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The blogged wandering of Robert W. Anderson

National Bankruptcy Day

Note: While not about technology, this post is relevant to startups. 

H.R. 4040, the Consumer Product Safety Improvement Act (CPSIA) was signed into law late 2008.  The intention is to protect children by outlawing the sale of children’s products containing lead and other harmful substances. 

Sounds good, right?

Unfortunately, the law is going to force a lot of small companies selling safe products to shutter on or before February 10th.  Welcome to National Bankruptcy Day.  From the site:

February 10, 2009 untold numbers of children’s products manufacturers and retailers will be closing their doors.

The problem is that the law was put together very hastily and has a completely infeasible implementation timeframe.  Oh yeah, and requires unreasonable testing to boot:

Not enough time:  The law was signed in August and goes into effect on February 10th.  So every kids product sold in the US has to be tested in the next 52 days?  That is impossible.

Unreasonable requirements:  Every component of every SKU has to be tested separately even if that component is used in multiple products.  For example, imagine a tag or button that is shared across ten SKUs.  That same button has to be tested ten times. 

Unreasonable cost:  Each test is expensive.  For example, one company has quoted each test at $500.  Continuing with the above example, imagine your ten SKUs with the buttons have 4 other components.  You would have to pay 10 x 5 x 500 = $25,000 to a testing company.

No allowance for existing tests:  Some companies have already had their products tested for harmful substances (e.g., kukunest is Oko-Tex certified).  That should count.

I am all for safe products and accountability, but this is really a draconian measure.  It will punish companies and people with an unreasonable set of rules and penalties. 

If this doesn’t get fixed soon, companies will go out of business, founders and innovators will lose their dreams.  Innovation in children’s products will be all but dead here in the United States.

It will happen unless the US Consumer Product Safety Commission and the US legislature do something to stop it. 

Call to action

Sign this petition:

Contact your Congressperson and ask them to fix H.R.4040 now, before more damage is one.

Disclaimer:  Do I have a vested interest in this issue?  Definitely.  My wife is the co-founder of kukunest, a company that designs and sells children’s bedding and other products.  I’m a parent and don’t want to see our schools unable to get the products they need because the suppliers dry up.  And I’m an entrepreneur believing that reasonable laws can protect people and protect innovation and business interests.

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    Warren Grabow wrote @ December 22nd, 2008 at 9:56 am

I would like to see a more streamlined process of elavuating children’s toys. I do not want to see these small companies going out of business because of the long expensive process of evaluating each and every piece of each toy.

NOTE from rwa: I copied this comment from a different post as it was meant to be placed here.

[…] in expanding and developing small and medium sized businesses, thanks to their expertise National Bankruptcy Day – 12/22/2008 Note: While not about technology, this post is relevant to startups. […]

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