BJ’s to Pay $9M for Not Reporting Potentially Fatal Hazard
BJ’s Wholesale Club is in hot water for a line of portable air conditioners sold in its stores. The U.S. Consumer Product Safety Commission (CPSC) announced that the discount operator has agreed to pay $9 million in civil penalties.
The CPSC alleged that BJ’s had information “reasonably supporting” the conclusion that the air conditioners produced by Royal Sovereign International and sold by BJ’s between 2011 and 2012 had a defect in the drain monitor that could ignite the units. According to the independent federal agency, BJ’s learned of a 2016 fatal fire associated with a portable air conditioner purchased at one of its locations by at least 2017; the retailer issued a safety notice to Royal Sovereign units in March 2021, three months after the official recall by Royal Sovereign and the CPSC.
[Read more: “FTC Goes After Amazon”]
The penalty was levied by the CPSC by a 4-0 vote. “Together with my fellow Commissioners, I voted to approve a proposed settlement agreement with BJ’s Wholesale and to send an important message about retailer responsibility,” said Commissioner Mary T. Boyle, who was appointed by President Joe Biden in 2022. “Because CPSC does not provide pre-market approval of products, we must rely heavily on firms throughout the distribution chain to meet their legal obligation to report defects and hazards. Those firms are in the best position to know what is happening with their products. The law requires them to report, and it is critical that they do so. Lives depend on it."
Alexander Hoen Saric, chairman of the Commission, pointed out that retailers are required to inform the USPSC of products that can cause serious injury or death. “In this case, BJ’s did not report to the Commission when they learned of a death from the product in 2017. BJ’s did not report even when it notified its own customers to stop using the product due to safety concerns,” Hoehn-Saric declared.
In addition to the hefty fines, the settlement with BJ’s includes an agreement that the company will maintain internal controls and procedures to comply with the Consumer Product Safety Act and submit compliance reports to the agency for the next three years.
BJ’s did not issue a statement in response to the settlement. In August, the wholesaler reported that net sales declined 2.9% and total revenues dipped 2.7% during the second quarter on a year-over-year basis.
Marlborough, Mass.-based BJ’s currently operates over 230 clubs and 168 BJ’s Gas locations in 19 states. The company is No. 27 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America.
