Monday, January 5, 2009

Laws with Unintended Consequences

From Jill, an interesting article that is touching off discussions in both the personal finance blogosphere and a small, yet important, sector of the retail industry.  A little known law called the Consumer Product Safety Improvement Act (CPSIA) is about to go in effect that requires any product sold for users 12 years old and under--like toys, backpacks, and clothing--to be tested for lead and other chemicals.  This isn't a problem for large manufacturers (who can easily swallow the added costs of testing), and it's fantastic for children, who will (presumably) not be consuming products that have lead in it anymore, but it's posing serious problems for small toymakers, retailers, and consignment/thrift store owners, whose margins are either too small, or non-existent as non-profits, to pay for testing of second hand stores.

 What doesn't get covered in the article is that this doesn't seem to affect clothing donations, just items that are sold.  Now, obviously, there are a ton of issues differentiating buying from a thrift store and going to a clothing bank, but at least on some level, the law doesn't prevent those who most need to clothe their children to get the clothes they need. 

The other thing is that this is just a matter of one or two fallow cycles of hand-me-downs.  Presumably, in a few months to years, a generation of kids will outgrow their new, tested clothes, and they'll enter the second-hand stream.  There will be some lumps in the next few months and years, but it doesn't have to be the death blow some of these owners are making it out to be.  

That said, it seems like there should be a grandfather clause/some sort of phasing in to mitigate this.  While kids shouldn't be subjected to leaded clothing, it seems like the business concerns of these small consignment/thrift stores should be represented, at least to some degree, and at least concerning clothing.  

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