Product recalls can happen for a variety of reasons including health problems, false advertising, defects and hazardous performance. There is a spectrum of recalls with some problems being very minor, while other issues are downright dangerous.
One of the most recent and infamous product recalls was the Samsung Galaxy Note 7. With phones catching fire during use, the company was forced to recall millions of devices for the safety of their customers. Not only that, but they had to stop replacing them as well since the technology was clearly faulty. This cost the company millions of dollars and an exceptional amount of time.
Another industry where you will often see recalls is from food manufacturers. For example, if you are producing muesli bars, biscuits and protein snacks, you will have a variety of raw materials in your inventory stock to incorporate in the production. Some of your inventory stock might include pumpkin seeds, oats, chocolate chips and peanut butter. It’s likely that each of these ingredients came from different suppliers.
If a large batch of peanut butter gets contaminated at the original plant, it can cause a domino effect of problems down the supply chain. Not only is the peanut butter supplier sending product to this company to make muesli bars and biscuits, but it is selling it to other companies as well. There may be reports of sickness or food poisoning from the products. Therefore, the products need to be recalled and information needs to be communicated to customers immediately. When an ingredient in your inventory stock can cause this level of problem, it can be paralysing for a business.
What can your business do in the event of a product recall?
In order to help your customers and protect your brand during a product recall, implement some of these tips so both parties end up with a good result.
Firstly, communication is critical during product recalls. Not only do you need to make this known to a wide audience, you need to keep a line of communication open with affected customers at all times. Make sure your customer service department is prepared to deal with the matter. Train them in responses and hire a couple more people to cope with the queries. Having a live chat bot or staff member on your website can also field numerous inquiries and shorten the waiting time for help. Sometimes it’s more convenient just to type than wait on the phone.
Offer customers a full refund and own your mistake. One of the biggest things to recognise is customer loyalty. Customers will be sympathetic to your mistake if you’re sympathetic to their purchase of a product that doesn’t work. Give them a full refund, even if this means your revenue takes a cut. If you satisfy this customer by dealing with a product recall in a professional manner, they will likely come back and buy more products again.
Education is also important when it comes to a product recall. Make sure your customers understand all of the risks and side effects that could be caused by this mistake. Remain open and transparent and stay as helpful as possible.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.