By Randy Hutchison
President of the BBB
Reprinted from The Daily Memphian
Many consumers want to buy products that are made in America, but have no independent way to verify the claim. They rely on product labeling and other marketing statements that aren’t always true.
The FTC issued guidelines for making unqualified “Made in USA” or similar claims in 1997. In 2022, it adopted the Made in USA Labeling Rule (MUSA) that codified its guidelines and added more enforcement authority, including the ability to impose fines on companies that make misleading claims about the origin of their products. The guidelines also make it clear the rules apply to advertising mediums beyond just labels.
An unqualified “Made in USA” claim requires that all or virtually all of the product has been made in America. Significant parts, processing and assembly, and the labor that go into it must be of U.S. origin. It should contain no or negligible foreign content. Qualified claims are permitted if they’re accurate. They might include “Made in U.S. from Imported Parts” or “Assembled in U.S.A.”
Implied claims are also subject to MUSA. For example, describing the “true American quality” of the work produced at a company’s American factory could give the impression that the product is of U.S. origin. If it isn’t, the statement would likely violate MUSA.
The agency filed its first complaint using its new authority when it challenged claims made by Lithionics that the company’s lithium ion cells are made in the United States when in fact they’re imported from China. It later reached a settlement with another company called Lions Not Sheep that made similarly bogus claims about the origin of its politically-themed t-shirts and other apparel.
In the action against Lions Not Sheep, the director of the FTC’s Bureau of Consumer Protection said, “Companies that slap phony Made in USA labels on imported goods are cheating their customers and undercutting honest businesses.”
Sometimes the honest businesses take action against their dishonest competitors. In October, a jury in Wisconsin ordered Lucky Shot USA to pay $3.1 million in damages to a competitor after falsely claiming its drinkware with bullets embedded in the side are American-made when they’re actually made in China. The competitor, BenShot, has made similar products in the USA since 2015.
The owner of BenShot, Ben Wolfgram, said, “We’re proud of what we do, and we’re proud of where we do it. It would be a lot cheaper – and easier – to have our glassware made in China, but that’s not what we’re about, and it’s not what our customers want.”
If it’s important to you that a product is truly made in the United States, research the reputation of the manufacturer or marketer making the claim, including with the BBB, to be sure they’re trustworthy. Read labels and marketing materials carefully to pick up on any qualifications that might affect your decision to buy the product.