Consumers are getting the shaft through California's container deposit program that fails to return hundreds of millions of dollars to their pockets each year, one advocacy group claims.
Consumer Watchdog believes $308 million is lost by California residents due to deposits they pay but do not redeem each year.
The deposit program also is leaking money that ultimately should be in consumer hands due to fraud as well as circumstances that dissuade people from claiming their money, the group believes.
Central to the problem, said Jamie Court, president of Consumer Watchdog, is an inadequate public redemption center system that has seen significant cuts in locations in recent years as operators said they were not profitable. But that's not the only factor.
Typical plastic, metal and glass containers all are subject to California's 5-cent deposit law. Residents only receive about 2.65 cents of that money back on average, according to the report.
And for a group that calls itself Consumer Watchdog, that's untenable.
Consumer Watchdog based its research in large part on data from the Container Recycling Institute as well as CalRecycle, a state agency in charge of the program.
"Californians plunk down a nickel for their cans every time they buy them. … But increasingly, they are only getting half that nickel back on average," Court said.
"The reason is others are turning in those empties for them. They are forced to throw the empties in curbside recycling. The trash haulers are getting paid for the empties. The bulk collectors — they call them gleaners — get paid for the empties. And consumers are basically forfeiting their money," he said.
Consumer Watchdog is recommending an increase in container deposits to 10 cents to drive consumer behavior toward redemption. The group cited both Oregon and Michigan, each with 10-cent deposits, as having redemption rates exceeding 90 percent. California's recycling rate was 75 percent in 2017.
While consumers are forfeiting about half of their deposits, others are benefiting.
Waste and recycling haulers annually receive about $126 million in containers collected through curbside recycling programs rather than returned to recycling centers. And gleaners, called bulk collectors by Consumer Watchdog, earn another $92 million per year through containers they can find, the group said.
These gleaners can spend their days on the streets looking for empties, amassing them in large plastic bags that they then cash in at redemption centers. Containers for beverages consumed away from home and then discarded are a prime source for these gleaners.
But the consumer advocacy group would like to see more money come back to those who originally paid for the deposits.
"This report is an urgent cry for Gov. [Gavin] Newsom and the legislators to fix the recycling system in California. There are 10 states with bottle deposit laws, and California is a cellar dweller," he said.
Californians pay 5 cents on containers up to 24 ounces and 10 cents for 24 ounces and larger.
Beverage wholesalers and retailers also are skimming money off the program by underreporting the number of beverages they sell to consumers. This allows them to keep the deposit money for themselves, Court alleged. His group put that alleged fraud at $206 million annually.
Hundreds of redemption centers have closed in recent years, including more than 100 in Los Angeles County alone, said Liza Tucker, author of the report called "Half A Nickel: How Consumers Get Ripped Off On Every Bottle Deposit They Pay."
Along with many closures in densely populated areas, she said, less populated areas also have been impacted. This forces consumers to travel longer distances to get their deposit money back.
Tuolumne County, for example, had only one redemption center in 2017, down from three in 2012, for a population of about 55,000, the report indicates.
About 40 percent of the state's redemption centers have closed during the past five years because they are not receiving enough reimbursement from the state to operate profitably, Court said.