A key stop on a beverage container’s journey through a DRS is the retailer or redemption centre that collects it from the consumer, then handles, sorts, and stores the redeemed container before it gets picked up for recycling.

We know from all available research in the US and Europe that collecting and sorting containers in a modernised DRS creates new jobs. 

Reloop North America did targeted research on the impacts of DRS modernisation of five Northeast states (CT, ME, MA, NY, VT) and found, among others, this economic impact:

While this is good news, the point is not just about the quantity of jobs, it’s also about the quality of pay for workers at the return points. The work of collecting, sorting, and storing those beverage containers does not, and should not, come free. The businesses providing the service rightfully receive a “handling fee” calculated to offset the costs incurred in hosting and operating a return point. And that handling fee needs to be fair.

Handling fees are best set to allow for flexibility based on the cost of the actual service provided. Setting them in legislation only politicises the process and subjects legislators to lobbying from retailers eager for a fee increase and from producers generally opposed to any change that increases their costs.

Who sets the handling fees? That depends on whether the DRS is centralised or decentralised. In a centralised system — used in all of Canada, most of Europe, and a few states (Oregon, California, Hawaii) —the system operator determines the fee. In a decentralised system, it may be done by the regulating authority. (Details coming up soon in Principle 8: Clear System Standards & Functions, as well as when we move into our 10 Essential Practices to build into bottle bill legislation and running a DRS.) 

Who pays the handling fees? Always the system operator, which usually means the producers. In California, however, it’s an entity named CalRecyle. In Hawaii, it’s the Department of Health.

Questions to consider when setting the right and fair handling fee need to take into account the realities of return points, including:

• Is the return point a retailer or a stand-alone redemption centre?
• How are the beverage containers recovered?  Are they handled manually by workers or automatically via reverse vending machines (RVMs)?
• What is the condition of the containers they handle? Are they compacted or uncompacted?
• What is the container material?  What are the different handling costs for each type of material (e.g., aluminium, PET plastic, glass)?
• Is a commingling agreement in place (where containers are sorted by type and size rather than by brand)?
• What are the local costs of space, labour, equipment purchase and maintenance, site setup and maintenance, and utilities?

Reviewing handling fees at set periods, either annually or biannually, by the system operator or the state agency, in consultation with return point operators, helps guarantee they remain responsive to changing conditions.

Modernising a DRS with fair handling fees pays dividends in multiple ways. The existing and newly created jobs are filled by workers who are paid fairly, resulting in greater retention and less recruitment and training. Installing technology at redemption points allows the counting of containers using their barcodes. Barcode counting not only helps mitigate fraud but can also be used to accurately determine fair handling fees for return locations.

In Principle #9: Producer Reporting on Units Sold we learn more about this and how all 10 Principles work together for a high-performing deposit return system that returns economic and environmental benefits for all.