Makers of children’s products and charities that run second-hand shops are stuck with more than $1 billion of inventory they can’t sell because of a new federal product-safety law, according to surveys by trade groups and the charities.
“We have millions of dollars worth of merchandise sitting in 30 40-foot-long trailers waiting to be hauled out to a landfill somewhere,” says Michael Klein, president of Constructive Playthings Inc., a closely held Missouri toy maker. The banned products include beach balls, inflatable toy guitars and blow-up palm trees.
Local outposts of Goodwill Industries International are also “filling up trailers with the stuff,” says Jim Gibbons, chief executive of the charitable group, which collects and distributes used clothes. The law affects clothing because lead is sometimes used in buttons, zippers, rhinestones and other embellishments.
Goodwill’s Mr. Gibbons says its stores may have to destroy $170 million in merchandise. The Salvation Army say it will have $100 million in lost sales and disposal costs related to used goods.
The trade groups and charities have been lobbying for an exemption to enable them to sell the problem goods, saying the danger to consumers is minimal, but so far they have failed to get much congressional attention.
Less-obvious types of products are also affected. The Motorcycle Industry Council, which includes more than 300 makers of off-road vehicles, estimates the law will force the industry to dispose of about 50,000 motorized bikes and four-wheelers made especially for children aged six to 12. Their value: $125 million.
The vehicles have small amounts of lead in their handlebars and frames to prevent corrosion, says Paul Vitrano, general counsel to the trade group.
Kimberly Owen, who started a children’s clothing business called Moonfly Kids Inc. about two years ago in Las Vegas, says about $4,000 of useless inventory — clothes and storybooks — sits in her garage. Her small-boutique customers canceled orders because she couldn’t produce certificates showing the books and clothes had been tested by an independent laboratory, she says. She recently closed Moonfly and returned to her previous job as a real-estate agent.