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A product recall is a request to return to the maker a batch or an entire production run of a product, usually due to the discovery of safety issues. The recall is an effort to limit liability for corporate negligence (which can cause costly legal penalties) and to improve or avoid damage to publicity. Recalls are costly to a company because they often entail replacing the recalled product or paying for damages caused in use, albeit possibly less costly than indirect cost following damages to brand name and reduced trust in the manufacturer.
A good example is the recent recall of over 500,000 Toyota Tundra pickup trucks. The Tundra had a steering problem which resulted in several accidents, forcing the manufacturer to attempt to right the problem.
A country's consumer protection laws will have specific requirements in regard to product recalls. Such regulations may include how much of the cost the maker will have to bear, situations in which a recall is compulsory (usually because the risk is big enough), or penalties for failure to recall. The firm may also initiate a recall voluntarily, perhaps subject to the same regulations as if the recall were compulsory. In the case of a compulsory recall, consumers who fail to dispose of it or return it to the manufacturer for replacement or refund could be fined for as much as $5000.
A product recall usually involves the following steps, which may differ according to local laws:
Maker or dealer notifies the authorities responsible of their intention to recall a product. Consumer hotlines or other communication channels are established. The scope of the recall, that is, which serial numbers or batch numbers etc. are recalled, is often specified.
Product recall announcements are released on the respective government agency's website (if applicable), as well as in paid notices in the metropolitan daily newspapers. In some circumstances, heightened publicity will also result in news television reports advising of the recall.
When a consumer group learns of a recall it will also notify the public by various means.
Typically, the consumer is advised to return the goods, regardless of condition, to the seller for a full refund or modification.
Avenues for possible consumer compensation will vary depending on the specific laws governing consumer trade protection and the cause of recall.
Instances of major product recalls
USA 1959-60 Cadillacs. "steering linkage (pitman arm) failed on many cars while making a 90 degree turn at 10 to 15 mph (24 km/h); that the arms were made of metal somewhat softer than that usually employed to withstand the stresses of low-speed turns; and that general motors had sold six times as many pitman arm replacement units during those years than during the preceding and succeeding years." pg 150 the struggle for Auto safety Chapter titled: regulation as Recalls
USA (1998-1999): Chevrolet Malibu incident: Failure to recall resulted in multiple fatal occurrences
USA (May 2000): Ford Motor Company's handling of the recall of the 6.5 million 15-inch Firestone tires fitted to the Ford Explorer SUV. This soon culminated in the resignation of Ford's CEO at the time, Jacques Nasser. (See Firestone vs Ford Motor Company controversy.)
Australia (April 2003): The recall of a variety of goods manufactured by Pan Pharmaceuticals as a result of failures in quality assurance and standards. The company was soon put under receivership.
United Kingdom and Canada (February 2005): Potentially carcinogenic Sudan I food colouring was found in over 400 products containing Worcester sauce and had to be recalled.
June 2005: Engine stalls linked to faulty wirings on 6.0L Powerstroke Diesel engines have caused hundreds of thousands of 2004-2005 Ford Super Duty, Excursion, and Econoline models to be recalled.
Ireland and United Kingdom (24th June 2006): Cadbury-Schweppes announced that there has been a salmonella scare in their products, causing millions of chocolate bars from stores across Ireland and the UK to be recalled.
2006 Sony notebook computer batteries recall:
August 2006: Dell recalls over four million notebook computer batteries, after a number of instances where the batteries, made by Sony, overheated or caught fire. Most of the defective notebooks where sold in the US, however some one million faulty batteries could be found elsewhere in the world.
August 2006: Following Dell's battery recall Apple Computer also recalls 1.8 million Sony notebook computer batteries. Similar to Dell, most of the notebooks were sold in the United States. However some 700,000 units could be found overseas.
September 2006: Matsushita (Panasonic) recalls 6,000 batteries.
September 2006: Toshiba recalls 340,000 batteries.
September 2006: IBM/Lenovo recalls 500,000 batteries.
October 2006: Hitachi recalls 16,000 batteries.
October 2006: Fujitsu recalls 338,000 batteries.
October 2006: Sharp recalls 28,000 batteries.
February 2007:Lenovo and Sanyo recalls 200,000 batteries.
March 2007: Menu Foods and several other companies issue numerous pet food recalls.
March 2007: Ford Motor Company recalls new 2008 Super Duty after reported tailpipe fires in the diesel version.
April 2007: Nestle voluntarily recalled it's "Caramel Kit Kat Chunky" bars and "KitKat Cookie Dough Chocolate" bars due to some bits of hard plastic being found in
June 2007: Foreign Tire Sales Inc. told to recall tires imported from Hangzhou Zhongce Rubber Co., of Hangzhou, China. The tires were not made to safety standards to prevent tread separation, a problem that led to the nation's largest tire recall in 2000 by Ford Motor Company. Foreign Tire Sales Inc., is unable to comply with the recall since it has about 6 employees and doesn't have money to pay for a recall. Further, Hangzhou Zhongce Rubber doesn't have accountability for a recall since the company is based solely in China and sells in the US through third-party re-sellers.
July 13 2007: Gerber recalled Organic Rice Cereal and Organic Oatmeal Cereal after a Tampa, Florida parent, Richard Andree, found approximately 30 hard chunks, some of which were a ½ inch long in the product.
August 14 2007: Nokia recalled 46 Million BL-5C batteries after a primary investigation which revealed faulty manufactured batteries by Matsushita Electric Corporation which could explode after short circuit
August 30, 2007: Some organic chocolates made in China recalled because there were worms inside the chocolate.
In October 2007 ground beef from the Topps Meat Company of Elizabeth, New Jersey was recalled. As of 2007, it is the second-largest beef recall in Unites States history. 
October 2007: Alltrade Tools recalls over 800,000 power tool chargers.
In October 2007 several U.S. Pharmaceutical companies voluntarily recalled several infant cough and cold medicines due to possible overdosing dangers.
November 2007: A popular children's toy, Bindeez (also known as Aqua Dots, in the United States), was recalled when it was discovered that 1,4-butanediol had been substituted for 1,5-pentanediol in the bead manufacturing process. The human body metabolises the substance to form the anesthetic GHB. 
November 2007: Children's snow and sand castle kits by Paricon recalled due to sharp edges; sold exclusively at LL Bean
November 2007: About 175,000 Curious George 12-inch plush dolls with plastic faces were recalled due to the risk of lead exposure and poisoning.
^ Jeffrey Gold, Importer told to recall Chinese tires, AP, June 25, 2007
^ "Topps Meat Co. folds after beef recall.", New York Times, Friday October 5, 2007. Retrieved on 2007-09-25. "Topps Meat Co. of Elizabeth, which is involved in the second-largest beef recall in U.S. history, said today it is going out of business after more than six decades"