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August 2007

RecycleBank helps municipalities increase recycling

Ron Gonen and Patrick FitzGerald founded RecycleBank about three years ago when they were “looking for the right project,” according to Gonen. Three years later, RecycleBank is a growing enterprise that seems to be a win-win for everyone involved.

The concept is simple: consumers get something back when they recycle. This increases the amount of material recycled, reduces landfilling and its associated costs, and sends consumers to partner companies to spend or donate the accumulated RecycleBank dollars.

Partner companies provide incentives at no cost, and in return get increased brand awareness, goodwill, and increased traffic to their locations or increased purchases of their products. Gonen estimated that about 20 percent of the partners are national companies, 30 percent are regional, and 50 percent are local.

For recyclers, there’s no change; there’s no requirement that the material goes to specific companies. No one loses current business, they just see an increase in volume as consumers increase their recycling to take advantage of the “free” money. In areas where RecycleBank is currently operating, “we’ve dramatically increased their volume,” Gonen said.

Municipalities do have some up-front costs, but Gonen said that the shift from landfilling to recycling should make up for the initial outlay. After RecycleBank sets up a contract with the municipalities, recycling bins need to be fitted with a computer chip while the trucks need to have a chip reader and an onboard scale to weigh the material and attribute it to the correct household. For municipalities that need help with the technology, Gonen said, “We can retrofit their trucks, but the expense is theirs.”

Consumers earn credit based on the weight of the recycled materials. RecycleBank encourages single-stream recycling to make it easier, but Gonen said they can work with existing systems. Consumers earn up to a maximum of $400 RecycleBank dollars per year and Gonen said that it’s not difficult, “you just need to fill up the container every week.”

RecycleBank can also set up programs for schools and other organizations in the areas it serves. “We’re trying to provide a wholistic solution,” Gonen said. Besides increasing recycling, Gonen said that the program provides “a social benefit” for the community.

Consumers can also donate the earnings to charities. Recently, the Coca-Cola Company started a program which offers matching donations for RecycleBank dollars that consumers donate.

One of the programs is the Green Schools Program, which gives grants to fund environmental programs in local schools. Grants range from $500 to $10,000. The program’s goal is to find creative, long-term solutions for environmental challenges.

Scott Vitters, director of sustainable packaging for Coca-Cola, said that Coca-Cola was the first of RecycleBank’s corporate sponsors because they believed in “the vision these guys had” and that Coca-Cola was hoping to “reinvigorate recycling within the United States market.”

Vitters said. “We spend millions of dollars to design packaging that’s recyclable,” including things like labels, glue and caps, “and when it goes to the dump, those dollars are wasted.”

By starting the donation programs, Coca-Cola wanted to give consumers “who didn’t need an incentive [to recycle] an opportunity for that consumer to give back to the community.” When the program started, no one knew how many donations would come in. Vitters said, “We were pleasantly surprised.”

Vitters said RecycleBank probably wouldn’t change the habits of people who are already recycling a lot, nor would it change those who refuse to recycle, but the majority of people “in the middle” become more motivated “with just a little nudge” because of the incentives.

We’ve just begun to realize the potential,” Vitters said. “It’s a business model where everybody wins.” Consumers and businesses benefit, “but at the end of the day, it benefits the environment.”

So far, RecycleBank is operating in Delaware, Pennsylvania, and New Jersey. “We’re starting to expand our service,” Gonen said. RecycleBank will start operations in New York, Massachusetts and Vermont in September.