Unforeseen consequences from the rise of online sales

Written on: April 1, 2022 by Nicholas Georges

It’s an understatement to say that online sales have had an enormous impact on business, especially during the COVID-19 pandemic. The growing role of E-commerce has resulted in unique changes within organizations—both from operational and sales strategy perspectives.

However, online sales have also impacted Research & Development (R&D) and Regulatory departments and packaging must now be looked at in a different light. R&D teams must develop packaging solutions that minimize material usage, utilize more sustainable materials, optimize packaging size and maximize recyclability—all while ensuring that the product is protected from the factory to the customer’s door. Meanwhile, the Regulatory team must ensure these innovations comply with various regulations.

Companies that manufacture and market commercial, institutional and industrial products need to be aware of their obligations related to the Poison Prevention Packaging Act (PPPA). Regulated by the U.S. Consumer Product Safety Commission (CPSC), the PPPA requires child-resistant and adult- friendly packaging (also referred to as special packaging) for many household products that may be considered hazardous. Ultimately, the packaging needs to be difficult enough for children under the age of five to open, while still being accessible for elderly adults. Many products are required to undergo child-resistant packaging (CRP) testing to ensure they meet PPPA requirements. CRP testing facilities have been burdened during the pandemic, so CPSC has issued temporary allowances to meet these requirements.i

E-commerce has increased consumers’ access to products, including those not necessarily intended for their use, such as products specifically used in hospitals or schools. As a result, these products may require special packaging that’s compliant with the PPPA.

CPSC recently issued guidanceii clarifying that it does not recognize an “institutional use” exception for household substances that require special packaging under the PPPA. Even substances intended for institutional use only, and labeled as such, must be in special packaging unless the packaging meets one of the recognized limited exemptions.iii,iv

According to the PPPA, a household substancev is any substance that is produced or distributed for consumption or use, stored by individuals in/around the house and that is:

1. A hazardous substance as that term is defined in section 2(f) of the Federal Hazardous Substances Actvi

2. A food, drug or cosmetic as those terms are defined in section 201 of the Federal Food, Drug & Cosmetic Actvii

3. A substance intended for use as fuel when stored in a portable container and used in the heating, cooking or refrigeration system of a house

There are also specific chemicals that are requiredviii to be packaged in special packaging, such as products containing 4% or more of methanol or 10% or more of turpentine. Additionally, according to CPSCix, products packaged in a container with a capacity of five gallons or more are not subject to PPPA requirements. Consumers are not typically purchasing products in five-gallon pails or larger packaging sizes, so they are not required to be in special packaging.

Under this guidance, CPSC does not have a PPPA compliance exception for products that are intended for commercial, institutional or industrial settings. Even when that is the intention, companies have to understand—and even control their channels of distribution—to ensure that these products do not end up in the hands of consumers; otherwise, the product may be subject to PPPA requirements.

E-commerce has increased consumers’ access to products and companies must now consider how and where a product is advertised, marketed, sold and distributed, as well as its distribution chain, the packaging configuration and any product reviews or other evidence that may demonstrate the nature and extent of consumer use.

Online sales have increased the number of products that consumers have access to, including those that they wouldn’t have typically been able to access through storefronts. As a result, companies must be aware of the potential obligations their products must meet, such as PPPA requirements.

The Household & Commercial Products Association (HCPA) will be hosting a workshop in 2022 with CPSC staff to help attendees understand these and other regulations. For more information, please contact me at ngeorges@thehcpa.org. SPRAY

i CPSC’s third PPPA enforcement discretion letter can be found here
ii CPSC’s guidance entitled Poison Prevention Packaging Act (PPPA) Updated Guidance on Substances Not Intended for Household Use can be found here
iii 15 U.S.C. § 1473(a)
iv 15 U.S.C. §1473(b)
v 16 CFR § 1700.1(b)(2)
vi 15 U.S.C. 1261(f)
vii 21 U.S.C. 321
viii 16 CFR § 1700.14
ix 16 CFR § 1701.3