Under a deposit-refund system, certain products or containers have a special front-end surcharge, or deposit, placed on them by manufacturers. This surcharge is then refunded to the consumer when he or she returns quantities of the containers or products for recycling or proper disposal.
Historically, deposit-refund systems have been applied, primarily at the state level, to glass, aluminum, or plastic drink bottles and cans. Nine states currently have a 5-cent deposit-refund on soft-drink bottles and cans, and one state has a 10-cent deposit-refund. These systems are being expanded to include other types of products as well. For example, in some areas deposit refunds are being applied to office products, such as photocopy machine toner cartridges. States like Maine and Rhode Island have established deposit-refund systems to encourage the recycling of lead-acid/automobile batteries.
State deposit-refund systems provide an incentive to recycle and, therefore, reduce the quantity of solid waste produced. The systems also can help state regulatory agencies reach their enforcement and compliance program objectives by reducing the need for additional regulatory resources. Theoretically, any product that is currently disposable and contains materials that can be reused is a candidate for a deposit-refund system.
For more information on deposit-refund systems, check out EPA's Guidebook of Financial Tools: Paying for Environmental Systems (PDF) [233 pp, 2.6MB]
What are deposit-refund systems?
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