You know Dasher and Dancer and Prancer and Vixen. Cadmium, mercury, arsenic and chlorine. But, do you recall

Yes, they have been recalled. Again and again.

The epidemic of foreign-made toxic toys making its way onto retail shelves might be best described as something out of a science fiction movie rather than a beloved holiday song.

In 2007 alone, more than 17 million toys were recalled because they violated federal lead paint standards. In January 2010, the Consumer Products Safety Commission (CPSC) recalled 55,000 units of children’s costume jewelry that contained high levels of cadmium and in June of this year, 12 million promotional drinking glasses sold at McDonald’s were recalled because the painted coating contained cadmium.

For parents, figuring out which toys are healthy, which have been recalled and which ones your kids are least likely to lick or otherwise ingest can be a full time job.

But, there may be one silver lining to this cloud of toxic toys: It is creating an opportunity for small American businesses to break into the toy market, which has traditionally been very difficult to do.

Nimble newbies

“Small companies, particularly startups, are well positioned to meet customer demand for greener products,” said Sally Edwards, a sustainability researcher at the University of Massachusetts.  “The process of figuring out how to make the safest, healthiest, greenest toys is easier to do on a small scale than on large scale. Many small companies have benefitted from being able to design the product from the ground up.”

That has been the case for Green Toys, a San Francisco-based toy manufacturer that uses recycled plastic milk jugs to make its line of classic toys that come in recycled cardboard packaging.

“Innovation comes from startups,” said Robert von Goeben, president of Green Toys, which currently sells its toys in 3,000 retail locations and exports to 12 foreign countries. We make fine, detailed toys because our manufacturing process started from scratch knowing what we would be using recycled plastic, which is different to work with than new plastic, von Goeben said.