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Definition: a Product Recall is a request to return a product by its manufacturer or distributor, normally after the discovery of a safety issue or another major product defect that might endanger the consumer or put the maker/seller at risk of legal action.
It is an effort to limit the damage done to the corporate image and brand and to limit any liability for corporate negligence, which can cause significant legal costs.
Recalls are typically very costly, but can be legally compulsory. A firm may also initiate a recall voluntarily.
A brand’s recall may hurt its rivals as well.