The Recycling Armageddon Hits California

rePlanet Is Closing Down

The Large Chain of Bottle and Can CRV Redemption Centers Is Gone. About 800 Employees Lose Jobs.

Consumers Losing Millions in CRV System and Now Cannot Find Deposit Refund Locations.

by Paul Hunt

“Canageddon”, the Recycling Armageddon has hit California. The huge project to Recycle bottles and cans is spinning out of control amidst a seemingly never ending assault of criminals, fraudsters and mis-management.  The two big factors of the week is the decline in redemption centers like rePlanet, where consumers can turn in their bottles and cans and get their cash deposit back, and a double whammy as China has just announced an astounding 25 percent tariff tax on recycled products shipped to China.

As consumers face mounting problems finding a place to redeem their bottles and cans, the State has failed to provide convenient locations to do so.  Facing insolvency, private companies are closing down, and some partner Cities like Santa Monica, are shutting down their recycling yards.  The State, however, continues to rake in millions of dollars per year.  Simply put, everyone pays the deposit fee of 5 cents or 10 cents per beverage container (depending on size).  This money is supposed to be held in trust for the consumer until the bottles and cans are returned.  The big factor here is that the State takes in hundreds of millions, and by letting redemption centers and recycling yards close down, they pay out less and less every year back to the consumer, thus making more money every year.

A Merry-Go-Round of corruption. 

The State’s program is rife with fraud and corruption.  Here’s a few bullet points:

–Independent Recycling yards have been caught “laundering” bottles and cans from out of state.  Since the price, say for a pound of aluminum cans is less than the CRV deposit of 5 cents each can, crooks are bringing in tons of the cheap cans from Arizona and Nevada and selling them to California for CRV.  These cans are not marked on the bottom with California’s unique recycle logo, but is anyone checking?

–The distributors and large outfits are responsible for paying the CRV to the State.  Here’s a good one:  Walmart, one of the biggest players “forgot” to pay the State for 5 years.  When they were caught by a routine audit, it was found that they owed $14.5 million dollars.  Out of about 3,000 distributors only about 50 are audited every year.

–Since inflation eats into the profit and operating costs of companies, many outlets and redemption centers are closing down.  In the last few years over 1,300 redemption centers have closed.  As the expenses rise, like wages, many companies start losing money, because they are stuck with a set CRV.  In times past, when the world economy was growing, China paid more for the aluminum than the CRV, so the centers could pay the consumers their deposit back and still make money selling to China.

–China just announced that they are going to slap on a whopping 25 percent tariff on recycled materials coming into their country.  This is in retaliation for the U.S. putting tariffs on Chinese goods.  The price of recyled materials is dropping way below the CRV, another loss for the redemption yards.

–The Cities are also shutting down their yards that pay CRV deposits to consumers.  They found a better way to scam money out of this.  The yards were also losing money in higher labor costs and lower pricing on the  recycled bottles and cans.  By shutting down the yard, there is no more pay-out to the consumer, no more wages to employees, no more employees at all.  A big savings.  Meanwhile they tell the consumers to please put their bottles and cans into the blue recycling bins at their house or apartment.  This gives a huge flow of material to the City that they can sell back to the State.  It is estimated that this “curbside” collection scheme costs cities about 20 million to run but throw off an astounding $140 million in profit!

–And then there is the lazy consumer.   The CRV deposit is  only a nickle or a dime, chump change, so why bother with it?  That’s exactly what the State wants the consumer to do:  be lazy and forget about getting your deposit back.  The State then reaps in something like $200,000,000 every year in the difference, unclaimed deposit money.

–Homeless folks and low income folks often have turned to recyling to augment or make a meagre  living with CRV.  Lots of folks collect cans and bottles.  These folks are now being shut out by the closing down of payment centers.

Back to rePlanet, one of the few redemption outfits.  Their locations are being closed.  Calls to their corporate office go to a recording that they are closed.  Calls to David Lawrence, the CEO and also the head of media relations, don’t get a response.  Neighbors at some of  the redemption huts say that Friday August 2nd was their last day.  Employees were told a couple hours before closing that they were being laid off.  rePlanet had 800 or so employees at one time.  Now they are out of a job, like the employees of the Santa Monica recycling center and over a thousand other centers.  The State agency, CalRecycle, put out a one line statement “CalRecycle is working to gather more information about rePlanet’s announced closures and the resulting impact on California consumers.”  (rePlanet has nothing about closing on it’s webpage.).  Buckle up folks, it’s CANAGEDDON.

Many thanks to Susan Collins of Container Recycling Institute for an astounding amount of research on their web site.