Dive Brief:

• Best Buy has agreed to pay a $3.8 million civil penalty for knowingly selling and distributing some 600 recalled items, including 400 recalled Canon cameras, from 2010 to 2015, the U.S. Consumer Product Safety Commission announced Monday.

• The CPSC found that Best Buy did not adequately implement procedures to "identify, quarantine and prevent the sales of the recalled products across all of its supply channels," after being contacted by the commission, and continued to sell 16 different recalled products during the timeframe in question.

• The Best Buy/CPSC agreement does not include any admission of wrongdoing. A Best Buy spokesperson told The Wall Street Journal by email: “[W]e regret that any products within the scope of a recall were not removed entirely from our shelves and online channels. While the number of items accidentally sold was small, even one was too many. We have taken steps, in cooperation with the CPSC, to help prevent these issues from recurring.” 

Dive Insight:

While Best Buy was able to slink out of admitting it was wrong to sell recalled products, it will maintain a compliance program to ensure appropriate disposal of recalled products. Such products included devices like dishwashers, computers, dehumidifiers, flat screen televisions and office chairs.

Best Buy doesn’t have a lot of wiggle room in a fiercely competitive electronics retail market, and by continuing the sale of these products (which in some cases were recalled because of significant safety risks such fire, burn, shock or expelled parts), it is risking customer trust.

Amazon would be more than happy to pick up any customers that end up turning away from the retailer. In June, Deutsche Bank reported that Amazon accounted for a whopping 90% of the $5.6 billion growth in consumer electronics sales posted nationwide last year.

Five years ago, Amazon had just 6.2% share and ranked No. 4 on the list of top 100 U.S. electronics retailers. Today, it's No. 2 with 17.0% share, jumping ahead of Wal-Mart, according to Barron’s. That’s adding to Best Buy’s swift loss in market share: Consumer electronics sales grew 28% at Amazon in 2015, compared to same-store sales increases of 4.3% at Apple and 3.8% at Best Buy.

But Best Buy isn't showing signs it's going down without a fight. In a report that handily beat expectations, the retailer announced in August that second quarter online sales rose nearly 24% for the second consecutive quarter, and same-store sales in the period increased 0.8%. Its Q2 total revenue increased to $8.53 billion.