As Holidays Near, A Race To Keep Toys Safe

At the legendary toy store FAO Schwarz, the Christmas catalogs had already been printed and the holiday toys were already on the barges when recalls started happening this summer. It's forced FAO and others to play a game of catch-up.

"The vast majority of toys, really, the manufacturers and the brands haven't been able to get in and change anything," said FAO Schwarz's CEO Ed Schmults. "What they've been doing is testing vigorously."

Popular playthings have been arriving by the hundreds at labs like one CBS News transportation and consumer safety correspondent Nancy Cordes visited in New Jersey.

There, they scrape the paint off to test for lead - and all too often, they find it.

Just this week, ten more kids' products were recalled due to lead.

"The vast majority of toys that we are seeing that have problems are originating in China," said James Menoutis, the president and lab director of Quantex.

Mattel, at the center of the recall firestorm, has banned its Chinese contractors from outsourcing their work.

Hasbro is checking paint before, during and after production.

The maker of Thomas and Friends is now testing toys from every production run.

These are changes that will make a difference next Christmas. In the meantime, here's the bottom line.

"The toy industry is going to great lengths to retest all of the product coming into the United States for the holiday season to be sure there's no lead in it," said the Toy Industry Association's Carter Keithley.

As for the retail giants - Wal-Mart says it's doing 200 extra tests a day starting with toys for kids under 3.

Sears, K-mart, Target and Toys "R" Us have also developed new testing regimens, though none would do an interview about it - or show us their testing.

"In this case of Barbie, it was the dog," said Julie Vallese of the Consumer Product Safety Commission.

The government body that oversees toy safety, the CPSC, says the lead contamination has run the gamut - from dangerous levels in children's jewelry, to just a dot in the middle of the hubcap on a Sarge car toy, modeled after Pixar's "Cars."

"Just because a toy is in violation, does not mean a child will get sick," Vallese said.

Looking to repair its tainted reputation, the toy industry is working up plans for an independent testing organization.

It would be modeled after Underwriters Laboratories, or UL, which certifies electronics, and has 1,200 testers in China alone.

"Having an independent third party mark on a product, like a UL mark, says to the customer this product has been tested by an independent laboratory, a laboratory that has no conflict of interest in any way," said Kurt Williams, CEO of Underwriters Laboratory.

But that will take a year or more to create.

In the meantime, FAO Schwarz is playing a hopeful tune. After all, parents need to buy presents.

Schmults told Cordes: "People ask me, 'are all the toys made in China unsafe?' I say 'no.' They say, 'are all the toys made in the U.S. safe?' I say, you know, also 'no!'"

Still, it's the U.S.-made toys he's highlighting this holiday - along with those from Germany and Spain … anywhere but China.

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    Nancy Cordes is CBS News' congressional correspondent.