“Made in the USA” claims are closely monitored by the Federal Trade Commission (FTC). Companies that promote products using this claim must be able to show that all or virtually all of the product was made in the United States. Determining whether that standard is met can become complicated when recycled materials are involved.
FTC Investigation
A jewelry manufacturer came under FTC investigation after advertising products made from recycled metals as “Made in the USA.” The company collected previously manufactured jewelry, melted it down, and used the material to create new pieces. Recycling metals is not unusual; however, the FTC questioned whether the finished products could accurately be marketed as domestic. When the source of the original materials is unclear, FTC policy requires that nearly all components and manufacturing occur in the United States for an unqualified “Made in USA” claim.
The manufacturer argued that the recycling process altered the materials, refining the metals to a high level of purity and giving them what it described as a “new lifecycle.” Because the melting and manufacturing processes occurred in the United States, the company maintained that the claim was justified.
Consumer Perception Evidence
As part of its review, the FTC examined consumer perception of “Made in the USA” claims through survey research. The surveys indicated that 57% of consumers believe the claim referred to all parts of a product, including raw materials. In addition, 33% of consumers believed that 100% of a product must originate in a country for it to be advertised as “Made in” that country. These findings suggested that consumers interpret the claim broadly and may assume that both materials and manufacturing originate domestically.
FTC Determination
Since the origin of the recycled metals could not be clearly traced, the FTC concluded that the company could not make an unqualified “Made in the USA” claim. Manufacturers using this claim must be able to show that nearly all components and production occur within the United States or qualify the claim in a clear way. “Made in the USA” claims evaluated under established FTC standards can require survey evidence to help regulators understand how consumers interpret these claims and whether the advertising may be misleading.
IMS Legal Strategies designs and conducts consumer perception surveys, research used in regulatory matters, and advertising claim substantiation. Contact IMS if you face scrutiny and require consumer perception research.
