Wal-Mart (NYSE: WMT) does not want to be known as a place where there are products that could hurt little kids. It is bad for public relations and thus bad for business. So the world's largest retailer is going to set standards for toys that are much tougher that those of the U.S. government.

According to The Wall Street Journal, Wal-Mart does not just want the toys to be manufactured more safely. The paper writes, "The initiative also encourages suppliers to mark children's products with 'traceability information', including the factory in which the goods were made. About 80% of the toys sold in the U.S., including those marketed by U.S.-based toy makers, are manufactured in China."

Wal-Mart is a little late to the party. The threat of lead and other toxins has been causing trouble for retailers for over a year. Several of the company's competitors already have similar programs in place. And Wal-Mart sources a lot of inventory in China, so it may not want to be seen as leading the pack in a public relations war with the People's Republic.

The news also begs the question of why Wal-Mart was not inspecting the toys on its own. Of course, that would be expensive.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 newsletter.

The Associated Press reports that tests on 1,200 children's products -- most of which are available for sale -- revealed that 35% contain more lead than allowed by federal recall standards used for lead paint. Lead poisoning can cause irreversible learning disabilities and behavioral problems and, at very high levels, seizures, coma, and even death

Of the toys tested from the shelves of Wal-Mart Stores Inc. (NYSE: WMT), Toys "R" Us and Babies "R" Us, here are three that had particularly high lead levels:

• A Hannah Montana card game case,
• a Go Diego Go! backpack; and
• Circo brand shoes.

Unfortunately for parents out there preparing for the upcoming holiday season, this past year's toy recalls have to be a constant reason for concern, and today we get news of another recall. By now we are pretty adjusted to reading news of recalls due to high levels of lead paint, but today's recall involves something a little more alarming ... a date rape drug!

Yes, you read that right, it has been announced that millions of toy products in North America and Australia have been taken off the shelves after it was discovered that they contained chemicals that, when digested, convert into the date rape drug gamma hydroxy butyrate (street name of GHB). The toys in question are toy beads that go by the name Aqua Dots, and are considered a highly popular holiday item, which is distributed by Toronto-based Spin Master Toys. For Australian consumers, the toy sells under the name of Bindeez.

Just how popular is this toy line? This year in Australia it was named toy of the year. Just how dangerous is the ingestion of the drug? If swallowed, one of these beads can induce unconsciousness, seizures, drowsiness, coma and death.

This holiday season parents will need to choose between buying American and getting the toys their kids want. According to USA Today, That's because 80% of all toys sold in the USA are made in China. Some internal toy-industry estimates show only about 10% are actually made here.

Not only are few toys made in the U.S. but the ones that are don't appeal to the typical American child. That's because 10% of toys that are U.S.-made are wooden, old-fashioned "nostalgia" toys, such as blocks or puzzles, that may not hold the interest of kids older than toddlers. As noted in my post last month, there's Slinky, the twisty-wire-walking toy from the 1950s, and some plastic toys like K'Nex construction sets.

And here's the bad news about U.S. toys -- while they're safer than those made in China, they have some problems of their own. For example, U.S.-made toys were the subject of four of the 40 toy recalls the Consumer Products Safety Commission (CPSC) announced in the 2006 fiscal year, or 10%. Chinese-made toys were the subject of 28, or 70%. The other recalls were divided among toys made elsewhere in Asia and Europe.

If you have advice for parents seeking safe American toys that their children will actually want to own, please comment below.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

During the recent recalls of Chinese toys due to high lead content, toymaker RC2 (NASDAQ: RCRC) has been forced to recall close to 2 million products from its Thomas & Friends product line. In an effort to make up for the mistakes, the toy maker decided to give a little something back to to consumers involved in the recalls, and you guessed it... the gifts were more products with excessive lead paints!

It blows my mind that the company has actually allowed this to happen yet again. The most recent of the company's product recalls took place last week and involved around 200,000 toys, and earlier this summer the toy maker was hit was a massive 1.5 million toy recall, so it makes sense that they would try to give something back to consumers. Unfortunately the gesture of good faith has blown up in their face.

We were alerted to this unfortunate event by The Consumerist where you can also find the official statement from the company regarding this most recent consumer slap in the face:

Unfortunately, the discovery that certain Toad vehicles could be potentially unsafe was made in August, after Toads had been sent as bonus gifts to some families. Many of the Toad bonus gifts are safe, however some may not be. If you received a Toad vehicle as a bonus gift from us, please check its underside for the tracking code 1656OW00 to determine if it is one of the recalled toys.

It is starting to sound like a broken record, but today we get news of more recalls of toys made in China. Today's annoucement involves around a little more than 600,000 items of children's toys and jewelry.

The culprit of today's recall is once again excessive amounts of lead paint in the products. About one-third of today's announced recalls by the Consumer Product Safety Commission involve the popular Thomas & Friends toy line.

Earlier this summer, RC2 (NASDAQ: RCRC), maker of the toy product line had a recall of around 1.5 million items, and today's recall involves another 200,000 more of the popular toys.

It definitely seems like there are going to be more recalls coming as more intense scrutiny gets applied to Chinese imports. With the upcoming Christmas shopping season parents are definitely going to be cautious of what they buy, and rightfully so. For a complete list of products recalled in today's recall and in past months recalls, you can find a comprehensive list on the U.S. Consumer Product Safety Commission's website.

The New York Times [registration required] reports that The Walt Disney Compnay (NYSE: DIS) is changing its policy towards the Chinese toy manufacturers that license its brands. Thanks to numerous recalls of Mattel Inc. (NYSE: MAT) toys made in China, Disney will no longer cash its licensing checks from toy makers while looking the other way on quality matters.

Now, worried about the potential damage to its brands, Disney will inspect the toys made in the likeness of its characters. Disney's tests will focus on 2,000 toymakers and 65,000 products each year. Disney's Product Integrity Office, which oversees safety programs throughout the company, including in its theme parks, is deciding how often the tests will occur.

It seems like almost every day, when I turn on my computer, I read about yet another kids' product being recalled due to high lead content. Today was no different. Today's news involved another 300,000 or so Chinese made products that have been found to posses excess levels of lead paint and recalled.

You really have to wonder just how far does this problem stretch? How long has this been going on? I, for one, have a hard time believing that this problem has just started; it has probably been going on for a long time and only now is being watched. It is a scary thought to say the least.

Today's recall involves around a quarter million pairs of SpongeBob SquarePants address books and journals that contain harmful amounts of lead in their spiral bindings. The books were sold between June 2006 and July 2007 in stores across the U.S. Late is better than never, but for the kids who had bought the books LAST JUNE, I hate to say that the damage has probably already been done. Why did it take over a year to figure this out?

The toy recall that is still gripping the attention of parents inside and outside the U.S. has brought even more scrutiny onto the problem of quality control on products made in China. Due to several high-profile food-related recalls this year (including a toothpaste and pet food recall) the Chinese supply chain was already well under fire. Additionally, some parents have indicated that they blame the companies that distributed the toys as much as they blame the Chinese manufacturers who made them.

Who is stepping in to provide damage control? Why, retailers of course. The stores that are most directly affected by parents' disinclination to buy toys right now are already deep in the game this week. Companies such as Amazon.com (NASDAQ: AMZN), eToys.com and the online division of Wal-Mart Stores, Inc. (NYSE: WMT) -- Walmart.com -- have all been communicating with online customers via email about how to take the guesswork out of product recalls. In other words, providing lists of what is and isn't on the recall list, and how to properly dispose of those toys that are being recalled. It's a great strategy to retain customers and put yourself ahead of the perceived "non-caring" retailers.