The company, in conjunction with the U.S. Consumer Product Safety Commission, said Thursday that the dehumidifiers can overheat, smoke, melt and catch fire.
The company has received 107 incident reports, three for smoke inhalation injuries. The reports include more than $7 million in property damage.
The white plastic dehumidifiers were made between 2003 and 2005 and sold in 35-, 50-, and 70-pint versions.
Owners can receive a Sears gift card for $75, $80, $90 or $100 based on the size and age of the unit. Owners can also request a refund.
Sears says consumers should immediately unplug the dehumidifiers.