California’s venerable bottle bill was once the envy of the world—a model for how to encourage consumers to reduce waste. Today, the system is in deep trouble. It is saddled with a half billion dollars in backlogged deposits owed to consumers, a crippling shortage of recycling centers, and, according to a new report, a plague of retailers who break the law daily by refusing to accept customers’ empties or refund their deposits.  

“California’s bottle bill, one of the state’s landmark environmental laws, is in a growing state of crisis,” the just-released report from the Berkeley-based nonprofit the Story of Stuff Project, says. “The redemption rate—the number of bottles and cans returned in exchange for the deposit—now stands at about 58 percent, one of the lowest rates in the program’s history and one of the lowest among the 10 deposit states in the nation.” 

The shuttering of more than half the state’s recycling centers in recent years led to a massive surplus of deposit funds sitting idly in state coffers. Built of the nickel and dime deposits everyone pays in the checkout line, the surplus of unrefunded deposits reached a record $529 million in January 2022.  

Retailers who sell beverages and collect the deposits are required by law to pick up the slack when there are no other redemption and recycling options within a half-mile radius. This is what the state calls a “convenience zone,” beyond which consumers become less likely to turn in their containers. But the Story of Stuff Project’s survey revealed that nearly half of retailers who are legally required to accept empties and refund deposits are failing to do so, driving the big surplus and sending to the landfill bottles that would otherwise be recycled.

“The bottle bill has become a de facto tax,” Sam Pearse, the lead campaigner for the Story of Stuff Project, told Sierra. “Consumers are frustrated and angry.”  

“This should be a wake-up call to legislators. This should be a wake-up call to the governor,” Mark Murray, executive director of Californians Against Waste, said of the project’s findings. “We are sitting on an obscene amount of surplus consumer recycling funds.… I think we are in a crisis situation.” 

Murray said current trends suggest that the surplus will continue to grow by $100 million a year without a system-wide fix. 

In response to the report, a spokesperson for CalRecycle, the agency that runs the bottle deposit program, said the system is facing many challenges outside of its control, including record-high sales of bottled beverages during the pandemic, which means record amounts of waste. Maria West, head of public affairs at the agency, said CalRecycle has deployed deposit drop-off pilot programs in underserved areas in an attempt to boost convenience and deposit redemptions.  

“We recycled more cans and beverage containers in 2021 than any time in history,” West said, though she acknowledged that this percentage includes curbside collections in which consumers sacrifice their deposits. 

A perfect storm of challenges has battered the 35-year-old bottle bill program during the past four years. First, there was the worldwide recycling crisis brought on when China put an end to importing epic amounts of our trash. China’s desperation for even our trashiest raw materials propped up the domestic recycling system for decades. But when China closed its doors to US recyclables, the bottom fell out of the recycling market and local recycling centers began closing. The 2,600 recycling drop-off centers that were thriving in California in 2013 declined to 1,210 by the start of the pandemic, leaving scant options for many consumers to get their deposit money back. Fifty-six centers have since reopened, but there are still far fewer than in the past.

Recycling centers have long been the mainstay of the bottle deposit program. Many of them were once located conveniently adjacent to supermarkets, relieving the retailers of having to accept empties themselves. Not all retailers have to participate. Some opt out by paying the state $100 a day per store. Others are exempted because there are convenient recycling centers nearby or because of recent legislation that gave small businesses a one-year pass.

Now, with so many of the recycling centers gone, the law required retailers—supermarkets, drugstores, liquor stores, and pretty much everyone else selling deposit containers—to pick up the slack. But the Story of Stuff Project found that has not been happening. 

The project sent out 221 volunteers to visit retailers listed on the CalRecycle website as accepting empty containers and redeeming deposits. Of those stores obligated to participate in the program—CalRecycle puts their current number at 2,357—only 48 percent of those surveyed were actually taking back containers and redeeming deposits.

The experience of Jeanne Serge of Paso Robles, a retired teacher and one of the project volunteer surveyors, was typical. Her local standalone recycling center had closed, and the nearest alternative was 10 miles away. “When I attempted to return my beverage containers to a retailer on the list of those supposedly accepting them, they had no idea what to do or how to do it,” Serge told Sierra.  

She says her favorite local market, Grocery Outlet, told her that they would not accept her containers nor refund her deposits. Her local branch of the drugstore chain CVS gave her a similar response. A checker at Food 4 Less told Serge she would have to call ahead for an appointment with a staffer named Allen, who was “somewhere in the back.” But Allen was nowhere to be found.

Serge said she was disheartened by the experience. “There are people who really need that money back, and they have no options,” she said. “Of the four places I tried, only Smart and Final would take my bottles, but they only do it in the morning and only if they’re not busy.” 

Other volunteers had similar issues. Mervis Reissig in Redondo Beach said she visited four retailers listed by CalRecycle as redeeming deposits in her city, but only one, RiteAid Drugs, would actually do it. And Angelie Ryah, a San Diego biomedical engineer turned urban farmer, said she struck out at four out of four retailers in her city. “It was so frustrating,” she said.

Murray said this is a common experience, as many retailers either hide the fact that they take deposit containers or make the experience so unpleasant that people just don’t bother. Other retailers refuse outright.

West said CalRecycle has a robust enforcement program charged with cracking down on retailers who shirk their responsibilities and that the agency conducts about 1,000 inspections a year. Just last week the agency announced it had won a $1 million settlement from CVS for dodging its bottle bill responsibilities, she said. Now, CVS must install 20 reverse vending machines in stores in underserved areas so consumers can redeem their empty bottles and containers.

Even so, the Story of Stuff Project and the Culver City–based Container Recycling Institute point to data on recycling options that shows that many areas lack convenient deposit redemption choices and that this impacts low-income residents most drastically. The report blamed insufficient enforcement and too many exemptions for retailers. 

Potential solutions cited in the new report include eliminating the $100-a-day opt-out and forcing more retailers to redeem containers; stepping up enforcement; and using some of the surplus deposits to fund more recycling centers and reverse vending machines statewide. 

Murray advocates raising the minimum deposit to a dime a container. When Oregon did that recently, it caused recycling rates to skyrocket there. The nickel deposit dates back to programs in the 1960s, when a nickel could actually buy something. Now, it’s just not a sufficient incentive, Murray said.

CalRecycle can’t take such steps on its own. Recycling advocates say new legislation is required to modernize the system. Several reform bills are pending in the California legislature, but others have been proposed in the past without success. 

“California’s bottle recycling program is broken, and consumers are the ones paying the price,” said state senator Bob Wieckowski, sponsor of one of two competing reform bills. “It is time to remove this unfair financial burden and transition to a circular economy that increases recycled content and puts consumers first.” 

Susan Collins, director of the Container Recycling Institute, says California’s fumbling of its deposit program is a long-drawn-out missed opportunity. “I call deposits the rock stars of recycling,” she told Sierra. “You can flip the switch, pass the legislation, and know that in two years you’re going to have an 80 percent redemption rate. And it’s a principle that could be applied to so many other things. The economic incentive … changes behavior very quickly.”