In the first 12 months of the deposit return scheme, consumers have parted with millions of euro in “deposits” at the tills, but are they getting their money back?
The fiddly receipt-like refund vouchers feel like an anachronistic addition to a payments universe when many consumers are using virtual wallets, digital payment cards and loyalty apps.
The upside of the scheme, of course, is that millions of plastic bottles and aluminium and steel cans have been diverted from landfill and litter – to the degree that people were discarding them rather than recycling via their domestic waste collections.
But is the scheme rewarding supermarkets more than consumers for the effort?
If consumers aren’t careful about their deposit refunds, they may find themselves quids out of pocket.
Cost
Since February last year, 15 cent or 25 cent has been added to the cost of plastic drink bottles and aluminium and steel cans in your weekly shop. The scheme promotes recycling but, introduced in the middle of a cost-of-living crisis, the extra cost at the till wasn’t welcome news.
You’d get your “deposit” back on returning the empties but adding precious euro to grocery bills at a time of inflationary price increases was certainly felt.
In the year since the scheme was introduced, people in Ireland appear to have taken to it like ducks to water. By the end of its first year, more than 980 million containers were collected, exceeding the expectations of those rolling it out.
With a deposit of 15 cent on containers from 150ml to 500ml and 25 cent for containers over 500ml and under 3l, the value of the refund vouchers generated in the first year of the scheme amounted to between €147 million and €245 million of consumers’ money.
SuperValu and Centra marked the first 12 months of the scheme by announcing that 210 million containers have been returned through their stores. That means between €31.5 million and €52.5 million worth of refund vouchers were issued from reverse vending machines in their stores.
But while the deposit is taken from the consumer seamlessly at the till as it is added on to the price of the item, its return isn’t quite so straightforward.
The paper refund vouchers have some limits, and they also force consumers to take a few more steps to get their money back. This can end up costing them, rewarding retailers more than consumers for the effort to recycle.
Here’s what you can do to make sure your deposit doesn’t end up leaving you in the red.
Avoid a shopping event
You can only get your deposit back at the shop where you returned the recycled items. You can get it in cash at the till, or by using the refund voucher to pay for shopping there.
This, however, is more than nudging you to turn your recycling event into a shopping trip. By making you go to a point of sale to reclaim your own money, you are being nudged towards purchasing something you otherwise might not have intended to.
If you have a few grocery items to pick up anyway, great; otherwise you may end up buying more stuff.
It pays to remind yourself that the deposit return voucher isn’t free money or a “reward”. It’s a refund of your own money taken from you in an earlier transaction.
You can return containers bought anywhere to any store participating in the scheme, but the refund voucher issued from a store’s reverse vending machine can only be redeemed in that store.
This limits where you can spend your refund. Keep control of your spending by only recycling at stores that represent value for money to you, or where you do your shopping anyway.
By returning containers to coincide with your weekly shop, for example, your refund is more likely to go towards items you need.
Get cash
One way to remove the limitation of where you can spend your refunded money is to take it to the till, eschewing the coffees and croissants en route, and convert it to cash. You’ll have to queue at the till but converting it to cash untethers your refund from a particular retailer and means you can use it for other things.
Some retailers have launched savings cards enabling customers to put their refunded money on a store card. By loading their refunds on to a savings card, customers can keep all their refunded money in one place, topping up the cards at the checkout.
Retailers say it gives shoppers a convenient way to save money towards future planned purchases.
However, unlike exchanging your refund voucher for cash, committing it to a retailer’s savings card locks you into spending the money with that retailer. But if it’s a retailer you frequent anyway, it can be a good way to save up your refunds towards Christmas, for example, rather than frittering it on small discretionary purchases during the year.
Aldi, which launched a bespoke deposit return savings card this year, says it had 200 million returns in Ireland in the scheme’s first year. Its shoppers returned more than €30 million worth of bottles and cans to machines across Aldi’s 163 Irish stores in the year to February 2024, the retailer says.
That’s a lot of consumer money. If customers were to commit their refunds to an Aldi savings card rather than cashing them in, it would certainly leave Aldi quids in.
By placing a value on the drinks containers, the scheme is incentivising consumers to return their bottles and cans in order to get their deposit back and discourage littering, according to Re-turn, which operates the scheme. It’s a circular economy initiative that aims to create a “closed loop” recycling system, guaranteeing the material is returned and recycled into new drinks containers, says Re-turn.
It would be great if the deposit money looped out of consumers’ pockets at the till did not have to go through so many loops to get refunded. Having it credited to your bank account would do nicely.
You can contact us at OnTheMoney@irishtimes.com with personal finance questions you would like to see us address. If you missed last week’s newsletter, you can read it here.
