Bottle-deposit fraud target of new state bills

December 5, 2008
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LANSING — Michigan’s bottle return law, passed in 1976, is responsible for the nation’s  best bottle and can recycling rates. According to the Michigan Department of the Treasury, 97 percent of beer and soft drink containers are returned.

But with success comes trouble.

Bottle return fraud costs Michigan $10 million a year, according to the Treasury Department. It’s from out-of-state purchases crossing the state line and people returning containers that weren’t charged the deposit.

That’s why Rep. Steve Beida, D-Warren, is sponsoring a package of bills establishing criminal penalties for returning containers from outside Michigan. The package also would allocate $2 million over two years for retrofitting return machines to identify out-of-state bottles. Other measures include requiring retail stores to post signs about the penalties and to establish a limit on the number of containers returned on a single visit.

But Linda Gobler, president of the Michigan Grocers Association, said she was afraid Gov. Jennifer Granholm would cut the $2 million in retrofitting aid, leaving the burden on the retail stores.

“In this economy, we don’t understand why the state would want to put extra burden on the grocers of the state,” she said.

“Michigan has one of the worst recycling rates in the country. We should focus on a comprehensive recycling plan rather than just bottles.”

Gobler was referring to the recycling rate for cardboard, paper and plastic.

The association also doesn’t support the bill that would include water bottles and other containers in the bottle law.

Gobler said grocers already have problems with storage and maintenance of bottle returns in the current situation. Also, vendors like Coca Cola and Budweiser have direct delivery, and when they deliver their product, they take cans and bottles away. No such system exists for bottled water or energy drinks, the ones gaining the most popularity.

Dave Nyberg, policy specialist for the Michigan United Conservation Clubs, which sponsored the bill, said expansion and fraud protection are necessary to keep the bottle law effective.

“Non-carbonated beverage sales will surpass pop sales by 2010,” he said. “If we don’t update the law, things will go back to the condition in the 1970s.”

Nyberg said the law was passed to keep litter off roadsides and broken glass away from children. In 1978, a survey showed 230 bottles and cans per mile accumulated along Michigan roads. In 1979, the number was 45 bottles and cans per mile, according to a Department of Environmental Quality study.

Ron Gruizenga, assistant manager at Harding’s Market in Three Rivers, said that at a small store they don’t have many problems with fraud. His store doesn’t have return machines and they only accept up to $10 in returns per visit.

“But when I was in Kalamazoo we had people use a Bridge Card to buy cheap pop, pour it out by the dumpsters and try to return it for money,” he said. “People find all kinds of ways to cheat it.”

Gruizenga said the fraud package would be a good idea because it stops people before they can cash in. He also supports the expansion of the bottle law. “As long as they’re labeled with the deposit, it’s not a problem.” Indiana doesn’t include deposit information on cans sold there. Gruizenga said it would simplify energy drinks, too, as some include deposits and some don’t.

“It’s better than people just throwing them away,” he said.

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