layout.  The law requires that the label include enough information for the purchaser or recipient of the product to trace back to the manufacturer, to identify when and where the product was produced and to “ascertain” production information including as the batch or lot.  Some manufacturer/importers provide this information on a detailed tracking label.  Others include a web site and a code that reveals the tracking information.  The way you format your tracking label will of course be dependent on the space available on each product.  Regardless of how you do the label, it’s a good idea to develop an internal system to maintain records for each production run of children’s products, of the tracking numbers you issue and the related testing documentation. That information will be enormously valuable if the product is ever involved in a recall.   The law doesn’t specifically require you to create such a system but an August 2009 policy statement by CPSC regarding the tracking label section of CPSIA states “the Commission believes that compliance with this Section generally will require that manufacturers have in place a reasonable means to ascertain detailed production information, including the means to distinguish products made from different factories, made with different components, at different times or have other material differences that make the product non-identical from products.”

Like it or not, CPSIA has thrust many new responsibilities upon companies in our industry who produce children’s products.  The more that distributors and suppliers integrate these new responsibilities into the culture and daily practices of their companies, the better job they will do in complying with the law and the less they will risk an expensive and embarrassing fiasco.   And beyond pure compliance, conscientious and high quality business practices like these have a major impact on maintaining the confidence of major corporations in our industry, something that none of us can afford to take for granted.

Key Points and Suggested Best Practices to Consider

For Suppliers

  • Flag in your computer system the children’s product orders you produce.  If any non-compliant product or decorating material slips into your supply chain or factory, being able to identify the children’s products orders you produced will help you limit the scope of any potential recall.
  • When you produce or decorate a children’s product order, include a permanent tracking label on the product that complies with CPSIA.  Store the tracking numbers in your computer with a link to the order you’re producing.
  • If you include a tracking label on blank but CPSIA-compliant product when it is manufactured be sure to record those tracking numbers in your computer system with a link to the particular order you’re producing.  One way is to develop a system for your warehouse team to scan the tracking labels when they pick product for each order.  The better your documentation the easier time you will have if there is a recall.  And when you use that blank stock for a children’s order, print a date code in a discrete location on the product to help you later limit the scope of decoration-related recalls.
  • If you purchase a children’s product from another importer or manufacturer and it bears their tracking label, and then you decorate the product, you will need to print a second tracking label on the product that applies to your decoration.
  • Consider keeping a sample of each completed children’s product order to help you test and narrow the scope of any future recall.
  • Develop a system to test and document the lots of ink and other materials you use for decorating.  Consider keeping samples of each lot.  If there’s a problem later the documentation will help you narrow the scope of a recall.

For Distributors

  • If you purchase a blank children’s product and contract to have it decorated be sure your decorator has current third party tests to prove CPSIA compliance of all the inks and other materials used in the decoration.   Then instruct the printer to print tracking information including your company name, production date, production location and batch information.  The label must enable end buyers and/or recipient of the promotional product to track back to you.  Store the tracking numbers and all testing documentation in your file for each children’s product order you produce.

CPSC Policy Statement – Tracking Labels