Case Study: Incentive Based Recycling

<p><strong>Three problems, one solution: <br /> </strong><br /> <strong>1.&nbsp;</strong>&nbsp;&nbsp; Like many others, I know recyclables have value, but I don&rsquo;t care to spend my time sorting through trash to sell the materials at a <a href="">measly price</a>, especially when even mixed scrap glass goes for only <a href="">$2.25/ton</a> with under 40k tons to sell.&nbsp; <br /> <br /> <strong>2.</strong>&nbsp;&nbsp;&nbsp; Dumping trash into the landfill costs money, especially given the way we&rsquo;ve gone filling them up combined with restrictions on new landfill construction.&nbsp; However, many of us don&rsquo;t feel that cost in our pocketbooks because we don&rsquo;t pay for waste removal ourselves and/or the amount we pay doesn&rsquo;t vary with how much we throw out. <br /> <br /> <strong>3.</strong>&nbsp;&nbsp;&nbsp; We know we should recycle whenever possible, but sometimes it&rsquo;s not as convenient as discarding objects into the ubiquitous trash bin.&nbsp; We can be lazy. <br /> <br /> These three problems weigh heavily upon our communities in the form of exorbitant disposal fees.&nbsp; Municipal solutions have usually consisted of equipping householders with blue bins with a tinge of education where possible.&nbsp; Except for a few overachieving jurisdictions who&rsquo;ve pushed hard for high recycling rates, like <a href="">San Francisco, which diverts 70% of waste from its landfills</a>, current recycling efforts have been less successful than one would hope.&nbsp; Sadly, with the US average of <a href="">32.5% diversion</a> (2006), we continue to toss astonishing amounts of recyclable materials into the landfill, losing out twice, once on the value of the materials and the second time on the cost of dumping them there.&nbsp; The solution has to involve consumer action.<br /> <br /> Enter Ron Gonen and <a href="">RecycleBank</a>.&nbsp; During business school, Ron developed a plan that would solve all three problems at once: reward people for recycling with hundreds of dollars in reward value annually, using pounds of recyclables recycled per week as the key motivating metric. <br /> <br /> <strong>How it works: recycle, record, reward</strong><br /> Starting in Philly in 2004, RecycleBank supplies residents with large wheeled carts armed with RFID tags, and retrofits the city&rsquo;s garbage trucks with scanners and scales enabling waste collectors to weigh and scan each cart.&nbsp; The RFID tag on a cart marries it to the household&rsquo;s address.&nbsp; The weight of the recyclables gets converted into RecycleBank Points which are wirelessly transmitted and uploaded to the home&rsquo;s online RecycleBank account, where the family can track progress.&nbsp; For each pound of recyclables, residents get 2.5 RecycleBank points (10 points is equivalent to $1 in reward value).&nbsp; RecycleBank families recycle on average 80 lbs per month, yielding 200 points, or $20 in reward value per month.&nbsp; Not too bad for doing something we all should be doing anyways.&nbsp; And RecycleBank rewards are good at 450+ physical and online retailers both local and national (including Kraft, CVS, Bed Bath and Beyond, Stonyfield Farms, Rite Aid, Coca-Cola, and many local mom and pop shops).&nbsp; RecycleBank quantifies a household&rsquo;s recycling in terms of trees and gallons of oil (from plastics) saved, which is an additional motivator and a great learning tool for children.<br /> <br /> RecycleBank is a for-profit and makes money in one of three ways:<br /> 1) Splitting the savings from reduced landfill fees. For example, Wilmington, Delaware was paying $3M annually for disposal, which was reduced to $1.5M with RecycleBank&rsquo;s help, and they split the difference.&nbsp; 2) The waste hauler pays RecycleBank per household.&nbsp; <br /> 3) Leveraging website traffic for marketing opportunities.&nbsp; Each community is different and RecycleBank develops a tailored partnership with each, based on needs, regulatory environments, and pre-existing trash hauling arrangements. <br /> <br /> When I inquired about people putting heavy trash in their carts to win more points, I learned this has surprisingly not been a problem.&nbsp; If a cart is contaminated, trash collectors hit the &ldquo;bowling ball&rdquo; (imagine someone trying to pass a bowling ball as a recyclable) red button to report a problem.&nbsp; The household is warned and three strikes - they&rsquo;re out of the program.&nbsp; Four years in, not a single person has been asked to leave the program.&nbsp;&nbsp;&nbsp; <br /> <br /> <strong>Results: 0 to 60</strong><br /> RecycleBank has had phenomenal success so far.&nbsp;&nbsp; Growing from start up in 2004 to 133,000 households in 2008 with 1.5 million in the pipeline, RecycleBank is backed by solid venture capital funding for growth and expansion.&nbsp; <br /> <br /> RecycleBank typically causes recycling rates to double.&nbsp; For example, in Cherry Hill, NJ, where recycling rates were already laudably high, residents in a pilot program raised recycling levels on average from 11 pounds per week per household to 26.&nbsp; Lisa Pomerantz, Director of CSR/Marketing and Communication at RecycleBank relayed one user&rsquo;s remark: &ldquo;We found the missing link of what&rsquo;s going to keep people recycling.&rdquo; <br /> <br /> <strong>Good business sense</strong><br /> RecycleBank&rsquo;s program makes good business sense, so their success is not surprising. Recyclebank:<br /> 1)&nbsp;&nbsp;&nbsp; Creates a win-win situation where residents, cities, local businesses, RecycleBank and the planet benefit from the business&rsquo; success (how&rsquo;s that for triple bottom line for you!)<br /> 2)&nbsp;&nbsp;&nbsp; Uses the carrot, not the stick, to incentivize positive behavioral change, as Pomerantz pointed out<br /> 3)&nbsp;&nbsp;&nbsp; Tailors programs to communities, rather than using a one-size-fits-all approach<br /> 4)&nbsp;&nbsp;&nbsp; Often bases earnings on a city&rsquo;s savings, resulting in a risk free program for municipalities<br /> 5)&nbsp;&nbsp;&nbsp; Proves you can do well by doing good in the business world<br /> Future of the Bank: &ldquo;Leave no home behind&rdquo;<br /> <br /> The future of RecycleBank is exciting. While concentrated in the North East, they have launched in the Mid-West and plan to expand across the country and the world.&nbsp; Pomerantz emphasized that they are &ldquo;being really strategic about the roll out.&rdquo;&nbsp;&nbsp; In addition to service area expansion, they are in discussion with some communities about starting to collect compost. They already have a cell phone collection and they hope to expand further into e-waste.&nbsp; Lastly, RecycleBank is building partnerships to include waste haulers, such as Allied Waste and material recovery facilities (MRFs) where recycling takes place.&nbsp; Growth in both services and service area is in the works. <br /> Look out for an RFID chip coming soon to a cart near you!<br /> <br /> <em>Amie Vaccaro is interested in innovative companies and entrepreneurs reducing waste through green product design. You can read her blog, <a href=" ">ecofrenzy</a>, which is focused on sustainability and San Francisco.<br /> </em></p>