Prevention cost is a pervasive consideration in quality programs. It entails calculating the expense of producing a product without defects and imperfections. It encompasses the cost of preparing and training employees to prevent defects from occurring in the final product. With more money placed in prevention, failure costs will diminish. The Lundvall–Juran Quality Cost Model, however, shows that there is a point where increased prevention cost has a diminishing return in failure cost. If the incentive is solely based on direct monetary value, then funds to prevention cost will equal that of failure cost. This assessment could have unforeseen indirect costs.

For example, in 1999 The Detroit Free Press published an editorial regarding the recall of Sara Lee hot dogs and lunch meat responsible for an outbreak of listeriosis. Sara Lee had to incur newspaper advertising costs to assist in announcing the recall. The cost of disposing the recalled product, additional advertisement to announce the recall, and staffing to respond to customer concerns would be direct failure costs. However, additional failure costs in the form of a 19% drop in stock, and possible non–returning customers have an indirect impact on the profits of Sara Lee. Calculating these secondary costs should make the prevention costs of ensuring high sanitation standards more financially attractive in the quality decision–making process.

Prevention costs are a pervasive consideration in quality programs. It is usually cheaper to train employees in conforming to the corporation's standards on quality than the rippling effect of failure cost. By taking steps to ensure in every process defects are minimized, the resulting product will relay to the consumer the corporation's commitment to quality.