How and why Michigan’s deposit system works

The Michigan deposit system for beverage containers is illustrated below, showing the flow of both beverage products and the ten-cent deposit.


As the product is delivered to stores and sold to consumers, the ten-cent deposit moves in four steps, from wholesaler to store to consumer. As the used containers are redeemed in the stores, the ten-cent deposit moves in the opposite direction.

Why Deposits Work 

1. Incentives – the difference a dime makes.

The ten-cent deposit changes the perception of the container from trash, to an item  with monetary value.

The deposit motivates participation by  the vast majority of otherwise indifferent consumers. In other words, many people who do not recycle are driven to return their recyclable containers to stores to get their money back.

Currently, ten US states offer deposit-return for a variety of beverage containers. Collectively,  these states show a recovery rate of 76% on deposit-bearing containers. By comparison states that do not have beverage container deposit programs show a collective recovery rate of just 24% on beverage containers.* Source: Wasting and Recycling Trends: Conclusions from CRI’s 2008 Beverage Data Market Analysis, 2008, Container Recycling Institute.

Since on-the-go beverage containers (those consumed away from home) make up a significant portion of consumption (30-50%)*, and recycling options away from home are limited, a refundable deposit provides a clear financial incentive to return deposit containers for recycling. *The American Beverage Association

2. Return-to-retail is a convenient and efficient method for consumers.

Shoppers can return their bottles and cans at the store where they shop and do not have to make additional stops. Numerous studies and surveys (including Shop Where You Drop, A Survey of Consumer Bottle Return Habits”, New York Public Interest Research Group, 2013) have demonstrated that consumers prefer this method of return over bottle and can redemption at a separate location.

3. Collection and processing of separated material creates a valuable commodity.

The quality of material collected through the container deposit program is substantially higher than that collected through curbside recycling. There is zero waste – 100% of the material is recycled, where material from curbside collection has a loss of 30-50% due to contamination. Why is this important? Because the quality of the feedstock to industry is what makes Michigan’s system tax-free and financially viable.

There is a strong demand by industry for clean uncontaminated recycled material. Recycled beverage container material from deposit return is more likely to be sold to regional end-markets, rather than off-shore.

“Not only do deposit states lead in terms of high recovery rates, but in general, they also supply recyclers with the highest quality scrap material compared with any other type of recycling program in the US, which improves overall efficiency in terms of processing and remanufacturing.” – “Mitigating Climate Change,” May 2013 by the Container Recycling Institute

4. The system is self-supporting and requires no taxpayer funding.

5. Roads, lakes and waterways are kept cleaner, enhancing tourism and saving taxpayer money on cleanup.

In lakefront beach clean-up litter audits conducted by the Great Lakes Alliance in Michigan and four other non-deposit Midwestern states (Indiana, Wisconsin, Ohio and Illinois) from 2002-2013, the proportion of cans and bottles in Michigan’s beach litter was half of that in the non-deposit states. A Clean and Green Vermont, 2013 Container Recycling Institute and VPIRG (Vermont Public Interest Research Group)

6. The current system uses less energy than other systems.

Trucks moving used beverage containers from the state’s largest retailers are fueled with compressed natural gas.  These vehicles haul many more containers per mile and more efficiently than any other system.