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Wal-Mart (NYSE: WMT) continues to sell a number of products which contain high lead levels and some of these are toys. The same is true about children’s products sold by Target (NYSE: TGT), according to The Center for Environmental Health. The California Attorney General has notified the companies. Target has suspended all sales of the products identified by CEH. Wal-Mart, however, has not.

“We cannot understand how Wal-Mart can continue to sell these lead-tainted products to children in any state, or any country,” said Caroline Cox, Research Director at CEH, in a statement.

One high chair sold at Target had 70 times the allowable level of lead. Tests of Walmart products discovered high lead levels in toddlers’ bean bag chairs, youth boxing gloves and toy foam beads sold for children’s jewelry. The items ranged from more than 3 times to more than 45 times the legal limit. In all, CEH tested components of 2,300 products of children’s toys between September of last year and July 2010.

The report exposes the issue of why large retailers do not have aggressive inspection programs. The answer is almost certainly cost. Fines are probably cheaper than the armies of inspectors needed to review products for high levels of dangerous paint, metals, and components. This duty falls to the federal government, which has neither the resources nor the personnel to properly do the job.

One of the wonderful things about big business in the US is the cat and mouse games it plays with regulators. This is particularly true with large firms involved in pollution and worker safety problems. Most problems are discovered after the fact–after some incident, perhaps a significant one, has been discovered. BP plc (NYSE: BP) and Johnson & Johnson (NYSE: JNJ) stand as recent signature cases.

Wal-Mart is large enough to inspect what it puts on its shelves. The world’s largest retailer might argue that such programs would be expensive but what kind of excuse is that?

Douglas A. McIntyre