• Michiganders redeemed 70.4% of their 10-cent deposits on beer and pop in 2024, the lowest redemption rate in more than 30 years
• Meanwhile the state made $87.5 million from the uncollected deposits
• Beverage makers, retailers and environmentalists agree that the system needs change, but are butting heads on how to do so

Michigan beer and pop buyers increasingly aren’t bothering to return their bottles and cans to get their deposit back, and in the process left more than $116 million dollars on the table last year.

Records released this month indicate that 70.4% of 10-cent deposits put down at grocery store checkout lines were refunded in 2024. That’s the lowest percentage since the Department of Treasury started tracking deposits in 1990.

Michigan used to see more than 90% of deposits returned to consumers, in part thanks to the relatively high 10-cent deposit the state requires people to pay. That redemption rate began to slip during the 2010s but took a nosedive during the pandemic, falling to 73% in 2020 amid a temporary shutdown of all bottle return sites.

Although consumers redeemed their deposits in slightly higher numbers over the next few years, they’ve now sunk to an all-time low. 

Michigan still has one of the better-performing deposit systems among the 10 states with bottle return programs, but has fallen from first before the pandemic to third in 2023, according to the Container Recycling Institute. 

Some beverage industry representatives are pointing to the decrease as a sign that the bottle law has become irrelevant. Meanwhile, retailers and environmentalists alike are looking at what could be done to make returning empties more convenient — although they butt heads on how exactly to do so.

Actors on either side of the bottle bill debate also want to reshape how the Treasury distributes the money left on the table each year. Under the current system, the state is rewarded with three-quarters of all unclaimed deposits. That means the state has seen increasing revenue in recent years from consumers choosing to not return their containers.

The system has created “a perverse incentive whereby people benefit from the poor performance of the bottle bill,” said Conan Smith, the president and CEO of the Michigan Environmental Council.

But what’s behind this poor performance in the first place?

Other options

One theory is that the pandemic simply changed the way people dispose of their empty containers. With returns being suspended for months in 2020, people may have gotten used to not returning their cans, said Matt Flechter, the recycling market development specialist for the state Department of Environment, Great Lakes and Energy.

Although curbside recycling is far from universal in Michigan, people could be just choosing the more convenient option, he said.

And as returns reopened, consumers might have realized that they didn’t want to go back to waiting in long lines to feed their cans one-by-one into machines prone to rejecting their empties, said Derek Bajema, the president and CEO of the Michigan Beverage Association.

Sparing a dime 

The diminishing value of the dime has also given people little reason to bother returning their bottles and cans, Flechter said. When the bottle law was approved by voters in 1976, those 10 cents were worth more than 50 cents today — people simply stood to lose more if they didn’t return a beverage container. Now, it’s easier for some to just treat the deposit as a tax and move on.

Given the decline, “everybody’s doing work to figure out why this is happening and what we can do to change that as a state,” Flechter said.

Implementing any kind of change to the deposit law is difficult, however. Because the law was approved by voters through a referendum in 1976, any amendment would need to be similarly approved by voters or gain support from three-quarters of the Legislature.

And while some reforms have been successful, such as an amendment in the late ‘80s to allow wine cooler and canned cocktail containers to be returned or the addition of kombucha containers in 2019, more recent efforts have stalled in the Legislature.

Related:

• Michigan bottle returns fall after COVID, prompting get-tough push on grocers 
• Michigan bottle return rate fell after pandemic ban. Would price hike help?
• Michiganders passed up $108 million in bottle deposits amid COVID closures

Sen. Sean McCann, D-Kalamazoo, said that expanding the deposit law to at least include plastic water bottles, whose modern iteration had only been patented three years before 1976, would be a good place to start. He introduced a bill last session that would have put that idea on the ballot but it died after leaving committee.

In 2009, Connecticut expanded its bottle deposit law to include plastic water bottles. Nevertheless, the state’s redemption rate declined over the next decade, only bouncing back to 2009 levels after the state increased the deposit from 5 to 10 cents.

McCann told Bridge he was “taking a look” at whether he’d introduce another bill to expand the law during this session, adding that he’d applaud other efforts to change the system including gathering signatures to put it up on the ballot.

Add water, juice?

Environmental groups like the Michigan Environmental Council have a similar vision for an updated bottle deposit system. The council’s “Better Bottle Bill” proposal calls for more beverage containers like water, juice and sports drinks to be returnable and for shoppers to be able to return their beverages at any store, even if they’re not sold at that location.

Retailers, however, argue that expanding the number of returnable bottles will overload the system, driving up costs for retailers while inadvertently making the process of returning bottles more inconvenient. 

“You’re gonna have machines breaking down more often. You’re gonna have bins being full,” said Drew Beardslee, the vice president of government affairs for the Michigan Retailers Association. “You’re gonna have retailers at capacity waiting on pickups from distributors before they can accept more containers.”

Rather than forcing retailers to accept people’s used bottles, Beardslee said, the state could construct regional redemption centers to help take the load off retailers. In Michigan, most people return their empties at supermarkets, and the state has no state-run redemption center.

Smith of the Environmental Council pushed back on the idea that retailers wouldn’t be able to handle more containers in the system. It’s natural that retailers want to avoid taking on additional costs, but that “should not be a barrier to doing the right thing for the people, the planet and in our economy,” Smith wrote in a text message to Bridge. 

If Smith had it his way, the Legislature would approve a measure to put expanding the bottle bill on the ballot.

If that option proves infeasible, however, Smith said the Environmental Council would consider collecting signatures to get a barebones proposal that “gives the citizens the things they want” on the ballot but forgoes other changes the group wants. To do so in 2026 they’d need to collect over 350,000 signatures.

“It’s a big lift and we’ve got to raise a lot of money to do it,” Smith said. “But our polling shows the citizens are very excited about this stuff.”

One aspect of the bottle law facing scrutiny from all sides is the manner in which the uncollected deposits, called escheat, are distributed. 

After the first $1 million is given to Michigan State Police to enforce the bottle law, 75% then goes to the state’s Cleanup and Redevelopment Trust Fund which supports EGLE’s efforts to clean up and redevelop contaminated sites. The other 25% goes to retailers who sell bottled drinks to offset their cost of collecting returns.

The state’s cut this year is $87.5 million, the largest on record.

An EGLE spokesperson did not respond to questions about how much of the trust fund money comes from the leftover deposits. However, a department official told Bridge in 2021 that money from the bottle bill makes up about a third of the department’s cleanup budget.

Representatives from all sides of the bottle deposit debate said they dislike that the state stands to make more money in years when it does a poor job getting people to return their bottles. 

“When you create automatic entitlements on that money that are unrelated to the performance of the bottle bill, that’s a problem,” Smith said. 

Rather than funding projects unrelated to the bottle bill, he said, more of that leftover money ought to go to making the deposit system more efficient and convenient.

However, slicing up the pie in a way that adequately invests in improving the efficacy of the deposit system, compensates retailers for collecting people’s empties and doesn’t leave the contaminated site cleanup programs underfunded has proven difficult.

McCann would know. He’s tried.

“It’s really hard to find something that makes everybody happy,” the senator said.