Williams Sonoma to Pay $1 Million to FTC for Falsely Labeling Products as Made in USA

Williams Sonoma advertised its Goldtouch Bakeware line as “made in the USA” when it was actually imported, according to a Federal Trade Commission investigation. | Images courtesy FTC

The Federal Trade Commission announced a historic settlement on Monday with the retailer.

We’re taking a brief break in our coronavirus coverage today to let you know about a major development at the Federal Trade Commission (FTC) in the effort to stop “Made in USA” mislabeling. 

Rejuvenation brand products were advertised as “Made Right in America” but were actually wholly imported, or contain significant imported materials or components, according to the FTC.

The FTC announced on Monday that retailer Williams Sonoma has agreed to pay $1 million after several of its products were found to be labeled as “all or virtually all made in the United States” when, in fact, they were imported.

Monday’s announcement is big news, because it’s the first time that the FTC has issued a financial penalty against a company for false “Made in USA” claims.

While the FTC has found dozens of companies guilty of misleading “Made in USA” labeling over the past 25 years, the companies didn’t even get a slap on the wrist. Forget fines; no notices to consumers were issued. The companies didn’t even have to admit any wrongdoing!

But it appears momentum is changing.

AAM President Scott Paul participated in a FTC workshop in September 2019 on the issue, where he and other participants urged the agency to strengthen its “Made in USA” enforcement mechanisms. Thousands of AAM supporters also petitioned the agency to get tougher on “Made in USA” cheaters.

On Monday, the FTC finally announced some real action.

“Many of us want to buy products that are made in the USA, and we trust companies like Williams-Sonoma to tell us the truth," Andrew Smith, the director of the FTC’s Bureau of Consumer Protection, said in a press release. “When a company falls short, we will hold it accountable.”

Indeed, Williams Sonoma was found to have mislabeled several products as “Made in USA” across its wide array of brands, including Pottery Barn and Rejuvenation.

The FTC investigation into Williams Sonoma began in 2018, when it received reports that the company was claiming its Pottery Barn Teen organic mattress pads were being advertised as “Crafted in America from local and imported materials,” but were actually manufactured in China.

Williams Sonoma corrected the country of origin information on the mattress pads and agreed to comply with the FTC’s requirement to “undertake a larger review of its country-of-origin verification process,” according to the FTC. The investigation was closed in June 2018.

But consumer complaints kept rolling in.

According to the FTC, Williams Sonoma was found to have mislead consumers about its Goldtouch Bakeware kitchen products and furniture sold by Rejuvenation, Pottery Barn Teen and Pottery Barn Kids.

These weren’t just a few inaccurate labels buried on the sides of boxes, either. The company heavily pushed “Made in the USA” on its website and in email marketing, and even put together a video about the Pottery Barn furniture being “Made in America.”

“Made in America” was a big part of the marketing of Pottery Barn Teen products, even though the items did not meet the requirements to be labeled as Made in the USA.

But according to the FTC, the products were “wholly imported, or contain significant imported materials or components. Therefore, Williams-Sonoma allegedly deceived consumers with its broad claims that all items in these product lines are all or virtually all made in in the United States.”

This really gets to the heart of the problem with false “Made in USA” labeling.

Consumers who look for a “Made in USA” label – especially on big ticket items like furniture – are consciously making a buying choice. They are purposely seeking to spend their money on something made in the United States, supporting local jobs and reinvesting in American communities.

Sometimes, consumers are even willing to spend a little more money to do so. It means something.

Retailers like Williams Sonoma know that “Made in USA” is a good selling point. It can make for good business. It’s a great ad campaign.

But it takes work to make a product locally – American Giant created an entire supply chain for its line of apparel, for example. Most companies, especially those that have a built-in business model that’s heavily reliant on imports, don’t typically want to do all the hard work that’s behind that “Made in USA” label.

And because in the past the FTC had not been willing to get tough, the cheaters got away with it.

Today’s FTC announcement is a major step forward. We encourage the agency to keep up its work investigating companies that purposely mislabel their products AND be willing to strongly enforce the rules when cheaters are discovered.