As we’ve noted in other posts, an FTC rule prohibits companies from stating or implying that a product is made in the USA unless: (1) the final assembly or processing of the product occurs in the USA; (2) all significant processing that goes into the product occurs in the USA; and (3) all or virtually all ingredients or components are made or sourced in the USA. It can be a challenge to figure out whether a product you make meets that standard, but it’s even harder to figure that out for products you didn’t make.
This month, the FTC published a closing letter in an investigation about “Made in USA” claims that Crate and Barrel made about various products that were made by other companies. Although the case doesn’t break new ground, the steps that Crate and Barrel promised to take related to “Made in USA” claims on its site could provide some helpful guidance about what the FTC expects retailers to do when making claims about other companies’ products.
Crate and Barrel promised to:
- only make US-origin claims if the responsible manufacturer or supplier has signed and submitted appropriate documentation substantiating the claim;
- impose contractual obligations on vendors to update substantiation as circumstances require; and
- prompt vendors to check and re-certify origin claims on a regular basis.
Retailers should be careful about simply using “Made in USA” claims provided by suppliers without doing some level of due-diligence. Taking the steps outlined above should provide a good start.