When products are recalled, it can be a detriment to earnings, but in the name of safety, most retailers understand that it’s a necessary adjustment to protect customers.
One discount retailer, however, is under fire for putting recalled items back on shelves — and potentially putting infants and children at risk.
TJX, the parent company of T.J. Maxx, Marshalls and HomeGoods, has been ordered to pay out a $13 million fine by the U.S. Consumer Product Safety Commission (CPSC) for putting recalled items back on shelves in stores and online.
“Federal law prohibits the sale, offer for sale, or distribution in commerce of a consumer product that is subject to voluntary corrective action, such as a recall, that has been publicly announced and taken in consultation with CPSC,” the agency said in a release.
As part of the settlement, TJX will also have to keep up with a compliance program with the CSPC to ensure that this does not happen again moving forward, including an internal program for the “appropriate identification, quarantine, and disposal” of recalled products.
There were about 1,200 units of items sold, with 19 different products being put back on shelves. The items were distributed over a five-year period from March 2014 to October 2019, the majority of which were recalled for risk of infant suffocation and death, namely several infant and toddler sleepers.
Other items included speakers, barstools, coffee presses and scooters, with other risks involved including “fire, burn, choking, fall, laceration, skin irritation, explosion or other injuries.”
The news was first announced to the public in November 2019.
TJX is coming off of a strong Q1 FY23, posting net sales of $11.4 billion, an increase of 13% from the same quarter last year.
“We believe our value proposition is as appealing as ever for consumers in today’s retail environment, and we are excited about our initiatives to drive customer traffic and sales,” TJX President and CEO Ernie Herman said upon the earnings release. “We remain focused on our long-term vision to become an increasingly profitable, $60-billion-plus company.”
TJX Companies was down around 9.5% in a one-year period as of Wednesday morning.