Congress is trying to protect children, but it's imperiling the country's mom-and-pop toy stores at the same time, shop owners say.
Following the China toy recalls, Congress passed the Consumer Product Safety Improvement Act (CPSIA) to impose stricter lead restrictions on toys for children under 12. The law, which goes into effect Feb. 10, applies to incoming and current inventory. In three months, stores and manufacturers must test their toys, provide proper documentation on lead content and remove tainted products. That may improve safety, but the law could deliver a death sentence to some small businesses.
Related Video
The law targets a wide range of products: bikes, clothes, shoes, video games, even all-natural unpainted wooden toys. Enchanted Toys, a specialty toy store on the Upper East Side of Manhattan, sells only wooden toys but still rented a scanner to test for lead, which can cost up to $1,150 for two days. Gloria Mills, manager and buyer, wasn't concerned about the safety of her products but was nervous about the amount of documentation required for each toy. "Now small manufactures will get run out of business," she says.
Toy-store owners around the country face fines and jail time if they can't show proper testing documentation by the time the law goes into effect. Testing costs can range from $300 to $3,000, and manufacturers are passing those expenses on to toy stores in price increases of 10% to 30%. Big retailers like Wal-Mart (Stock Quote: WMT), Toys R Us and Target (Stock Quote:TGT) may benefit from the law, as they can withstand those cost hikes.
Paul Nippes, owner of Kidding Around, a specialty toy store in Manhattan, has had to raise prices by 10%. "We can't absorb 10% from manufacturers."
