The children's book industry is currently dealing with a new and pressing challenge that is threatening publishers, bookstores, libraries and schools. It's not the economy or school spending or reading rates—it is a recent act of Congress, which has blindsided the industry with the implementation of stiff safety standards on all children's products, and whose application to books is vague. It has left many publishers, retailers and industry groups scrambling to interpret the law and determine what kinds of compliance will be required, and at what cost.
The Consumer Product Safety Improvement Act, enacted in August 2008 as a response to the high-profile 2007 recalls involving Chinese-made toys containing lead, covers not just playthings but all consumer products intended for use by children 12 and under. That includes books, audiobooks and sidelines, no matter where they are manufactured, even though most books have lead levels that are well below the Act's most stringent safety standards. The industry is fighting to have most books exempted, but there may not be a resolution by the time the Act kicks in on February 10, so publishers and retailers are proceeding as if books will be included.
Not since the Thor ruling of 1979—which changed the way companies depreciate their unsold inventory—has a government regulation not aimed at publishing had such a far-reaching impact on the industry.
The industry consensus is that the concept of ensuring children's safety is, in principle, a good thing. “Everybody agrees that the basis of the [CPSIA testing] requirement is absolutely in good faith,” said Kathleen McHugh, president of the American Specialty Toy Retailers Association. “But there must be exceptions to that. With books, you're testing for lead on a material that's just not associated with lead at all.”
“This is an absolutely knee-jerk reaction to the fact that, yes, there have been children's toys and cribs that have contained lead,” said Bruce Smith, executive director of the Book Manufacturers' Institute. “But let's not take a paintbrush and paint everything the same color.”
Chip Gibson, president and publisher of Random House Children's Books, goes further. “This is a potential calamity like nothing I've ever seen. The implications are quite literally unimaginable,” he said, noting that children's books could be removed from schools, libraries and stores; nonprofit groups like First Book would lose donations; and retailers, printers, and publishers could ultimately go out of business. “Books are safe. This is like testing milk for lead. It has to be stopped.”
The CPSIA dictates that each children's book SKU shipped to retailers, catalogues and e-commerce sites as of February 10 must have been tested by a third-party lab to ensure that lead levels are below 600 parts per million. (Acceptable levels drop to 300 ppm in August and 100 ppm in 2011.) Some books also must be tested for phthalates, an acid used to soften plastic. The importer or domestic manufacturer must provide a Certificate of Conformity (usually posted on the Internet), and the product must be labeled appropriately. Older products on the shelf must fall within acceptable safety standards but do not have to be accompanied by a Certificate.
The Association of American Publishers, BMI and several other industry trade groups are trying to convince the CPSC to exempt traditional (ink-on-paper and ink-on-board) formats. Books historically have been unregulated, meaning that publishers alert the CPSC when they discover an item that poses a risk. Of just a dozen book-related reports in 20 years, only one has had to do with lead (a spiral binding) and the rest with choking hazards due to toys attached to books, according to Allan Adler, AAP's v-p for legal and government affairs. “So we were shocked to find out that now we're going to be possibly broadly testing books for unacceptable levels of lead,” he said.
Questions of Interpretation
But there is widespread confusion about exactly how the law should be interpreted. The publishing industry only found out in November 2008—during the all-important holiday season—that it would be included in the Act, and industry groups weren't consulted during its formulation. AAP and BMI have been spearheading the industry's CPSIA activity—meeting with the CPSC General Counsel, following up on specific issues and interpreting CPSC's frequent updates, rulings and opinions. Along with allied associations, they have asked the CPSC for clarification and information on a number of issues, including acceptable testing protocols, approved testing labs, and even what constitutes a book for ages 12 and under, in addition to seeking an exemption. The CPSC has been issuing information about specific issues on a daily basis, leading to an ever-changing scenario, but much of it is contradictory and difficult to interpret.
The American Booksellers Association, Children's Book Council and other associations have become more involved in this effort since the holidays. Meanwhile, an industry task force has been formed and publishers such as Random House are recruiting industry members to lobby their senators and representatives. But all this activity is happening less than a month before the Act's key provisions kick in.
The fast-approaching deadline and the threat of fines ($100,000 per violation) mean the industry is struggling to comply with the Act even without complete answers. Many major publishing houses have legal staff working on the issue fulltime, have done or are doing the required testing and labeling (as best as they can, given the uncertainty and cost) and are ready to provide the paperwork. Smaller publishers, however, may not be ready in time.
Testing can cost from a few hundred dollars to $1,500 per item—more for phthalates—which can translate to 20% of the price of some titles. Depending on how the testing protocols shake out, the financial burden of testing each item could put some houses out of business or at least cause them to narrow their lists. Another ramification is the added production time. There are only two or three third-party testing facilities, which test products in all categories, and the extra one to six weeks it takes to get the results makes it more difficult to meet shipping deadlines.
Retailers and cataloguers may receive their orders late due to the Act and most likely will face higher prices as the cost of testing is passed along. Some stores are being proactive, securing publishers' assurances that testing has been done and, if not, planning to remove products from shelves come February 10. While the burden of proof—including testing and paperwork— lies with publishers and their importers or manufacturers, according to Adler, retailers could face lawsuits or fines if they sell or display a lead-containing or undocumented product, he says. At least one bookseller is not willing to take the chance. “The buck stops with the retailer,” said Susan Blanton, co-owner of Pufferbellies Toys and Books, Staunton, Va. Her daughter and business partner, Erin Blanton, adds, “There's no way we can wait for vendors to contact us. Our business is at stake.”
Other retailers, however, are taking a more laissez-faire position, at least with regard to books. “My feeling is that manufacturers don't use much scary stuff in kids' books,” said Andrea Vuleta, general manager of Mrs. Nelson's Toy and Book Shop in LaVerne, Calif. “Not that many customers are questioning the safety of the books like they are with the toys.” She is more worried about phthalates than lead, particularly since California has recently enacted its own law banning this substance in products for young children.
Another potential ramification of the Act on retailers is the fact that they may not be able to offer as many choices to their customers, particularly in the short term. The summer 2009 edition of the Chinaberry catalogue, which features a 50/50 split of books and non-books, goes to press in late March. If the company doesn't hear from vendors by the end of January, it plans to remove products and delete pages. “We can't count on anything since we work so far ahead of time,” said Chinaberry founder Ann Ruethling.
Effect on Current Inventory
Perhaps the most confusing issue facing retailers and publishers is what to do with old inventory once February arrives. The safety guidelines are retroactive and therefore include all products on store shelves on February 10, not just books manufactured or shipped as of that date. Publishers and their distributors and retailers have warehouses and store shelves filled with books that were shipped prior to the Act and, while no testing is required on these, they must still be safe. Most traditional book formats are considered safe, but the Act as written could still open retailers up to law suits, some legal experts believe.
Most observers have read the Act as including used books, which could wipe out many retail and online vendors of used children's books, as well as prevent thrift stores and antique malls from selling children's products, and possibly requiring libraries and schools to dispose of their holdings. On January 8, the CPSC clarified that resellers such as thrift stores and consignment shops could sell used products that haven't been tested, as long as they're confident they do not contain high levels of lead or phthalates. This would seem to put resellers in the clear as far as children's books go, but Adler believes the clarification is contradictory to the Act and would not necessarily protect resellers from liability.
It should be noted that even if traditional book formats ultimately are exempted, other novelty books—soft plastic books, titles with toys affixed or incorporated, anything with soldered components, etc.—will continue to be included under the Act.
Most publishers who produce books-plus or value-added books already test them. “The Act will not materially affect our practices with respect to book-plus lines, such as Klutz and Chicken Socks, or our books with value-added components, as these have been in compliance with the most stringent safety testing standards for years,” said Meryl Wolfe, Scholastic's director of manufacturing.
“We've always complied with the voluntary standard, which is now mandated,” said Michael Levins, CEO of Innnovative Kids. “It's always been a big budget item for us.”
Publishers who sell to the leading mass merchandisers such as Target and Costco, already submit to their testing procedures, which are all unique and can be beyond the CPSIA's requirements. “There's no standard,” said Randy McDonald, v-p at Paradise Press. “That's the biggest challenge. It's almost a fulltime job for someone to keep up with all that. And nothing we've tested has been even close to being a problem.”
“No industry wants to harm a child,” said Andrews Steinberg, president of Modern Publishing. “There were good intentions behind this, but the testing has gotten so overzealous. Certain books, sure. But not all of them.”
