Business hasn’t been great at RideNow Powersports, off Ina Road near Old Father. The specialty motorcycle/ATV store struggles to navigate the recession.
Added to the dealership’s woes: Several unsalable child ATVs that are double-stacked in crates outside.
The bad economy hasn’t prevented general manager Chris Chesnut from selling the kid-sized four-wheelers — the government has.
“We didn’t see this coming,” Chesnut said of a new federal law that effectively outlawed any lead-containing product intended for children.
Signed in 2008 by then-President George W. Bush, the Consumer Product Safety Improvement Act became law in early February.
Most of the new rules focus on lead, a common ingredient in metallic items, and phthalates, a chemical product that provides plastics with increased flexibility.
Products for children 12-years-old and younger can’t contain lead or phthalates in high levels.
Children’s products currently can have 600 parts per million or lead.
The new law limits the level to 100 parts per million in three years. Also, it reduces to 0.1 percent the phthalate content in children’s products.
Manufacturers would have to verify through independent laboratory tests that their products don’t exceed the proscribed levels.
Distributors and retailers also would have to verify the products’ safety.
By all accounts, the law grew out of good intentions — a reaction to some high-profile child deaths from lead poisoning.
One recent case, which drew considerable attention, involved a 7-year-old child who died after swallowing a nearly 100-percent lead charm that came with a pair of children’s shoes.
Fears multiplied in recent years when the public learned that millions of lead-tainted products had slipped into the country from China.
The new lead law easily passed in both houses of Congress. After a month on the books, however, groups have pointed out numerous unintended consequences of the legislation.
The law has hit motorsport dealers especially hard.
Because the law took effect retroactively, many ATV dealers have raided their inventories of nearly all children’s products.
Parts like starters, brakes and batteries all contain lead in higher concentrations than the law allows.
Ride Now’s Chesnut has pulled items like the kids’ ATVs and almost every associated after-market part.
“We currently have about $35,000 to $40,000 of non-salable merchandise,” Chesnut said. “I have people calling me saying: ‘Why can’t I buy parts for the bike that you sold me?’”
Since February, the store has sacrificed more than $70,000 in inventory that was until a few weeks ago perfectly legal.
Dealers have lobbied manufacturers to buy back the products — to no avail. “They’ve said point blank, ‘No,’” Chesnut said.
Most manufacturers didn’t notify dealers until mid-January that the new law would change the way they do business, Chesnut said.
It’s not just toy and other manufacturers of children’s products that have run up against the regulatory regime.
Used booksellers also could find themselves on the wrong side of the new law.
Before 1985, many books contained lead-based pigments and inks.
While regulations and new printing technologies have eliminated the need for the potentially harmful colorings, older volumes still find their way onto shelves.
Under the law, used bookstores could be liable for selling potentially hazardous products.
“Initially, there was concern among a lot of second-hand dealers,” said Sean Feeney, executive vice president of Bookmans Entertainment Exchange, which operates a store off Ina Road.
Feeney said the firm has researched which products to guard against.
“It would be an incredible tragedy if we got to a point where we had to throw books away,” Feeney said recently.
Consignment and thrift stores also must exercise caution.
The Salvation Army, Goodwill and other groups seek changes to the law.
Independent testing of donated children’s items would not be feasible, Salvation Army officials contend.
The charity likely would discard all children’s items from its stores — a potential $100-million hit.
The new law has no shortage of critics.
California attorney Gary Wolensky represents nearly 50 manufacturers and retailers with concerns about financial consequences of the law.
“This act applies to all consumer goods that are subject to any standard, ban or rules under the Consumer Product Safety Commission,” Wolensky said. “This is going to be a bonanza for regulations by the CPSC.”
Since the law took effect, he estimates that retailers and manufacturers nationwide have pulled merchandise worth hundreds of millions of dollars.
Congress imposed strict enforcement deadlines. To date, regulators have offered little in the way of reprieve to businesses.
A recent announcement of a one-year enforcement delay so regulators can fine-tune the law does little to fix what critics see as impractical provisions of the law.
“The most important thing, and the most damaging part for businesses, is the totally unrealistic and inflexible deadlines imposed by Congress,” Wolensky said.
The law opens the doors to frivolous lawsuits, Wolensky argues. “This will also be a feeding frenzy by state attorneys’ general.”
Some in Congress have proposed changes to the sweeping act, including exemptions from lead-level testing requirements for second-hand shops.
Arizona Republican Rep. John Shadegg proposes other exemptions for small and family-owned businesses.
Shadegg, along with all but one member of the Arizona Congressional delegation, voted for the act. Republican Sen. Jon Kyl was among three who voted against the law.
Arizona Rep. Gabrielle Giffords (D-Tucson), who also voted for the law, was unavailable for comment, but a spokesperson said the congresswoman “is aware of some of the unintended consequences of this legislation.”
Until changes are made, businesses must find ways to adjust.
For Ride Now, that means lobbying suppliers to build products it can sell or sacrificing up to 10 percent of the dealership’s business — the percentage of the store’s sales that comes from kids’ products.
“If they produce a product that we can’t sell,” Chesnut said, “then we’re out of the kid business.”