Polytag urges UK government to embrace digital innovation in packaging DRS

Polytag is calling for businesses and industry leaders to support a modern, flexible approach to the UK’s deposit return scheme (DRS). More than 50 signatories have added their voices to an open letter urging the UK government to integrate digital innovation to future-proof the country’s packaging recycling sector. 

The current DRS proposals, which favor a fully “return-to-retail” model, require consumers to store containers at home and then collect their deposits via reverse vending machines (RVMs) at retail locations. 

William Addy, chief commercial operator at Polytag, tells Packaging Insights: “Digital innovation will enable households to reclaim their deposit through a simple QR code scan and the use of existing recycling collections. Pilots of DRS schemes, such as the one we ran with Ocado Retail in 2023, have already clearly shown that consumers prefer to use this more convenient method of return.”

Last week, Polytag expanded its partnership with the British online grocery giant, rolling out its Digital Link QR codes more widely to give customers easy access to detailed product information and sustainability insights.

“We firmly believe that by complementing a ‘return to retail’ model with modern technology, there will be less impact on retailers of all shapes and sizes, while also ensuring the overall objective of increasing recycling rates is achieved,” says Addy.

Challenges for retailers

The letter recognizes that retailers, particularly small stores, may face hurdles under the current DRS framework.

“Convenience stores and other smaller retailers are faced with two challenges. If they opt for the manual process, they need to find a suitable area to store potentially hundreds of bottles. Whereas the RVM route will mean they need to dedicate a space in their stores for the equipment,” says Addy.

“These stores are already under immense pressure and need to utilize their entire store footprint to try and sell products. A ‘return to retail’ model not only adds complexity, but it renders an area unavailable for stocking or selling products, potentially impacting overall store layout and product availability.”

When the recycling and collection system is coupled with the growth of app and device usage, the potential for a DRS is huge. Furthermore, according to the letter, beyond the initial expense, RVMs represent depreciating assets with potential long-term financial implications. There are also concerns that these units could become “stranded assets,” leading to losses for retailers already grappling with post-COVID economic shifts.

Easing pressure via digital options 

The letter emphasizes the potential benefits of including a digital option alongside the conventional return-to-retail approach. Allowing consumers to continue using kerbside recycling methods and claiming deposits electronically from home could relieve pressure on retailers and ensure smaller convenience stores do not lose revenue by not installing a large RVM. 

“As one of the largest economies in the world, with a government that is keen to drive tech growth, there is a strong case for a digital option to now be included in the UK’s DRS legislation,” Addy remarks.

“We have already run several pilots of our technology to prove its capability and demonstrate consumer demand for a digital option that is more convenient than traditional RVM-based ‘return to retail’ models.”

In 2023, consumers claimed over 20,000 cash rewards as part of the first nationwide digital DRS, which Polytag ran with the recycling tech app Bower and Ocado Retail. The trial took place across England and Wales and allowed people to earn money or donate to charity through the Bower app. 

“Our GS1-certified QR codes were integrated onto Ocado’s milk bottles’ labeling and were scanned by consumers via the app. Once the bottle was disposed of in their registered at-home recycling bin, the reward could be withdrawn into their bank account. Up to £4,000 (US$5,049) worth of rewards were obtained during the nine week long trial,” Addy explains.

“Customer surveys released at the end of the trial revealed 93% of the pilot users felt ‘positively’ toward the idea of a DDRS in the UK and 71% of Ocado Retail’s customers said they would be happy to use a QR code to claim a deposit back, while only 58% of respondents showed interest in using a RVM.”

“This all goes to show that a DRS that offers rewards for recycling, that includes a convenient, digital option, will see greater engagement and has the potential to address stagnating recycling rates, he concludes.”