There are four key financial elements to the deposit return scheme. The 20p deposit itself, the producer fee, the return handling fee and the sale of collected materials.
The 20p deposit remains in circulation throughout the sales cycle.
Step 1: Producers and importers pay a 20p deposit for every drink container they put into the Scottish market. This deposit is paid to the scheme administrator, Circularity Scotland, and informs how many containers are sold so that producer fees can be allocated accordingly.
Step 2: If the drink container passes through a wholesaler, the wholesaler pays the producer or importer a 20p deposit which will be returned once when sell on to the next business in the supply chain.
Step 3: Retailers pay their supplier a 20p deposit per drink container, which will be returned to the retailer by the consumer at the point of purchase.
Step 4: At the point of purchase, the consumer pays the price of the drink container plus 20p. The consumer is then reimbursed this 20p when they return the empty drink container to a return point operator.
Step 5: Circularity Scotland refunds the return point operator that 20p from the deposit received from the producer or importer in Step 1.
If you are a closed loop hospitality provider, you won’t charge your customers for the deposit. Instead, Circularity Scotland will refund you once our logistics partner has collected your empty drink containers.
Return point operators will be reimbursed the 20p deposit for each valid scheme article collected from consumers. This will be made using direct credit electronic transfer, with invoices automatically generated by Circularity Scotland based on information provided by the counting centre or reverse vending machine.
Return point operators will also receive a return handling fee for every scheme article collected, dependent on the type of return point they operate.
- Manual return point operators will be paid weekly based on counted volumes in a given week, on the Friday of the following week.
- Automatic return point operators will be paid monthly based on reverse vending machine data on collection volumes in a given month.
- Closed loop hospitality providers collecting PET, Metal and non-bulk glass containers will be paid weekly based on counted volumes in a given week, on Friday the following week.
- Closed loop hospitality providers collecting bulk glass will be paid weekly, based on the amount stated to Circularity Scotland as amended for weights collection and verification, on the second subsequent Friday.
- Takeback payments will be determined once a detailed operational model is available for retailers affected by this.
Return point operators will receive a handling fee payment designed to address the costs of the time, equipment and additional storage space required to operate as a return point. This includes, but is not limited to:
- The purchase, lease, maintenance and upkeep of any reverse vending machine associated with the collection and storage of scheme containers.
- Materials used for the collection and storage of scheme containers.
- The rental value of floor space used solely for collection and storage relating to Scotland’s deposit return scheme.
- Staff time dedicated solely to the collection and storage of scheme packaging.
The level of the return handling fee will vary depending on which type of return point is operated and will be determined annually by Circularity Scotland, based on data and analysis provided by independent consultants to ensure it remains reasonable and current.
Return Handling Fee Calculation
A detailed cost model aligned to the requirements of the deposit scheme regulations was developed using data from the broad range of Scotland’s return point operators and validated by input from other operating schemes around the world. The model is designed to reflect the variation in costs across the different types and sizes of return points.
Values are fixed for each type of return point and will be paid out based on the number of scheme articles returned, not on actual costs incurred by retailers
- Manual return point handling fee: 2.69p per scheme article collected
- Reverse vending machine handling fee: 3.7p per scheme article up to 8,000 per week, 1.6p thereafter
- Closed loop hospitality handling fee: 0.13p per scheme article collected
Handling fees are subsidised by the producer fee and distributed by Circularity Scotland as the scheme administrator.
A return point operator takes all items back manually and returns 100 containers. If all 100 are eligible scheme containers, the operator would receive £23.23.
|100 x 20p deposit
|100 x (2.69p handling fee + 0.538p VAT)