Custom Plush – CPSIA Testing & Compliance

The following is a cross-post by HTA members CurlyQ Cuties, makers of custom plush toys. It is reposted here by permission.

If you’re manufacturing plush, you must make sure the product you’re making is safe.

While this has always been the case, the government has decided — after the lead scares in imported products a few years ago — to legislate a “solution.” If you make a child’s product — as defined by the government, not by you — you must comply with the Consumer Product Safety Improvement Act of 2008. This legislation is quite broad and far ranging. Its implementation was left to the Consumer Product Safety Commission (CPSC). Although 2010 is almost over, the rules resulting from this legislation are still evolving.

If the government decrees your product a children’s product, you better have your ducks in a row. This is not as easy as it sounds. A primary requirement is to understand the legalise (or have an attorney interpret it for you) in the Act and in the CPSC rulings. You must also become familiar with the Federal Register — this is where the official rulings from the CPSC is published.

While we believe we comply in principle with the various requirements of the Act, I’m sorry to say that I don’t personally believe we will ever be in full compliance. Don’t get me wrong — our products are safe. It’s just the Act was not written with small batch toy manufacturers in mind. The particular nature of our products — you select the design — means each product is relatively unique. While the CPSC has provided for some component testing, the guidance they’ve provided in this area is somewhat lacking for our manufacturing scenario.

To further complicate matters, the laboratories “accredited” by the CPSC for CPSIA-related testing each seem to have their own interpretation of CPSIA requirements. We’ve had different labs give us different scenarios (and widely different pricing). This testing stuff isn’t free or cheap and ultimately you, our customer, pays for it.

One lab told us woven textiles must be tested for lead — when the CPSC has published that textiles are exempt from lead testing.

Another lab told us that we’d have to test all of the unique variations of our products. Our custom products are made from a finite number of components each applied in the same way. If you calculated the number of “unique” products we’re capable of making, the number currently runs in the sextillions (10 to the 21st power). If we had enough money to pay for the testing of each of these, we would be on our own tropical island enjoying the sun (and, regretfully, not busy making plush).

After much searching, we found a lab with a representative that we were able to communicate with and who provided sane advice on what testing was considered reasonable. We’ve undertaken lead testing in advance of the third-party lead testing requirements set to go into effect in early 2011 (and which have been twice-delayed by the CPSC). Our products pass third-party accredited lab lead testing (CPSIA Section 101). We comply with the CPSIA’s tracking label requirements (CPSIA Section 103). Our products don’t have plastic components — phthalate testing is not required. Our products comply with the ban on small parts.

In addition to the federal requirements imposed by the CPSIA (and other federal Acts), individual states have begun to impose their own testing requirements. We agree that all products — particularly those used by children — should be safe. The requirements to do so, however, have become quite onerous for our small business (and many others like it). In an era where manufacturing jobs have disappeared en masse overseas (and any job is hard to come by), it boggles my mind that our government is making it more difficult — not less — to manufacture products in the United States.

If you’re thinking about manufacturing plush (or any other children’s product), know in advance what you’re getting yourself into. As a small batch manufacturer, you’re not exempt from any of these regulations. There are a lot of requirements. And fulfilling those requirements costs money.

Allowing XRF Testing for CPSIA Compliance Could Save $3.7 Billion and Save Small Businesses

The following was written by Seth Goldberg, President of Essco Safety Check, a product safety firm based in Redmond, WA. Seth has calculated the potential savings of using XRF scanning technology instead of the destructive chemical dissolution tests mandated by the CPSIA. In particular, he finds that small businesses would save tremendously with no erosion of product safety. The Handmade Toy Alliance believes that this approach would be a tremendous help to small busineses struggling to comply with the testing requirements of the CPSIA.

This is an objective view of how the Consumer Product Safety Improvement Act (CPSIA) is potentially affecting small businesses, the testing costs and methods, as well as a common sense approach to certification and job creation.

The CPSIA was written in 2008 to ensure that children’s products don’t contain harmful amounts of certain elements, like lead and cadmium. All children’s products must eventually be certified by an accredited 3rd party laboratory who utilizes specific testing methods. With these laboratory results a company can create the required general certificate of conformity (GCC).

There is also a stay of enforcement with the CPSIA until 2/10/11 for the GCC on all children’s products other than those that are painted, children’s jewelry, cribs or pacifiers. Additionally, there is regulation in total content of lead and regulation in soluble content for eight elements (including lead), this method (soluble) ASTM F-963 is currently voluntary. There is also regulation for the amount of certain phthalates, a chemical added to plastics to make them softer.

All current approved testing methods are destructive, they are very costly, can take extensive periods of time to get results. This testingcan only done by a select group of laboratories (only 227 worldwide and 60 within the United States, many of these labs have one parent company).

While researching this article, I attempted to find an economic impact analysis that was performed for CPSIA, but was unable to find one. I even contacted a state representative with Washington State, in April 2008, four months prior to the federal CPSIA regulation, Washington State passed the Children’s Product Safety Act, but apparently no impact study was done either.

How does one figure out the economics behind this piece of legislation?

I thought to try and simplify things and try to figure out how many businesses would be impacted, what size of business they are and ultimately how products that would be affected. I will compare an approximate cost of traditional testing methods, to a technology that is mobile and non-destructive (X-Ray Fluorescence). And I will show how many jobs could be potentially created.

Number of businesses potentially affected by the CPSIA

Businesses that are potentially affected by the CPSIA include; Manufacturers, importers, retailers, charities and re-sellers who make, distribute in commerce, children’s products, those designed and marketed to children 12 and under.

I found two main sources for this data, the US Census and the North American Industry Classification System (NAICS). The US Census numbers were from 2006 and the numbers from the NAICS are from 2009.

Here is data from the North American Industy Classification System (NAICS) their data was used to calculate the number of potentail businesses affected by the CPSIA.

Total number of manufacturers potentially affected by the CPSIA in the United States 52,544***
Total number of wholesalers potentially affected by the CPSIA in the United States 125,624***
Total number of retailers potentially affected by the CPSIA in the United States 511,240***
Total number of businesses potentially affected by the CPSIA according to the NAICS 689,408***

The US Census provided data on the size of the businesses affected and is broken down by percentage. My use and definition of small business is based on <500 href="http://www.essco-safetycheck.com/CPSIA" target="_blank">CPSIA.

Total Manufacturers potentially affected have 0-4 employees 46.3%, <20>

What does all of this mean? More small businesses are going to be affected by this regulation than large businesses. 40% of all businesses potentially affected by the CPSIA are very small with only 0-4 employees. 61% of all businesses potentially affected by the CPSIA have less than 20 employees. All businesses classified as small businesses, less than 500 employees, 71% of them potentially will be affected by the CPSIA.

Number of products potentially needing testing

Attempting to figure out the amount of SKUs or total products potentially affected was an even larger task than trying to figure out the number of businesses potentially affected. There is no single source of data about the number of products manufactured or sold, so I took a slightly different approach. I researched a few key consumer websites and contacted a few experts to make my assumptions.

Yes, I said assumptions. The problem with figuring out some specifics is that I’m guessing on a few key points. Here we go!

I first visited ETSY.com. ETSY.com is a website that sells handmade consumer products, you know, made by your friends and sold online. When I looked on their site earlier this week, they had over 280,000 children’s products listed.

I decided to go to two other major consumer product retail sales websites, Buy.com and Amazon.com. At Buy.com when I tallied all the potential products that could be affected by the CPSIA I found over 66,000 different products. On Amazon.com the amount was much more. I will add one caveat, at amazon.com they did not separate jewelry into a product category “children’s jewelry” so I used the total of all jewelry in my tally. With all jewelry listed and all other products I found that could be potentially affected by the CPSIA, the total was almost 1.18 million products on Amazon.com. Without the jewelry the total was over 150,000 products.

In a conversation I had with a regulatory agency employee in the State of Washington, she suggested that the total number of potential products on the market is in the tens of millions.

Based on these numbers and suggestions, I’m going to split the middle and suggest that there are five million different products on the market that could be impacted by the CPSIA.

The Cost Breakdown

First we need to look at the traditional testing methods. I’m only going to look for three things, amount of lead, amount of cadmium and phthalate testing (traditionally this is tested using a Gas Chromatography machine). For this analysis, disregard all other potential costs.

Traditional ICP-MS testing for heavy metals can easily be hundreds of dollars per test, per color, per substrate. I have been quoted ranges from $75 to $300 per test for heavy metal testing; phthalate testing has been a bit lower from $75 to $150. For this comparison, I’m going to use the low end of $75 per test.

I am also going to assume that every item needs to be tested a total of five times. Every product is a little be different, they’re made with different colors, different substrates and materials. Take an old childhood favorite Rubik’s Cube. It has six different colors and is made of one substrate (black plastic), that item would require a minimum of seven tests. As I said, I’m going to use a five test average.

If there are five million items and each has to be tested five times, that is a total of twenty-five million tests. Considering we are looking for three things (lead, cadmium and phthalates at $75 per test) the total for traditional testing methods would be $5.625 billion.

If all the accredited laboratories split this testing evenly, that would be approximately $25 million per lab worldwide.

Other testing method

There is a technology that is mobile and non-destructive that can simultaneously look for lead, cadmium and PVC in one simple push of the button. Unfortunately, it is not the approved testing method for the CPSIA.

This technology is called X-Ray Fluorescence (XRF) and is readily available to use for consumer product testing. It is the approved testing source for HUD Lead inspections, and is used by the EPA, FDA and CPSC.

Data that I have collected from over 8000 test results using XRF analyzers shows that of all consumer products tested only 16.3% are found with any amount of lead, 4.3% are found with any amount cadmium and 11.1% are identified to be made of PVC. In total only 31.7% of all consumer products I have tested using XRF analyzers have been found with lead, cadmium or PVC, yet all products are required to be tested destructively.

I used these percentages to help figure out the comparable numbers.

Comparison

If all products are tested by traditional testing methods using ICP-MS and GC machines the cost for testing for lead, cadmium and PVC would be $5.625 billion. However, if you were to use XRF analyzers to screen all these products, at a cost average of $5.00 per test the total cost would be $125 million.

At this point, all items that tested positive for lead, cadmium or PVC should be further tested by the traditional testing methods. Using the percentage of items found with lead, cadmium or PVC (31.7%) traditional testing methods would cost $1.784 billion. If you add up the XRF screening and then the re-testing by traditional testing methods, the costs would be approximately $1.9 billion.

That would be a cost savings of $3.7 billion or 66.1% for consumer product testing for the CPSIA.

That is a tremendous amount of money that these businesses can put back to work in our economy, hiring people, investing, building business all while keeping compliant with the regulations.

Number of jobs created

I’m going to specifically look at this as the formation of XRF Certified Consumer Product Inspectors. If a total of twenty-five million tests need to be done annually, and each inspector can do two hundred tests per day, two hundred and fifty days per year, that could create five hundred jobs. That is not including managers and office staff to handle additional work. Overall, I would suspect that close to one thousand jobs could be created, but that is only based on five million products that need to be tested.

What if that total number is closer to twenty million? That would potentially be upwards of four thousand jobs and a potential economic impact of close to $15 billion going back in to the pockets of businesses of which almost 71% are considered small businesses.

Conclusion

What I’m suggesting is a common sense approach to testing and the certification that consumer products meet the regulations of the CPSIA. If XRF testing is approved to simply screen products for certain heavy metals and PVC, and only those found to contain these elements or chemicals would be further tested, there can be a huge positive economic impact for small businesses, as well as the creation of jobs.

***These figures were calculated from two sources, the US Census and the NAICS.

CPSC releases CPSIA guidance document with preliminary rules for component testing and product retesting

On Friday, the CPSC issued draft guidance on component testing, retesting requirements, and one-of-a-kind items which should benefit many of our members if the CPSC grants enough time for these rules to be implemented.

In a first step toward allowing component-based testing, the CPSC's preliminary guidance would allow manufacturers to utilize testing performed by their component suppliers instead of testing each component in a finished product.

Component-based testing has been a keystone of the HTA's proposals for change and we view it as crucial to the survival of hundreds of small batch manufacturers. It would allow suppliers of our raw materials to provide a manufacturer with certification of compliance within the law, which would eliminate the need for redundant and costly unit-based testing.

We are very pleased that the CPSC rules for component-based testing included not just notions and hardware like button, zippers, and hinges, but also paint and other surface coatings such as varnish and silkscreen ink.

We welcome the CPSC's decision to allow component-based testing, which is not explicitly authorized by the CPSIA legislation. However, it will take years for our component suppliers to realize the need to perform these tests as economic pressure pushes upstream in the supply chain. We have only three months until the deadline for testing and certification on 2/10/10, which is not long enough for small manufacturers to take advantage of these new rules, which will not even be voted on until after Januray 11, 2010.

We therefore reiterate our call for an additional one year stay of enforcement. The CPSC and manufacturers alike need more time to comply. And, we urge the CPSC to announce a continued stay as soon as possible instead of waiting until the last minute as was done in January 2009.

Fridays's guidance document also addressed retesting schedules and one-of-a-kind items, which are also key concerns for our members.

The CPSC has adopted the HTA's proposal to allow an exemption to annual retesting requirements for small batch manufacturers. Basically, they're allowing a flexible retesting schedule based on risk factors and relief from retesting until the number of units produced exceeds 10,000. This is very welcome relief for our members and will help ensure the continued availability of low-volume specialty and handmade children's products.

For the first time, the CPSC addressed the unique situation of one-of-a-kind items, encouraging manufacturers to utilize component-based testing and the testing of similar products to assure compliance. We welcome the CPSC's willingness to address this issue, which is of critical importance for many of our members.

Combined with previous CPSC rule making that exempted fabric, paper, and natural materials, this ruling does a lot to address the concerns of small batch manufacturers. However, we still require adjustments that only Congress can fix, including harmonization with EU standards, flexibility on lead limits for de minimus risks such as rhinestones and brass, and legislative affirmation of component-based testing.

The CPSC has clearly shown its intention to create reasonable rules when they can. However, they have also clearly indicated that there are multiple issues in which their hands are tied by the inflexible language of the law. The time is now for Congress to address these issues and fix the CPSIA.

The CPSIA Testing Requirements Flowchart

It is now one year and two months since the CPSIA was passed and we can honestly say that confusion is still the norm for those of us living under its mandates.

Among manufacturers, consumer groups, and even the politicians who wrote the CPSIA, we hear misinformation, misunderstanding, and misrepresentation of what the CPSIA actually requires. It's easy to get confused, of course, since the CPSIA is a very complicated law which subjects different types of products to very different rules.

Although the CPSC has issued guidance for small businesses seeking to comply with the CPSIA (much of which is internally contradictory and leaves many questions unanswered) they have not issued a simple, easy to understand document that describes which products must be tested and which tests must be performed.

So, we thought we'd help out.

We are happy to introduce the Handmade Toy Alliance CPSIA Testing Flowchart. It is intended for manufacturers making products now, not resellers. This reflects our best understanding of what tests the CPSIA requires manufacturers to perform. We're happy to take any suggestions for how this document could be improved--so let us know what you think.

Please feel free to share this document or post it on your site. We would also like to offer this document to the CPSC--we would love to see it used in an official capacity to help educate small business owners, many of whom have been driven to tears while trying to understand the CPSIA.

Download the CPSIA Testing Requirements Flowchart here.

Understanding the True Costs of CPSIA Testing Requirements

Photo of hand-painted acorns by Mamaroots via the Flikr album of endangered toys.

We've recently been challenged about our claims regarding the true costs of testing and whether our cost range of $300-$4,000 is correct. So, let's explore this topic a little closer.

First, some consumer groups seem to believe that clothes, wood products, and books have been exempted from testing requirements. In fact, this is not correct. Fabric, untreated woods and post-1985 books have been rendered exempt by the CPSC [pdf]. However, most clothing has some other notion on it, such as a button, snap, zipper, Velcro, etc., that would make the end product subject to the third party testing regulation. Wood that has paint or a finish on it or has exposed components such as screws or hinges must also undergo testing. Books printed prior to 1985 must be tested for lead. And, all toys must be tested for ASTM F963 (physical and mechanical tests) compliance. Although the CPSC's exemptions are helpful, we are hardly out of the woods. Most of our members will still be required to third party test for their products that are lead free.

And, although there have been non-toxic dyes and paints on the market for some time, they are not pre-empted from testing by the CPSC. Indeed, the testing requirements on paints and dyes are more stringent. Once paint, varnish, or any other surface treatment such as a silkscreen is applied to wood or fabric, the end product must be tested. One would hope that the CPSC would allow the common sense approach of component based certification, which would allow us to rely on testing of material components instead of finished products, but the CPSC has not yet approved this.

We have also heard consumer groups claim that the average cost per toy test is as low as $75. We agree this would be a more manageable fee, but reality again proves more severe. There may be a misunderstanding as to the type of testing that we are quoting. We are referring to third party testing in a CPSC certified laboratory. This is digestive testing, which destroys the sample, not XRF scanning of the product which keeps the sample intact (a method that we advocate). It should be noted that once the stay of enforcement ends on 2/10/10, digestive batch testing by a certified lab will be the ONLY approved testing method.

The oft-cited figure of $75 per test is actually the approximate cost of a digestive lead test on a single element of a product. Each zipper, button, screw, color of paint, or piece of trim is considered a separate element and each must be tested for lead. Each size or color of a toy is also considered a different product and must also undergo the same test even if the materials are the same. So, the cost of CPSIA-certified lead testing increases quickly depending upon the design of the product and how many tests it requires. Also, toys must be tested for phthalates and ASTM conformity, which can be even costlier to perform. And, under section 102(d)(2)(B) of the CPSIA, testing must be repeated, possibly as frequently as every year. We stand behind our estimates of $300 - $4,000 per item for CPSIA-compliant testing.

We strongly believe that this cost burden is untenable for small manufacturers. We recognize that toy safety is important and testing is a good tool to assure that consumers have access to safe toys, but we advocate a testing requirement that allows for XRF testing, component based certification and a reasonable ASTM test without driving the most conscientious, innovative and unique manufactures out of business. We are not against testing, just against redundant and burdensome testing.

XRF testing for lead would be much more affordable. In fact, a great majority of our members have utilized this technology in order to continue selling their product during the stay. The CPSC uses this methodology regularly as a screening technique and deemed it a “reasonable testing protocol”.

We also advocate for component based certification. This way, all of the raw materials that we utilize in our product lines would be tested prior to coming into our studios, thereby enhancing compliance up the supply stream. Manufacturers could then use these certifications to prove compliance under the law. Unfortunately, this is not written into the CPSIA. Nor has the CPSC ruled that these methodologies are compliant with the CPSIA.

Our goal at the Handmade Toy Alliance has always been to find a way to verify the safety of children's products without driving small manufacturers out of business. We still do not believe that most consumer groups want our businesses to fail, and we again call on them to join us in an honest discussion that begins with a realistic understanding of the issues posed by the CPSIA.