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National Bankruptcy Day. Will the CPSIA effect you?

It’s possible if you manufacture or sell products for children under 12 years old.  The phrase “National Bankruptcy Day” was coined by toy manufacturer Rick Woldenberg, President/CEO of Learning Resources, in reference to the new CPSIA legislation that passed on October 18, 2008.  The Consumer Product Safety Improvement Act (CPSIA) is a direct response to the high levels of lead found in some of the children’s toys manufactured overseas.  One of the more notable incidences was last year’s headline of the “Thomas the Tank Engine” trains that were found to contain high levels of lead.  The public outrage over toxic chemicals being found on toys for children prompted President Bush to sign the CPSIA into law on October 18, 2008.  Beginning on that date, manufacturers have 180 days to become compliant which brings us to the February 10, 2009 deadline.  This is the date being referred to as “National Bankruptcy Day”.  CPSIA has created quite a stir in the children’s industry as the law’s good intentions have inadvertently created numerous hardships for many small manufacturers.  The deadline is fast approaching and I know there will be many small businesses caught in the crossfire.  Will you be one of them?  I’ve put together a FAQ below to help address some of the more common questions.

What items are required to be compliant?

All products that are marketed or could be perceived as being marketed to children under 12 years old.  This is NOT limited to toys.  It includes many items including clothing, jewelry, shoes, books, dinnerware, hair accessories, sunglasses, furniture, art materials, and musical instruments to name a few.

What does the testing require?

Lead content must be below 600ppm as of February 10, 2009 … then lowered to 300ppm on August 14, 2009… under 100ppm by August 14, 2011

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Lead paint must pass a General Conformity Certification as having less than 600ppm for goods manufactured after November 12, 2008. Third party testing is required if the product is manufactured after December 21, 2008. These amounts will be lowered to 90ppm on August 14, 2009 and 3rd party testing will be mandated

Phthalates in children’s toys and “childcare articles” are banned. Whether this includes children’s apparel items such as footed pajamas for a child under 3 years old is unclear at this point.  (Phthalates are used to make vinyl soft and flexible and can possibly be found in footwear or in this case, the rubber coatings on the non-skid bottoms of children’s footed pajamas.)

(More requirements here http://www.cpsc.gov/about/cpsia/cpsia.html )

What if I am not compliant?

As of February 10, 2009 non-compliant goods will be treated as Hazardous Materials and must be destroyed.  The civil penalty caps have been increased from $5,000 to $100,000 for each violation.

Why refer to February 10th as “National Bankruptcy Day”?

For starters, the legislation applies to EXISTING inventories.  Manufacturers commonly produce their goods 6-12 months in advance.  Any inventories that are currently in production or being warehoused now must be compliant.  If they are not compliant, they will be treated as “hazardous materials” and must be destroyed according to the Federal Hazardous Substances Act (FHSA).  For manufacturers (and retailers) of these goods, this could be devastating to companies already suffering from the current economic crisis.

Secondly, the 3rd party testing is cost prohibitive for small manufacturers.  As the law is written, the finished product will need to be tested with separate tests done for each product variable.  For example, my company www.Glamajama.com manufactures embellished baby onesies, outfits, and t-shirts for toddlers.  Under the CPSIA testing requirements, I will need to test each design and clothing style that I offer.  With 20 designs each season on 40 different style combinations, that would equal 800 separate tests that need to be done at around $300-500 a test.  It would be an understatement to say that the cost of testing would be “cost prohibitive”.

Isn’t getting lead out of children’s products a good thing?

ABSOLUTELY!  I don’t believe any manufacturer in the children’s industry would want lead in their products.  After all, many manufacturers (myself included) started a children’s based business after having children themselves.  Why would we want to endanger our own children-much less someone else’s?  We can all agree that the CPSIA has many benefits for ensuring the safety of our children, however, there are flaws regarding how it is being written and implemented.  For manufacturers, the problem isn’t with producing a lead-free product; the problem is proving that you have a lead-free product.  .  These issues must be addressed before they inadvertently bankrupt small businesses in the children’s industry.

Where can I get more information?

The best advice I can give is to educate yourself regarding the new law.  There are many manufacturers out there that don’t even realize they are being affected.  Also, what about the retailers that carry these products?  Or the eBayers and Etsy artists? The publicists who represent the designers to the media?  The sales professionals who make their living selling these goods to retailers?  This legislation has many far reaching negative effects, many of which are being underestimated.  I encourage you to visit these following sites for more information as well.

http://www.cpsc.gov/ABOUT/Cpsia/cpsia.html  Official site of the CPSIA

www.thesmartmama.com , Site by Jennifer Taggart, a Mom, Attorney, and Consultant specializing in environmental safety standards for children

http://www.fashion-incubator.com/archive/cpsia-requirements/ Fashion Incubator

Please comment below or email me at heather@glamajama.com …I’d be happy to try to answer any questions you might have.  Also, you can follow me on twitter (www.twitter.com/glamajama )

About the Author: Heather Schuck

Heather Schuck is a passionate entrepreneur who lives up to her "Lil' Firecracker" nickname. While she may joke about her "fun sized" 5'1″ petite frame or her nationally celebrated 4th of July birthday, she's serious about bootstrapping, inspiring mom entrepreneurs, [...]

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