Next year, the government is implementing a Deposit Return Scheme (DRS) to encourage consumers to return their empty drink containers for recycling.
Reverse vending machine experts Envipco look at what this means for retailers and consumers.
In Ireland, we consume over 1.7 billion single- use drink containers every year, many of which end up on our streets as litter, in landfill sites, or are incinerated.
The issue here is two-fold – firstly, we pollute our beautiful country with non-biodegradable materials and, secondly, we waste valuable resources that could be recycled and used repeatedly.
Under the Irish government’s DRS, the consumer will be charged a deposit when they purchase a drink and will have that deposit refunded once they return it. Other countries using a Deposit Return Scheme achieve recycling rates of over 90%.
This deposit return scheme is law from 1 February 2024 (that’s only 10 weeks away) and everyone selling drink containers in Ireland must participate or they will have to stop selling drinks!
That might still seem a distance away, but be aware that the preparations normally take longer than that (hardware, POS upgrade, etc.).
Reverse Vending Machines
The easiest way to collect these returned drink containers is to use a ReverseVendingMachine (RVM).
This machine accepts the container, confirms what it is (check barcode, check dimensions, check weight, etc.), compacts the material to enable efficient storage and logistics, and then authorises the return of the deposit with a voucher.
The voucher can then be scanned at the checkout to reduce the customer’s shopping bill or create a cash credit.
Finally, the machine reports the data back to the system administrator (Re- turn), who then credits the retailer for all the deposits returned to consumers and pays the retailer a handling fee to cover the cost of the service they are offering.
The Retailer
For the retailer, the Reverse Vending Machine fully automates this entire process.
Without it, everything must be completed manually over the counter.
Some retailers may choose to avoid offering the return service to their customers and apply for an exemption (although they still must pay and then charge the deposit).
In this circumstance, theretailer must clearly display the location of the nearest deposit return point, so that their customers can still return the used containers and reclaim their original deposit.
Therein lies the dilemma for the retailer.
By sending their customers to their local competition, they lose footfall from week one, as their loyal customer is presented with a voucher at the competitor’s store, which usually gets spent on a basket of shopping there instead.
From the customers point of view, the first few weeks can come as a shock, as an average 24 x multipack of 500ml water increases by €3.60.
In most cases, this is a more than 50% increase in the overall price, which is why the refund process is so important.
If, as a retailer, you are offering this service to your customers, then this weekly spend for many households will be a one-off.
As the deposit is circular, you get it back before you buy the same multipack next week.
Look at it like the consumer is borrowing the bottle each time.
Many independent retailers initially view this as a burden and another cost to their business.
However, offering a deposit return service is generally cashflow positive for the retailer.
Once they take the handling fee into account, they get paid, and the €6,000 Re-turn rebate is available to all stores collecting less than 686 containers per day (on average).
So, as a retailer, you should really think about offering this service to your customers because, without it, you’re proactively sending them to your competition... and some may not come back!
Envipco: Preferred Supplier Of RVMs
At Envipco, we have spent 40 years designing and manufacturing Reverse Vending Machines and we have been at the forefront of technological developments regarding RVMs over the years.
We have a full range of RVMs, from industrial-sized machines down to our market-leading Flex RVM, that are designed specifically for the convenience sector.
In fact, Envipco is the preferred supplier of RVMs all over the world for some of the largest names in retail.
For further information, you can contact us to help you prepare for the Deposit Return Scheme at: [email protected] or by calling (01) 524 1249.
Read More: Minister Smyth Tells Checkout Why Ireland Needs A Deposit Return Scheme
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