California Redemption Value, Out of State Refunds
California Waste Recycling- A Cash Cow For Scamsters
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Recycling is central to environmental consciousness because reusing material is superior to throwing it away. It echoes the praise we give to tribal cultures that use every part of an animal carcass, or to people who find a way to do more with less, or to those who keep their planetary footprint as small as possible. (1)
Darin Tripoli adds, “Recycling has been pounded into our heads, our childrens heads and our neighbors heads for some time now. We think that it is our moral obligation. We think that it is for a better cause. People of all walks of life recycle. It just seems like the right thing to do. I have found that just about everybody I have met recycles almost religiously.”(2)
Yet, as with all good causes, some folks find ways to scam the system. That’s what has happened in California where a generous recycling redemption program has led to rampant fraud.
Each time someone in California buys a bottle or can of Coke or Pepsi, or beer, or practically any other beverage, he or she pays a nickel deposit into a statewide pool called the Beverage Container Recycling Fund. That nickel—known as the California Redemption Value, or CRV—is essentially a bounty to encourage the consumer to return the empty bottle or can to a recycling center. (3)
In 2011, just over 8.5 billion recyclable cans were sold in California. The number redeemed for a nickel under California’s recycling law: 8.3 billion. That’s a return rate of nearly 100%. That kind of success isn’t just impressive, it’s unbelievable. But the recycling rate for certain plastic containers was even higher: 104%. (4)
All those nickels can add up to serious cash, so the system presents an alluring target for fraudsters. The neighboring states of Nevada and Arizona have lots of thirsty people who generate a mountain of empties each year, but neither state has its own version of the CRV. This disparity has inspired a new industry: enterprising individuals buy empty cans and bottles in bulk in Arizona and Nevada, at their ‘scrap’ price. Then they truck them across the state lines to California, where they collect the nickel-per-container that they never paid into the recycling fund in the first place. One rental truck can hold 10,000 pounds of aluminum cans, worth $15,000 in CRV. (3)
The illicit trade is draining the state’s $1.1 billion recycling fund. Government officials recently estimated the fraud at $40 million a year but an industry expert said it could exceed $200 million. It’s one reason the strapped fund paid out $100 million more in expenses last year than it took in from deposits and other sources. (4)
Only products sold in California are eligible. But a can is a can—and many recycling centers in California aren’t that interested in where they come from. Hence the influx from out-of-state. As someone who has used the recycling centers, I can attest to the fact that these places clearly don’t have the time to check whether a can is from out-of-state. The shear volume of material that is processed precludes this in most cases.
On a smaller scale, each week in San Francisco and in urban neighborhoods across the Bay Area, residents dutifully separate aluminum cans, glass bottles and plastic jugs from their garbage and roll their recycling bins to the curb on trash day. But before the garbage trucks even arrive, many bins are picked clean by people who take the bottles and cans to a recycling center, or a wholesale black-market collector on the corner, and turn the trash into cash. The practice is illegal and inflates garbage collection rates. The thieves often leave behind a mess on city sidewalks, but aren’t high-up on the police concern list.(5)
How to fix?
In 2011, the California Department of Resources, Recycling and Recovery, better known as CalRecycle and the California Bureau of Investigation—with the help from several county sheriff’s departments, the California Highway Patrol, and the US Marshall’s Service—arrested 32 people in five separate cases. Altogether, they had scammed the state out of more then $10.5 million (3).
To help identify people bringing cans into California, Governor Jerry Brown signed a law in September 2012 that will require those importing more than 25 pounds of aluminum or plastic or 250 pounds of glass to declare at the border what their purpose is and the source and destination of the material. (4)
- Todd Myers, Eco-Fads, (Seattle, WA, Washington Policy Center, 2011), 52
- Darin Tripoli, “Recycling and how it scams America,” yahoo.com, October 3, 2008
- Matt Jenkins, “Can bandits: recycling fraud hits California,” High Country News, April 14, 2011
- Jessica Garrison, “Recycling fraud drains California’s cash,” Los Angeles Times, October 8, 2012
- Will Kane, “Recycling bins are targets for thieves,” San Francisco Chronicle, January 2, 2013