Can You Make Money From a Product Recall? It Depends


You might have seen a recall on the news or social media, or gotten a letter in the mail. A familiar product is being recalled. How concerned should you be? What do you have to do?

The number of recalls in the first quarter of 2022 was the highest in five years, according to Quality Assurance Magazine. It’s important that consumers are aware of recalls to protect themselves physically and fiscally.

First, don’t panic.

Sometimes responding to a recall is as easy as throwing an item away. You might return it to the manufacturer, or bring it somewhere, as with a vehicle, to be repaired. It’s important to understand a recall so you don’t end up paying for repairs unnecessarily. And sometimes you can receive compensation as a result of a recall, but that requires knowing exactly what you need to provide to receive money.

Pro Tip

Don’t confuse the meaning of the term “voluntary recall.” This means that the manufacturer has recalled the item before the government mandates the recall. It is still serious.

Can You Be Compensated After a Product Recall?

Manufacturers are unlikely to compensate you past what they’ve outlined in their recall materials, unless you can show damage specifically related to the recall. There is no compensation for your time bringing your car to be repaired, for example.

Companies are required to set up toll-free hotlines when they have recalled products. You should be able to return a product and get a refund for it, even without the receipt. For example, for food recalls, if you use this FDA site and click on the food manufacturer, it will link you to the manufacturer’s recall contact information.

You can check these articles to see if any of the class-action settlements apply to you. Ideally you will not have a loss when something you own has been recalled. Ensuring your health and safety is priceless, right?

What to Do When You Find Out About a Recall

Here are the essentials about what a recall is and what to do about it.

What Exactly Is a Recall?

Recalls happen when a manufacturer, consumer watch group or the government identifies an issue with an item. They are targeted and specific. Recalls are meant to protect consumers. Recalls typically fall within the following categories:

  • Children’s toys, equipment and clothing. Products in this category are commonly recalled due to the many child-related safety regulations. Kids will always find a way to put the wrong stuff into their mouths.
  • Food. Food recalls use product names, establishment (EST) numbers (which are on meat, poultry and dairy packaging) and freeze or use-by dates. These identify specific products with issues.
  • Vehicles. Recalls can happen through the manufacturer or the National Highway Traffic Safety Administration. These recalls can be because car seats, tires, parts or equipment have been identified as potentially hazardous.
  • Medical devices. The Food and Drug Administration might initiate or mandate a recall, but more often the device or pharmaceutical company will do it. The website Drugwatch writes that “On average, about 4,500 drugs and devices are pulled from U.S. shelves each year.”

In addition to these main categories, recalls often happen for sports equipment, beauty products and clothing.

How Do You Know if a Product Is Recalled?

You have to be fairly proactive to find out about recalls. Vehicle manufacturers should send you a letter, but most of the time, news reports are the first way people find out. Check these sites for the latest updates:

What to Do for a Children’s Product Recall

The first thing to do when you learn about a recall is assess the risk. For example, the Hard Rock had to recall children’s hoodies because the drawstring posed a risk. Parents can call or email the company about returning the product or simply remove the drawstring.

A brass piece in a toy contained too much lead. The suggested remedy is for parents to remove it and get the free replacement piece. In both of these cases, the companies set up toll-free numbers for parents to get information.

What to Do for a Food Recall

Food recalls are most often precautionary. Most food recalls are because of unlisted ingredients or foreign objects in the package. Some recalls do involve bacteria or germs, such as E. coli or listeria. Check the product numbers and use-by dates to see if your item is being recalled.

If you haven’t already, don’t even open the recalled product’s packaging, in case the worrisome issue is airborne. If you still have your receipt, you can return a recalled product to the store, typically for a refund. If you don’t have the receipt, throw away the affected product. If the recalled food came into contact with other food, throw that food away, too.

If you ate the food, monitor yourself for symptoms — they may not occur until 24 hours or more after consumption. If there’s any question, call your doctor.

What to Do for a Medical Device or Drug Recall

Hearing that a drug you’ve been taking or device you’re using has been recalled can be frightening. The FDA has three classes of recall ranging from immediate and serious (Class I), to concerning (Class II), to don’t freak out but stay vigilant (Class III). The risk to patients’ health is a big determination in the recall.

You can safely dispose of an over-the-counter drug if it is recalled. (Here are the FDA’s guidelines for disposing of medications.) If it is a prescription, contact your doctor or pharmacist to learn about alternative options. Sometimes drugs are recalled for poor labeling and packaging, not because they are physically harmful.

If you did not receive a notification, contact your doctor to find out if your specific device or prescription is part of the recall. If you have an implanted medical device, you may need to monitor your symptoms or seek immediate medical help. It is also a good idea to notify your health insurance company. Document any adverse symptoms you might have related to the drug or device.

Even if there hasn’t been a recall, if you are suspicious of your drugs or device, you can report symptoms to MedWatch. This FDA site gathers information about the safety of medical products.

What to Do for a Vehicle Recall

There are two different notifications that might affect you as a vehicle owner: recalls and technical service bulletins. Recalls address safety and emissions problems. Technical service bulletins mean there is something that needs to be repaired, like a radio, but it isn’t safety related.

Recalls are generally covered by the manufacturer (though if the vehicle is more than 10 years old on the date the problem is identified, it’s not required to be covered). A bulletin might be free if the car is under warranty or not that far out of it. The notice should include information about the repair, including how long it should take, when it will be available and what hazards are involved.

When you get a recall notice for your vehicle, it will have instructions for contacting the closest dealership for your type of vehicle. If you find out about the recall in another way, contact the dealership for a repair appointment. In either case, if the dealership declines to help for free, contact the manufacturer.

If you decide to repair it on your own, save all of your receipts and communication. There are fairly strict parameters for reimbursement, including the age of the vehicle and whether the manufacturer is challenging the recall in court. This is a comprehensive article about vehicle recalls from the NHTSA.

If you are shopping for a used car, you can plug the vehicle identification number into this database and find out whether the car was repaired after a recall. It lists cars that have not been repaired. Always remember that it is illegal to sell unrepaired recalled items.

The Penny Hoarder contributor JoEllen Schilke writes on lifestyle and culture topics. She is the former owner of a coffee shop in St. Petersburg, Florida, and has hosted an arts show on WMNF community radio for nearly 30 years. 

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