U.S. parents want safer toys, but will cost them

By Justin Grant

NEW YORK (Reuters) - The recent flurry of toy recalls because of lead-paint contamination and other safety issues will ultimately cost worried parents more than just lost peace of mind.

It could also cost them in the check-out line.

Since June -- when RC2 Corp recalled 1.5 million Thomas & Friends wooden trains when it was discovered they may have contained excessive amounts of lead paint -- many toy makers have passed along the costs of increased random factory inspections and extra layers of product testing in an effort to beat back industrial malpractice.

With this year's toy prices already set, analysts said the additional safety measures will show up on price tags next year, making new toys more expensive.

"All those costs do add up ... Anything that's a new introduction, you can make that price point $19.99 rather than $14.99," BMO Capital Markets analyst Gerrick Johnson said.

"In the future, I definitely think there will be some additional costs of doing business and getting products to market."

More than 20 million toys made in China have been recalled over the last three months, mostly due to the use of lead paint, which is toxic and can pose serious health risks, including brain damage, in children.

With more than 80 percent of toys on U.S. shelves marked "made in China," toy makers have been taking a closer look at their overseas operations.