I was doing some training last week and we were talking about the risk of rodents. I brought up the Family Dollar saga that hit the news last year and the fact that they recalled around $34 million worth of products. If you want to learn more about what happened, you can click here. What we are going to talk about today is the cost of pest control and what can happen if you don’t have good service.
Okay, the Family Dollar issue was a bit of an outlier, most facilities don’t get to that severe of an infestation. But it can happen (check out the Foster Farms tale here). When it does happen, there are many things to consider.
1. The cost of recalls – In this case, it was $34 million dollars. They supposedly recalled over 400 different products. The cost can range depending on how many products are considered adulterated (AKA: contaminated) and need to be recalled. Remember that products held under “insanitary conditions” are considered adulterated. So you don’t need to have pests in the food, or even pest parts, droppings, hairs, or other pest “pieces” in the food. Just being in an area that is infested with pests means the products can be recalled. Starbucks just recalled 300,000 bottles of their frappuccinos. I’ll let you do the math on that one. Oh, and the costs of covering the postage, disposal costs, or other costs associated with recalling products? Yep, that’s on the manufacturer too!
Fun fact – did you know before FSMA was enacted in 2011, there was no such thing as a mandatory recall? Every recall was a voluntary recall issued by the manufacturer. The government couldn’t force it.
2. The cost of shut downs – along with shutting down the distribution warehouse that was the source of the rodent problem, they shut down over 400 stores in six states. It wasn’t even a national recall. However, the money lost by shutting down over 400 stores had to be in the millions. Using some fuzzy math, one site lists the net sales of all stores at 1.6 million. If we take that and apply it to just eight states, it’s something around $700 per day per store. If they were kind enough to still pay their workers for the lost time (I highly doubt it though) that’s even more money out of their pocket.
Fun fact – did you know that in 2022 (last year of full reporting) there were 220 recalls of food(s).
3. The cost of cleaning – and there will be lots of cleaning. All those dead rodents (over 1000 after the first fumigation), cleaning of the urine and feces, and just general disinfection because you really don’t know where the rodents were roaming. There’s the hourly wage to pay workers to do all this. That’s just the distribution center. Remember those 400+ stores that were closed because the distribution center was literally delivering rodents to them? Yep, all those need to be cleaned too.
Fun fact – the average hourly wage for dollar store employees is $10 an hour. Multiply that by 400 stores, and multiple employees over multiple hours… add a few extra thousand dollars to the total.
4. The cost of extra pest control – hopefully a lot of extra pest control. The distribution center had a fumigation performed. Fumigations are not cheap treatments. It takes a lot of labor to seal up the building, run lines, install fans, take readings, set guards, and more. Then there is the cost of the gas itself. Even though a fumigation takes around three days (more for bigger facilities), it is costly. Hopefully, additional rodent control measures were installed. Extra rodenticide bait stations on the outside, many more traps on the inside, and possibly more rodent management methods. It’s not just the physical devices that cost more, the pest control company needs to check them which takes more time = more money.
Fun fact – many pest control companies have been using the same rodent bait for years. This means rodent populations may have become resistant or averse to the bait, causing additional problems.
5. The cost of fixing the conducive conditions – or getting a new facility. The people in charge decided to leave this facility and move into a new one. All those rodents didn’t magically appear, they probably came in from the outside. So there were openings that needed sealing. Hiring a professional to thoroughly improve the structure and permanently seal openings against rodent incursions would be an additional cost. Since a fumigation has no residual effects (once the treatment is completed, it won’t affect future rodents), rodents can walk in (run in? sneak in? saunter in?) and start infesting as soon as the treatment is cleared.
Fun fact – many sites want to seal as cheaply as possible which often means foam sealant. Rodents will easily chew through this and steel wool is no better.
6. The cost of consumer confidence – once you say your product/store/area is infested with pests, consumers will think twice about shopping. There is no way to calculate how many people will decline to shop at these stores because of the stories they hear. In the affected states, it’s likely many people went to find alternative stores to shop at. It may be short term or long term. Either way, it’s additional lost money. There may even be publicized boycotts.
Fun fact – Consider this: you are a new parent and just find out the baby food you are feeding your infant has been recalled. Would you ever go back to buying it?
7. The cost of fines – while no fines have been assessed at this time, my guess is there will be FDA fines. OSHA has fined some Family Dollar stores almost $700,00 for safety violations. While these fines are regularly lowered significantly, when you add up fines for over 400 stores, it can quickly add up. While the pest issue didn’t cause any reported deaths (as opposed to the Peanut Corp. of America matter), it’s unlikely anyone will go to jail. The fines may be assessed to the company and high ranking officials in the company.
Fun fact – the only reason the FDA investigated the distribution center is that an employee lodged a complaint. Without the whistle-blower complaint, it’s unknown how long (and how bad) this situation could have gone on.
8. The cost of lawsuits – in this case, the state of Arkansas is suing the parent company. There is also talk of multiple civil lawsuits. This definitely benefits the lawyers but costs the company as well as the taxpayers (if the state sues). Prolonged battles will rage in the courts if the company doesn’t make a deal. Even with a deal, the company is likely to pay out millions between class actions, lawyer fees, and court fees.
Fun fact – right now class action suits are going on in Virginia, Mississippi, and Louisiana.
I’m sure there are a few other costs I have missed, but as this situation plays out, I will try to keep updating.
The moral of this story is that pest control services are worth the cost. I provide independent consultation to companies to help solve current problems, put preventative measures in place, and help them work better with their pest management providers. My hourly and daily rates aren’t cheap. But when you compare them to a potential recall, or even the potential to dispose of products that can’t go to sale, my rates are minuscule.
If you are a pest control company, reducing your rates may not be the best solution. You are providing a valuable service to protect these companies' products, reputations, and the safety of their employees and customers. Discounting your services discounts the value you provide. Next time the customer says “that costs too much”, remind them how much it can cost if they don’t!
If you are a commercial facility, most pest control companies are not trying to rip you off, they are trying to provide adequate prevention and management to your site. If a site wants to just choose the lowest price, they will get the lowest level of service and protection. You choose: prevention costs upfront, or risking a higher cost if things go wrong.
This has been a long one, thanks for getting to the end, you know there’s going to be a lagniappe here as a reward! Whether you are a pest control company looking to improve your service (and reduce call-backs) or a company that wants to reduce your risk and improve your pest prevention system, we can help you with all of that. Click here!
Lagniappe – you want it, I’ve got it….here you go!
Urban pest consulting