Consumer safety rules could drive crafters out of business

Crafters are up in arms over a seemingly disastrous unintended consequence of the Consumer Product Safety Improvement Act (CPSIA), which will require lab certification that lead and phthalates are not present in toys or clothes -- sounds good, but crafters warn that this means that "a toymaker... who makes wooden cars in his garage in Maine to supplement his income cannot afford the $4,000 fee per toy that testing labs are charging to assure compliance with the CPSIA."

The law takes effect on February 10th and the toymakers and small clothing designers are getting very worried indeed.

In 2007, large toy manufacturers who outsource their production to China and other developing countries violated the public's trust. They were selling toys with dangerously high lead content, toys with unsafe small part, toys with improperly secured and easily swallowed small magnets, and toys made from chemicals that made kids sick. Almost every problem toy in 2007 was made in China.

The United States Congress rightly recognized that the Consumer Products Safety Commission (CPSC) lacked the authority and staffing to prevent dangerous toys from being imported into the US. So, they passed the Consumer Product Safety Improvement Act (CPSIA) in August, 2008. Among other things, the CPSIA bans lead and phthalates in toys, mandates third-party testing and certification for all toys and requires toy makers to permanently label each toy with a date and batch number.

All of these changes will be fairly easy for large, multinational toy manufacturers to comply with. Large manufacturers who make thousands of units of each toy have very little incremental cost to pay for testing and update their molds to include batch labels.

For small American, Canadian, and European toymakers, however, the costs of mandatory testing will likely drive them out of business.

Handmade Toy Alliance, Fashion Incubator (Thanks, Sarah!)

• [Anonymous]

  My wife works for a small toy company in the US (25 employees). Most of their products are manufactured by their own factory in Hong Kong, with fair wages, etc. The paint they use for their toys is sourced in the US, and tested/approved for use (no lead, etc), then shipped to their factory to use on toys. They started doing this voluntarily a long time ago because they are responsible and the sources in Asia were not. Nevertheless, they still will have to get all of their products “certified” via this new testing scam – er, scheme. It’s going to significantly damage their business, and they’re going to discontinue many of their products because they can’t afford to have each and every one in each and every color tested.

  I call bullshit.

• [Anonymous]

  The problem seems to stem from origins with looser regulations: Asia, Mexico, South America…
  A PROPER law would require said tests for importation of these countries rather than domestically produced/Canadian produced/European produced goods.

  As a consumer, I pay a higher price for European toys. I also pay a higher price for American-made toys. And with this type of legislation in effect, all that will be left are the cheaply regulated Asian-imported models (that will also go up in price as competition dwindles). As poster #11 pointed out, I won’t even have the OPTION of buying a Selecta toy.

• [Anonymous]

  Oh, I wonder what would happen if I tried to mail order stuff from the EU? Would they have to declare it on customs and be subject to importation laws?

• [vespabelle]

  It’s kind of hard to say that a size 2T dress isn’t kid’s clothing but an “art object” (unless it’s made of something that’s not a fabric.)

  Kathleen has a new post up at fashion-incubator today which talks about how this is bad for large manufacturers too. And there is good information in the forums.

  • [Antinous]

    Remember when Fisher-Price imported about a trillion children’s items from China that turned out to be toxic? A week later, Fisher-Price took the fall for the whole affair, absolving the Chinese factories from responsibility. How much money passes under the table to make sure that all our consumer products keep coming from China?

• [Takuan]

  http://www.forbes.com/opinions/2009/01/16/cpsia-safety-toys-oped-cx_wo_0116olson.html

• [Anonymous]

  About the “adult collectibles” vs “toys” loophole, this is exactly what happened to the Micronauts. Everyone remembers them, right? (www.innerspaceonline.com) Mego imported them in the 70′s from Japan, where they’re called Microman, with all their tiny pointed parts and spring-loaded missile glory, though lots of the missiles had to have big rubber “mushroom tips” added to protect dim US children. Around 2003, a US company called Palisades Toys lovingly re-created select figures from the line and re-released them in new color schemes and packaging. Sadly they had to be sold as adult collectibles with warnings all over them, as now they are considered much too dangerous to actually play with, horrors! Thus, the distribution deal they had with Toys R Us had to be scrapped, leaving them with collectors shops and video stores (?) to sell them through. Unfortunately the Chinese factory contracted to produce the figures subcontracted the job to another Chinese factory using lesser-grade materials (toxicity unknown), resulting in an ultra-low quality first series with lots of in-package breakage issues and more. C’est la vie in the 21st century!

• [Anonymous]

  This seems to be a sticky issue.

  On the one hand, I don’t want my kids to be inadvertently poisoned, so I would like some safeguard.

  On the other hand, that safeguard shouldn’t drive smaller companies out of business.

  Perhaps a way to reduce the cost of the test is in order. If nothing else, a “safety tax” on toys with this stamp (though I’m not a fan of more taxes in general) could distribute the cost a bit better.

  Or maybe it could be an opt-in kind of system: you can certify your toy as safe, or you can “buyer beware” the whole thing. This way, if you know the small producer is trustworthy, you can take the risk, but if you’re really paranoid about poisoning your kid, you can just stick with the big codified multinationals…

• [amuderick]

  I run a small business and all of our products need to have this testing done over the next few weeks. We will spend tens of thousands of dollars because we offer many color varieties. It is going to hurt, a lot.

  Each color needs the full suite of testing performed even though they are identical except for the pigment. Even though I have certificates on file that these color pigments are safe for cosmetics (each batch is tested), I have to test them again.

  Also, we’ve got a strange scenario now where a product can be FDA approved for contact with food but be illegal to sell for use by children. This is because the FDA permits certain phthalates while CPSIA bans them.

  On the one side, I am frustrated because there was zero thought given to the negative effect on small business. But, I have also experienced that a lot of people in the ‘big’ toy business really don’t care about the toxic chemicals in children’s items and this is the first step in correcting that.

  I don’t think there was a lot of thought and review put into this. The legislation is very reactive and it shows in the language. There are a number of standards which the law requires ‘only if the CPSC finds it feasible’…ie. we put this in as a pipe dream without checking with any scientists to see if it was actually possible.

  On the plus side, they deferred to the existing voluntary standard by making it the new requirement. Better than reinventing the wheel. The ASTM process is far superior to the EU’s way of coming up with standards IMHO. The only downside there is that the government required standard is actually not a part of the public record. It is a private document which you must pay to view. The EU does things the same way. Why must I be required to pay money to read the public law?

  This legislation is deeply flawed so I hope it will be revisited soon (though I doubt it). It will generate large amounts of paperwork fraud. If I test my toy and it passes, I get my ‘papers’. Then I can switch suppliers for a raw material and my certification still is valid. The odds of getting busted are still pretty low. They did increase the penalties to be significant, but I fear they will just put small guys, who were honestly overwhelmed by the rules, out of business. Big companies will fight the fines with armies of lawyers or just suck it up as the cost of doing business.

  The alternative is to test every batch of every chemical and material all the way down the supply chain. That will solve the problem but it will increase toy prices in the same way that there is a massive price difference between baby formula and powdered milk. One is a food, the other a pharmaceutical.

  @#7 EH, regarding ‘regulatory capture’, you hit the nail on the head. In Europe regulation is a huge jobs program that stifles innovation. We have to send our samples to the EU for testing because certain tests must be performed by citizens of the EU. Hmmm?

  The testing firms are going to make a killing on this. I know that the CPSC is considering upping the ante by requiring regularly scheduled repeated testing. I don’t know what I’ll do then.

• [Adam Fields]

  I’ve written a somewhat lengthy piece on this:

  “Keeping toxic chemicals out of kids toys can’t really be the responsibility of the parents, because it’s not within their domain of control. You can be a responsible parent, you can only buy toys you “trust” (whatever that means) and your child will still be exposed to toys you didn’t have any say about. It’s unavoidable – other kids have toys, day care centers have toys, kids play with toys in the playground that other kids bring or leave behind. The only way to prevent these toys from coming into contact with kids is to keep them out of the marketplace to begin with.”

  http://www.aquick.org/blog/2008/12/10/toys-and-testing/

  • [Antinous]

    Aren’t US makers using pre-existing, pre-tested materials like paint. It’s not like they’re mining lead in the back yard and compounding their own. Why can’t they just be required to keep an MSDS book with sheets for whatever materials they use?

• [Takuan]

  make a good safe product and sell it as best you can directly. When your enterprise gets big enough and earns enough to attract official attention fold your tent and re-open under a different name. An advantage is also not having to pay any taxes. If they don’t want your participation in the big system you don’t owe them any money either.

• [SKR]

  I just had a conversation about this issue this past weekend with a friend who is a toy designer. It seems that there is a loophole based on naming of the product. If the product is a “toy” you face massive regulations, if the product is a “collectible” you face massive (17%) import tariffs, but all the regulations don’t kick in. These tariffs are an issue for him since he imports from China, but should not be an issue for domestic producers. I don’t know the specifics (we didn’t get into the testing since the factory he uses tests), but I thought this could be a place to start.

• [Anonymous]

  Now apply this principal to every other regulation and you see why our government is completely unsustainable.

• [dustbuster7000]

  So let me see if I got this right, carmarkers can avoid putting airbags in their cars by having production rates below a certain volume (al la Tesla Motors), but toymakers aren’t afforded the same leeway? Sounds like a job for Letter-To-Your-CongressCritter-Man!

• [technogeek]

  Hm. Can we get hobbyist suppliers to shoulder the costs of CPSIA-certifying their products? If so, then I would *hope* “made entirely with certified materials” would suffice.

  Date and batch number is relatively easy.

  Possible workaround: Market/label the items as “collectable craft/artwork; not CPSIA certified, hence not for use by children.” Then it’s up to the buyer to decide whether Junior should get his paws on it, based on how much they trust you, and you’re out of the loop.

  Of course the other answer is that one can continue to assume CPSC is Really Unlikely to come after the person making a few hundred whatever-they-ares a year, simply because they’re unlikely to ever notice you exist.

  Of course if you do something particularly stupid like creating a choking hazard that gets into the news, all bets are off and you can assume an irate relative will come after you with charges of everything from littering to public indecency to murder most foul. But that isn’t a change, and I don’t think this one item is likely to affect the outcome.

• [Anonymous]

  In response to Post #6

  Is there any requirement in Federal Senate or House procedures to require “independent expert oversight” for the drafting of any law?

  There is no requirement, or even an assumption, on the Hill that the legislators read or write the bills that they pass. Many bills are written by lobbyists and lawyers, who then “summarize” the content to attract votes and the bill becomes law.

  Perhaps the requirement that we should request is testing and certification of the gray matter between the ears of the self-same legislators…

• [godfathersoul]

  Interesting loophole SKR but many people aren’t so well educated to see through the labeling of a “toy” as “collectible”. And a “Toy” store full of “collectibles” seems a hard sell. A lot of people, i would think. won’t see the same bash-it-against-the-wallness that a “collectible” would have.

  It seems like this fact – driving small manufacturers out of business like the old fellow down the street from me with his garage dor open and a sign that says “Hand Made Wooden Toys” – super classic! – is sort of a dirty secret the larger companies would know all along – similar to the need for Organic Certification to be able to sell organic produce.

  Bureaucracy benefits large entities. Leaving things to the “Free Market” and trusting peoples inherent good to sell products that are safe and healthy doesn’t go very far – big companies are, for the most part, looking solely at bottom line – and if this means a little lead in jimmy’s crayons, then so be it!

• [Anonymous]

  I know this is an old post, but I just thought I’d mention that I’ve read a couple of articles that say resale shops will have to stop carrying children’s clothing and other products. This is going to put a lot of second-hand kids’ clothing shops out of business.

• [Anonymous]

  This proposed act also has the entire bike manufacturing industry up in arms as well. Since most bicycles can potentially be used by 12 year old children, each part a company produces needs to be independently tested which costs serious money. This not only affects China, but Taiwan as well – where many high-end bikes are made. There’s no way to mutiny against these disastrous consequences either.

• [Patrick Nielsen Hayden]

  Comment #2, from “anonymous”:

  “Now apply this principle to every other regulation and you see why our government is completely unsustainable.”

  Yes, the fact that human institutions are fallible and make mistakes proves that the whole enterprise of trying to organize things equitably is “completely unsustainable.”

  Heaven forbid we should, instead, analyze our mistakes and try to do a better job. That would obviously be “completely unsustainable.”

  Let’s just chuck it all and have direct rule by the strong. Because anything else is “completely unsustainable.”

• [moofrank]

  A deeper question:

  Is there any requirement in Federal Senate or House procedures to require “independent expert oversight” for the drafting of any law?

  There needs to be.

  As laws get more and more embedded into the intricate meshes of complex systems, the folks doing the work have less and less idea what they are doing.

  Right now, it is like someone doing chip-level repair on a motherboard when they’ve used a computer for a little bit.

• [EH]

  Regulatory capture by the testing industry, anyone?

• [Beanolini]

  The ‘collectible loophole’ would be unlikely to stand up in court. From the FAQ on the Act:

  A “children’s product” means a consumer product designed or intended primarily for children 12 years of age or younger. In determining whether a consumer product is primarily intended for a child 12 years of age or younger, the following factors will be considered:

  * A statement by the manufacturer about the intended use of the product, including a label on the product if such statement is reasonable.
  * Whether the product is represented in its packaging, display, promotion or advertising as appropriate for use by children 12 years of age or younger.
  * Whether the product is commonly recognized by consumers as being intended for use by a child 12 years of age or younger.
  * The Age Determination Guidelines issued by the Commission staff in September 2002, and any successor to such guidelines.

  So any product ‘commonly recognised by consumers’ as a prepubescent child’s toy could be covered by the Act, whether or not it’s labelled as ‘adult use only’, or ‘collectible’.

  This surely is the best example I’ve ever seen of ‘nanny state’ legislation.

• [manicbassman]

  typical… bet big business was secretly in favour of this as a means to block the little guys out…

• [Anonymous]

  More likely this will drive people under the tax radar. They won’t be a legitimate business anymore, and will hang on to what cash they get.

• [SKR]

  @ #8 Beanolini,

  I suppose the intended age issue would put a crimp in my argument. However that does explain why my friend was so particular about the age requirement being on the boxes. But then dirty clown figures with switchblades and bottles of booze, which is one of his products, really isn’t for children, so I don’t think he will have that problem.

• [adralien]

  I’m sure industry isn’t happy about $4K per toy either. I don’t think industry has really had any threat from small/craft manufacturers anyway, they’re not shipping 100K units to Walmart, and Joe Craftsman isn’t going to be able to plastic mold or license something to tie into Saturday morning cartoon characters. (The Mattel/Mars bar chocobot power hour!)

  Assuming that small manufacturers are making toys for children, how do they ensure there is no lead or anything else in the toy? Just because it is”crafty” doesn’t mean that it is safe. I think it is more -likely- to be safe, but that means nothing.

  Are there source certificates for wood dyes? wood preservatives? Fabric dyes? Plastic wheels? etc that a small manufacturer can rely on?

• [Pantograph]

  The way one German builder of artifacts solved this problem:

  He made table lamps, ceiling lamps, standing lamps etc. Now according to german law, if you sell lamps you need extensive (and expensive) DIN testing.

  So he sold art objects (and he stated as much to the buyer and on the receipt.) The consumer could use as a lamp if they so wished, but they would be doing so on their own initiative. (They had to mod the thing by the clever hack of screwing in a lightbulb I believe.)

  So what’s to stop these toy manufaturers to go into the wooden kinetic car sculpture business?
  Not their fault if irresponsible parents let their kids play with the “art objects”.

• [zyodei]

  @Takuan: Maximum $100,000 fine and five years in jail.

  Get to Wal-Mart you hippies, and forget about buying any sort of handmade toys.

• [WarLord]

  Greetings

  This isn’t rocket science, the makers go to their Representative and get an exemption for makers of “less than x” units with some form of certification about lead based and safe components

  But remember this law is happening because real toys for kids were made with lead paint and toxins and candy is made with melamine etc etc so the public outcry is driving the legislation

• [Takuan]

  they can’t even jail the mortgage corporation bosses, think they have time for minnows?

• [luckymomma]

  Selecta, one of my favorite European toy companies, has already announced that they will pull out of the U.S. market as of Dec. 31st because the cost of testing is too prohibitive. Here’s the article:
  http://www.playthings.com/article/CA6620437.html

• [WarLord]

  Greetings

  Of course it raises another serious liability issue for crafters –

  If I buy your toy (or collectible) and next year a blood test of my child shows “lead” would you be able to defend your toy manufacturing your building and sourcing process as being ‘lead or toxin free’ with or without this law?

  If not then this law is the least of problems on the crafting horizon

• [AirPillo]

  It’s worth pointing out that this isn’t the first time the CPSC has done something absolutely boneheaded that is in the best interest of neither producers nor consumers.

  BoingBoing had a story about their little tiff with chemical suppliers (and specifically United Nuclear) a while back. Something I’m thankful was published here.

  There has yet to be any progress in that matter.

• [Anonymous]

  News flash! Government regulation has unintended consequence that hinders economic efficiency or curtails freedom!

  Maybe the big toy company manufacturers _purposefully_ implemented this regulation to shut out independent/small dealers.

• [craftsburykids]

  Thanks so much for posting about this important issue.

• [Anonymous]

  I’ve read through all that you have posted …. it seems to me that the gap between the haves’ and the haves’ not is about to get even larger…. those who can afford the testing will have much less competition.

  I am sad to see some of my favorite Mommy Boutiques close their doors. Or at less stop carrying the products I’m interested in… Don’t get me wrong I am all for children safety! As are many other crafters that I know and do business with. I myself try to use supplies that are made right here in the US. Because of concerns about lead and other by products in things.

  In my experience I have found better products to sell in my shops from artist who take pride in what they do. Who strive to use nothing but the best materials they can get their hands on. It’s just sad that this law is making it nearly impossible for them to afford the costly testing on their products when they know that they are already using the best and safest materials they can find.

• [BabyDipper]

  I’m a WAHM of two sets of twins and am trying to start a children’s products company. As of now, I only have one product (the Baby Dipper bowl), but I plan to offer more products as soon as this one gets going well. The details associated with the CPSIA are quite overwhelming, so I’m rather intimidated by the whole thing. I agree that products for children should not have BPA, phthalates, lead, etc., but the government needs to help, not hinder testing and regulation to make sure our kids are safe.

• [Anonymous]

  Humm…. maybe now is the time to buy stock in the Testing companies Just a thought :) There business is sure to double if not triple in the next few years. ***Always looking on the bright side of things.