Effective deposit return systems work with return point operators to ensure the efficient collection of large quantities of beverage containers from consumers. As we learned with Principle 6: Fair Pay for Service Providers, the businesses providing that service receive a per unit “handling fee” to offset the costs incurred in hosting and operating a return point. And that handling fee needs to be fair.

The entities involved in preparing containers for shipment to final recycling markets by sorting, counting, crushing, and/or baling the various materials are also typically paid a fee for each eligible container they process. This payment is often referred to as a “processing fee.”

Handling Fees

Appropriate and fair handling fees encourage investments by the redemption location. Principle 6 outlines the key factors to consider when setting handling fees, but when it comes to regulatory best practices, here are the main topics and recommendations to take into account:

Processing Fees and Requirements

Processing fees are typically negotiated in a service contract and set on a per-container or tonnage basis. They tend to be most influenced by material and size of container, sales volume, who owns the scrap material, and the level of automation involved in processing the containers.

Effective legislation also sets out processing requirements for deposit initiators, such as producers or distributors, to ensure they take back their containers from the retailers they deliver to or from the authorised redemption centre that serves those retailers. Some DRS jurisdictions also require:

• Minimum pickup frequency (e.g., once every two weeks)
• Volume-based pickup requirement (e.g., once 10,000 beverage containers are amassed)
• Minimum operating hours for return points 

Implementing robust quality assurance processes for reconciling depot and/or processing centre counts, particularly for manual collections, is crucial for minimising the potential for overcounting and other fraudulent activity within a DRS. In instances where the use of automated counting and sorting equipment for containers is minimal, ensuring effective quality control measures becomes paramount.

Incidents of counting centres inflating the reported number of containers for their own financial benefit have been observed in both Canadian and U.S. programs. While auditing procedures have been implemented to address and curb such fraudulent actions, legislators must continue to prioritise mitigation strategies to safeguard the integrity of the system.

Just as meaningful deposit levels are essential for achieving high redemption rates, handling fees are a critical part of what makes DRSs work well. This is especially true in jurisdictions where there is no legal obligation on retailers to provide take-back services. Handling fees should be determined based on the actual cost of service.

Similarly, careful determination of processing fees and requirements greatly impacts system outcomes. Experience shows considerable benefits of automation in reducing fraud. And the use of spot audits to verify the number of declared containers against the number received at processing centres serves as a valuable tool in mitigating potential fraud within the system.

Case Study: Norway

In Norway’s DRS, the handling fee incorporates the costs of staff time, retail space utilised, and any RVM capital costs, with a premium placed on efficient operations. Consequently, manual collection receives a lower handling fee, to reflect the fact that a compacting RVM enables efficiencies in transportation since a truck can fit more containers. Compacted containers are also more fraud-proof.

Infinitum is the system operator. Its board, which includes equal representation from the beverage and retail industries, sets the handling fees. This encourages transparency and fair decision-making.

Since Infinitum works as a single material owner, the material can be collected and processed together and does not need to be separated by brand, which further increases the efficiency of the system. All revenues from the sale of material are reinvested back into the system.