Happy National Bankruptcy Day!

If you're a fan of toys, or have read my blog for a while, you'll be aware of the whole brouhaha that erupted last year for toy safety. Millions of toys were recalled due to a variety of safety isses - most famously due to lead content. People were rightfully outraged that toys were available in the US with two, three and even four times the legal limit of lead in them. This lead to the passage of the Consumer Product Safety Improvement Act (CPSIA) in August, 2008. Among other things, the CPSIA bans lead and phthalates in toys, mandates third-party testing and certification for all toys and requires toy makers to permanently label each toy with a date and batch number.
There seems be some unintended (well, at least I'd like to say they were unintended) consequences to this act. The cost to test toys to comply with the CPSIA has been reported at $4,000 per toy, with toy manufacturer Learning Resources has been quoted a fee of over $24,000 to test one of their children's telescopes. Check out the quote here.
For toy giants like Mattel and Hasbro, this represents a relatively small amount per toy imported. It seems to reason that if you make a million of one Barbie doll, dividing $4,000 by a million will lead to a small incremental cost. But, what about small companies? What about people who still make toys by hand by the dozens, not the millions? $4,000 divided by 100 is $40 per toy. Dolls that are handmade to sell at $30 each can now over double to $70.
These small companies will face a decision, in a little over a month, of whether to increase their prices drastically, cease operations or operate illegally. Just to make toys in the US.
A group has popped up to try to save these handmade toys, it's the Handmade Toy Alliance. You can check out their website here. Or their facebook page here.
In this Wall Street Journal article about the pending law, Learning Resources chairman Rick Woldenberg has dubbed the day the CPSIA takes effect as "National Bankruptcy Day" due to the number of handmade toy makers, toy retailers and other companies that may be forced to close their doors due to the new laws. A website has popped up with that name that urges changes to the act. You can also click the cute image above to see what you can do to help.
I've been vocal about the need to increase toy safety, and I recognize that something had to be done, but it feels like in the rush to get something done, the US Congress has overlooked some significant details. The huge concern over foreign made toys last year has led to legislation that could all but eliminate small companies that want to make toys in the United States.