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April 19th, 2016

Calculating the Cost of a Recall – 14 costs

Calculating the cost of a recall before it happens will help your executives understand how much to allot toward preventing a recall.

Calculating the Cost of a Recall - Value of Recalled Goods

Value of Recalled Goods 2014

You may think your company is under the government’s radar.

But, you are wrong!

Almost one-third recalls conducted in 2014 are from small companies under 5 employees.

Using data from the FDA and USDA we worked on calculating the cost of a recall. The average market value of products recalled in 2014 was $1,563,551 with a median of$33,598.  Small businesses make up the vast majority of recalled product. The visible cost of a product recall is just the tip of the iceberg. The majority of the total cost of a recall are the hidden costs as listed below:

$________________ Cost of Manufactured Goods

$________________ Product Disposal Costs

$________________ Change in Insurance Premiums

$________________ Business Interruption

$________________ Customer Reimbursement

$________________ Customer Damages

$________________ Retailer Reimbursements

$________________ Transportation

$________________ External Professional Fees

$________________ Sanitizing Production Facilities

$________________ Warehousing Costs

$________________ Internal Time and Expense

$________________ Loss of Brand/Reputation

$________________ Government Fines and Penalties

Take Action!

  1. Follow FDA Warning letters and USDA Recalls to monitor actions against your competitors, suppliers and vendors.
  2. Contact MEIRxRS about mock audits or to audit your suppliers.
  3. Share this page with your colleagues.
  4. Insure vacancies on your Quality team are filled quickly using full-time recruiting services
  5. Learn about our Quality Control Apprenticeship Program

Contact MEIRxRS for Auditors

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One Response to “Calculating the Cost of a Recall”

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