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The ‘return-to-retail’ collection model for container deposit schemes

Image of retailer with shopper at reverse vending machine in return-to-retail model
As consumption of beverage containers and plastic pollution rises worldwide, more and more regions are seeking to implement container deposit schemes to drive recycling. Legislators have many options for designing their deposit models, and an approach that has achieved impressive return rates is ‘return-to-retail’ collection, where stores selling beverages receive those containers back for recycling.

22 January 2019

The world is on a plastics spree. The global consumption of plastic drinking bottles hit 480 billion in 2016 and is set to increase by 20% in the lead-up to 2021. Rising volumes of litter and ocean plastic are putting pressure on governments, businesses and consumers to address the environmental impact of beverage container waste.

A container deposit scheme (CDS) offers an effective solution for collecting and recycling these containers, reducing pollution by incentivizing consumers to return their empties. Forty markets worldwide have adopted a deposit return system on single-use containers, with numerous ways to implement such programs. A key question for legislators in designing new container deposit schemes is where to place return points: at multiple smaller locations, or at fewer, dedicated depots?

One approach is the ‘return-to-retail’ model, where the stores selling beverages become legally responsible for accepting used containers for recycling. This achieves up to 99% return rates in the best-performing markets. Offering convenient locations for consumers and faster roll-out for legislators, this model also benefits retailers through increased footfall, financial incentives like handling fees, and an improved corporate image.

TOMRA has first-hand insight into different collection models and the recycling results they achieve. Founded in 1972, TOMRA collects 35 billion containers for recycling annually through 82,000 reverse vending installations worldwide. TOMRA has vast experience in markets that legislate retailer participation, as well as in markets with central depots, and hybrid models offering both types of collection points. Here is how the return-to-retail CDS model works and what it means for government, business and consumers.

What is the return-to-retail model?

Image of shopper recycling in return to retail model

Return-to-retail legislation in container deposit schemes requires stores selling beverage containers to also collect them for recycling after use. Stores gain an opportunity to help recycle a retail product that can otherwise end up polluting streets, parks and oceans.

Depending on the CDS design, return-to-retail legislation might apply only to larger supermarkets exceeding a specific floor size, or also include smaller convenience stores. For example, in Lithuania’s return-to-retail scheme, urban stores over 300sqm are required to accept used containers (smaller urban stores can opt in), as are all stores in rural areas. 

For efficiency purposes, shops often decide to provide reverse vending machines (RVMs) for their consumers. Located indoors or outdoors, RVMs make container returns fast and convenient. RVMs count and analyze containers, reject ineligible items and pay refunds. Faster than manual handling, the automated RVMs also ensure that container returns take the least personnel time possible from other in-store tasks. 

Return-to-retail results

'Pure' return-to-retail models exist across the world, including nine European markets, the US state of Michigan, and the Canadian territories Ontario, Manitoba and Quebec. Ten additional markets have hybrid models featuring some retailer participation.

Germany, which introduced a return-to-retail CDS in 2003, sees 98% of plastic bottles collected and 99% of cans. Norway, where TOMRA pioneered the first RVMs in 1972, returns 92% of all beverage containers for recycling

The world’s eight best-performing container deposit schemes employ return-to-retail collection, achieving an average return rate of 93%. Regions without retail involvement average 77% returns, with some markets as low as 48%.

For government

With convenient locations and the strong track record of the return-to-retail model, legislators are more likely to achieve positive community response and higher return rates. A significant improvement in recycling can be achieved quickly, such as Lithuania seeing beverage container return rates rise from 34% to 92% within just two years of launching its return-to-retail CDS – an environmental and economic success that’s also reflected as a policy success.

With supermarkets located close to residential areas, the infrastructure for this model is already in place, so a return-to-retail approach removes the need to build or outfit new recycling depots. As such, the deposit return schemes can launch more cost-effectively and faster – a key consideration in short delivery timeframes. Supermarket chains typically have networks across whole markets, including remote communities, ensuring recycling points are available for everyone. Supermarkets already accommodate truck access, for dedicated pick-up of returned containers or backhauling to their central warehouse. This means a more organized, efficient collection structure, lower costs and fewer trucks on roads.  

Finally, return-to-retail collection often avoids extra costs. Non-retail redemption operators tend to incur higher handling fees, require funding for site maintenance, and charge commercial rates for services like bin changing and refunds.

For retailers

Participation in container deposit schemes brings several tangible benefits to stores:

  1. Increased footfall. Retail returns of drink containers bring more store visits, especially when recycling refunds are paid out as in-store credit, also driving repeat custom. A survey of reverse vending users in Sweden found that 93% shopped at the store when they recycled, and 44% did their full shopping trip for the week. In another study across four countries, shoppers returning containers spent more money in that store visit than those who did not return empties. 
  2. Financial reimbursement. Many markets pay retailers a handling fee for each container received, to recuperate any initial investment and operational costs. This continues as revenue once the investment is covered.
  3. Brand image. Retailers build their corporate image, showing the store’s corporate social responsibility and supporting sustainability initiatives.
  4. Richer data. Today’s reverse vending machines offer retailers a range of digital products to enhance customer service and the overall recycling experience. This includes user analytics, marketing channels and consumer engagement opportunities.  
  5. Operational support. Leading reverse vending providers like TOMRA provide expert advice on the most suitable reverse vending machines, as well as service and support after installation. TOMRA offers a wide range of solutions for retailers – from the largest hypermarket to the smallest corner store – so that RVMs can have a very small footprint and be tailored to each retailer's space.  

 

Several options exist for stores to finance RVMs. In some return-to-retail regions, retailers purchase the machines, while in other markets they lease or simply 'host' the RVMs. In Lithuania, the investment in RVM infrastructure was taken by TOMRA, so that eligible stores received an RVM free of charge, removing capital expenditure. The Lithuanian CDS system operator pays stores a handling fee per collected container, and a 'throughput' fee to TOMRA.

For consumers

In consumer behavior, convenience is king. Engagement and return rates improve with easy access to supermarkets, rather than dedicated deposit depots that are fewer in number and located further from residential areas. By positioning container return facilities in locations people already regularly visit, recycling becomes a normalized behavior, part of consumers’ established shopping routines.

Recycler travel times are essentially eliminated, because container returns are done at the same time as regular shopping trips. This removes the barrier of ‘going out of your way’ to recycle and means fewer cars on roads, reducing congestion, fuel consumption and air pollution. 

With many supermarkets and grocery stores available, consumers can access multiple return points locally. This reduces wait times, so consumers can take a ‘little and often’ approach to recycling. In user surveys, over 75% of respondents said having access to an RVM without queuing was extremely important in returning their empties.

As a return point is often located at a store’s entrance – the customer’s first impression of the store – retailers keep the surrounding area clean and tidy. As return points have the same opening hours as the stores themselves, redemption opening times are easy for consumers to remember, and staff are always on hand if return points require any attention. Consumers enjoy their recycling experience, to the benefit of themselves and the retailer, and to the benefit of a more sustainable environment. 

The future of return-to-retail recycling

The momentum towards implementing container deposit schemes continues. As more markets introduce this legislation, the clearer it becomes that model design – including the extent of retailer participation – greatly influences return rates. 

As plastic consumption levels are set to rise by 20% in the next three years alone, we need a resource revolution now more than ever. By adopting a return-to-retail approach, governments, businesses and consumers can help increase the effectiveness of container deposit schemes and reduce the impact of container waste on the planet.

About TOMRA Collection Solutions:

Founded in 1972, TOMRA is the preferred partner for reverse vending solutions for collecting, reusing and recycling cans and bottles. The TOMRA system has the machines, digital solutions and service to make recycling easy for the industry, system owners, retailers and consumers. With over 82,000 installations across more than 60 markets, TOMRA’s reverse vending machines capture 35 billion used beverage containers every year – reducing reliance on raw materials and ensuring fewer containers end up in landfills, oceans and streets. Visit our Reverse Vending pages on www.tomra.com, and follow us on Facebook, Instagram, Twitter and LinkedIn.

TOMRA Collection Solutions is part of the TOMRA Group, which creates sensor-based solutions for optimal resource productivity, and has a vision to lead the Resource Revolution. The Group employs approximately 3,550 people globally and is publicly listed on the Oslo Stock Exchange (OSE: TOM).

For more information please contact Alexandra Ugland, Communications Manager at TOMRA Collection Solutions. 

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