Monday, March 22, 2010

CPSIA - More Data on Devastation of Resale Industry

Can any sensible person continue to deny the pain inflicted on resale and consignment shops by the CPSIA? The issues have been well-documented for almost two years now. Not only were these small businesses needlessly harmed by this law and forced out of the children's market, but the neediest American families dependent on these outlets were left in the lurch, too. Congressional Democrats left them there with the justification that it was for their own good. Spoken like someone with warm clothing on. published an interesting piece on the plight of these retail outlets yesterday entitled "Some Thrift Shops Hurt by Lead-free Law". It starts out:

"Janis Nelson, owner of Growing Kids consignment shop in Riverdale, points to a heavy book of lead-paint recalls as explanation for the store's decision to stop selling second-hand children's toys . . . . she could not risk a $25,000 fine, which is possible under the law if a single toy with lead were to slip past the heavy book of recalls."

And the shops aren't the only losers. The article continues:

"Besides hurting the stores financially, [store owner Lorraine] DeHart said that the law can also hurt consumers, who may be turning to thrift shops because they cannot afford department store prices. 'People can't afford to buy it new,' she said. They might turn to garage sales, she said, where there tends to be less scrutiny over products sold. Yet even garage sales are not exempt from the new law. 'If you're going to have a garage sale, be careful what gets sold because if someone gets hurt they can sue you,' said Kathleen Reilly, public affairs specialist for the U.S. Consumer Product Safety Commission." [Emphasis added]

What a calming effect the CPSC has on this market! I can't wait to see what the CPSC's Small Business Ombudsman does to earn his wages. Perhaps he will roam the land assuring small businesses that by complying with the thousands of pages of rules under the CPSIA, they can avoid getting sued, fined or jailed.

Crazy? Remember the words of Inez Tenenbaum: "'CPSC’s new authority to seek higher civil penalties does not mean we will ignore serious violations by small businesses,' said CPSC Chairman Inez Tenenbaum. 'We will continue to take enforcement action against any business, large or small, that violates the Commission’s product safety laws and regulations.'"

And the market reality for the resale industry today? Ask the National Association of Resale & Thrift Stores: "NARTS members have reported significant increases in both sales and incoming inventory, according to NARTS, but those that sold children's products did not fare as well with 44.2 percent experiencing a decrease in sales due to the challenges of complying with the consumer act of 2008."

It's time for Congress to stop sucking its thumb and do something for the neediest members of our society. Of course, some modest risk will be required to fix the mess they made in 2008. Resale shops deserve a bright line rule to encourage them back into the business of selling used children's products. The law's focus should be on recalled items only. The rest of the used children's product category should be saleable without risk of liability unless the store has actual knowledge of a hazard. The strictures of the CPSIA will slowly and effectively clear out old inventory over time.

The resale industry has NO HISTORY of selling dangerous products or harming children. The "risk" of restoring the market sanity that prevailed before the lead mania of 2007/8 is trivial but the harm inflicted by the CPSIA fix is real and profound.

It's time to 'fess up and fix the law, guys!


Anonymous said...

It's time for Congress to stop sucking its thumb and do something for the neediest members of our society.

I'm sure you don't mean to imply that only the neediest members of society shop resale. That line of thinking will only feed into Bob Adler's statements indicating that only non-profit resale entities are deserving of a bit of common sense, not we greedy folk who operate consignment businesses on a for-profit basis.

Rick Woldenberg, Chairman - Learning Resources Inc. said...

Anonymous, you make a good point. I was trying to point out a big loser in the CPSIA saga, needy Americans who shop at resale shops. They need our help. I certainly acknowledge that the customer base of resale shops extends FAR beyond that group. The distinction in Adler's analysis between the equities favoring sales to poor people over rich people is flawed, as I have pointed out in the past. The issue is safety, not income levels. In any event, thanks for the clarification.

Anonymous said...

I primarily shop thrift stores. However, as a needy American, I also shop Consignment stores! Sometimes there are items I can't get any other way, and it's cheaper still than buying new!