Is it really 'Made in the USA'?

First, let’s discuss what the FTC is and what it does.

Charged with preventing deception in the marketplace, the FTC Act gives the Commission the power to bring law enforcement actions against false or misleading claims that a product is of U.S. origin.

Historically, the FTC has required that any product claimed as “Made in the USA” be all or virtually all made in the U.S. without exception. After a review of its policies, the Commission announced in 1997 that it would retain the “all or virtually all” requirement as it relates to products advertised as U.S. made.

The FTC on labeling “Made in the USA” products

Interestingly enough, the FTC only requires physical labeling of automobiles, textile, wool, and fur products if “Made in the USA” claims are cited. This is where claims for products sold in the marketplace, such as trophies and awards labeled as “Made in the USA” or “Made in America,” can get dicey.

In an industry where many products are imported from China, you’ll find claims from vendors who state their awards and recognition products are “Made in the USA” even though, in truth, they may only be decorating in the USA.

That said, there can be a distinct difference between the claim “Made in the USA” and “Made in America,” as the statement America can be interpreted more broadly and may open the door to products being manufactured elsewhere, then engraved or UV printed in the U.S.

To what degree does the claim “Made in the USA” apply to marketing materials, both digital and physical?

This is a great question, especially since the FTC does not require physical labeling on products other than those listed above.

The FTC clearly states that both physical and digital channels must comply as they relate to U.S.-made claims. This includes physical application to printed product labeling, advertising, and promotional materials, plus digital outlets including electronic mechanisms such as internet or email communications.

Entire product line claims

Representing that an entire product line is of U.S. origin, such as saying “our products are made in the USA,” can be a clear violation of FTC standards. This is especially true when only some of the products in the line conform to the “all or virtually all” standard discussed above.

Who polices “Made in the USA” product claims?

Companies do not need a stamp of blessing from the FTC before making the claim “Made in the USA,” nor is there a standard of pre-approval to ensure the products you’re purchasing are in fact U.S. made.

The FTC states that an advertiser may make an advertising claim as long as it is truthful and can be substantiated.

So what does that mean to the consumer?

It means that it is the responsibility of the consumer to verify the claim of any company if they are seeking to purchase items that are truly “Made in the USA.”

Our suggestion is to ask questions about the manufacturing process, where the raw goods come from, and what processes are actually done in the U.S. by American workers. Applying the “all or virtually all” standard is a helpful way to determine if the claim is valid.

What is “All or Virtually All” as it relates to awards?

Let’s first consider the factors used by the FTC to determine whether a product is “all or virtually all” manufactured in the U.S.

Final assembly and processing

Final assembly and processing must take place in the U.S. In the case of awards, that can apply to physical assembly, gluing, laser engraving, color printing, polishing, packaging, and related production processes.

Each task is essential to the final outcome and presentation quality of fine corporate awards.

Percentage of costs assigned to U.S. components and processing

This is where it’s important to take a close look at how far removed any foreign materials or labor are from the finished product.

Sometimes only a small percentage of the raw materials that make up the final outcome of the award are of foreign origin. For example, if the trophy is made of overseas acrylic polymers that must be mixed with a U.S.-manufactured monomer, then cast, cut, fabricated, shaped, printed, engraved, assembled, polished, and packaged in the U.S., the physical material cost may be negligible when compared to the total manufacturing and labor cost. In that situation, the product may qualify as “all or virtually all” under FTC guidelines.

How raw materials factor into “Made in the USA”

The Federal Trade Commission provides a useful example of how raw materials should be factored into the “all or virtually all” standard for U.S.-made goods.

We’ve modified the example here to represent the material cost versus the labor-to-manufacture cost in relation to a gold ring with foreign minerals compared to a cast acrylic deal toy, with each using U.S. labor to fabricate and prepare for distribution.

Key takeaways if “Made in the USA” is important to your purchasing decision

• Review the FTC guidelines on what the Commission would actually classify as “Made in the USA.”
• Ask suppliers to validate their “Made in the USA” claim by explaining where their raw materials come from and what percentage of the product is actually manufactured in the U.S.
• Read customer reviews to get an understanding of the company you’re considering. Reviews can sometimes reveal discrepancies in “Made in the USA” claims by referencing delays in delivery due to inability to acquire goods.