Online Retail, Consumer Product Safety and Your Brand

Advances and increased growth in online sales and the changing landscape of consumer product safety

01 March 2016

When it comes to protecting your brand and image, choices used to be straightforward. The significant and steady growth in online retail and relative to the pace of change in global consumer product safety laws pose a serious challenge to protecting brands. While a brand may meet the regulations of its country of operation, should it be obliged to meet the regulations of the countries that it sells to – even if the regulations are vastly different and the volume of sales to these countries is low?

It may be prudent and wise to invest in ensuring that your brand’s products are in compliance with the local consumer product safety laws of any jurisdiction where they are sold – whether the laws be national, provincial (or state) or even municipal. With online retail, this becomes a rather large task as sales can happen anywhere in the world. On the other hand, it may be an unnecessary expenditure to devote resources towards compliance in regions that are unlikely to generate sales; most laws do not provide specific instruction on how online retailers are obliged to act, other than specify the rules in general  for retailers in that jurisdiction. What stance works best for your business?

At the current time of writing, the U.S. Federal Trade Commission (FTC) suggests that consumers be informed of their buying decisions on their own accord. The onus being placed on the consumer, while relieving a business of liability, does not provide a legal safeguard to a brand or business – nor does it prevent damage to brand in the court of public opinion. Damage to a brand name and corporate image, may often have long standing effects – potentially leading to significant financial losses, fines or penalties. With more and more people connected to social media, even small defects in a product line can be hugely detrimental to a brand and having a good grasp on what your obligations are and how to develop an accurate response is paramount.

The U.S. census has reported significant, steady growth in ecommerce sales. Strong impetus from markets will drive governments towards more cohesive, stringent and harmonized regulations and, as a result, the burden of liability will shift to retailers from the consumer. Moreover as these changes happen, there is no telling how drastic or lax they will be.

Meanwhile as your business grows, navigating the thin line between moral and legal obligations is challenging and often confusing. While it may be difficult to develop a tailor-made solution for your business that leverages both moral and legal considerations, it is definitely possible and will save you a lot of worry in the future.

Vip Vigneswaran, as a Quality Management Consultant, advises clients on quality management solutions to meet their business needs. His background is in consumer product safety and chemical and environmental regulations. Vip has a Bachelor’s degree in chemistry and mathematics, with a minor in bioethics from the University of Toronto, St. George.