One method of providing an incentive to increase recycling and decrease waste is the deposit-refund system. In this system, people who return certain recyclable items are given a certain amount of money in exchange.

What really happens is that when purchasing a product the consumer pays an extra amount, the deposit. The deposit usually pays for something that will not be consumed, but is necessary for selling the product.  For example, a can is required to hold a liquid drink.

After using the product (for example, drinking a bottle of juice), the consumer can return the bottle to the retailer, or to the recycling authorities.  These people will pay the consumer a certain amount of money, the deposit they originally paid.

In the end, the deposit system does not affect the consumer economically if they return the bottle.  What it does do is encourage them to return the bottle for recycling, so that it can be reused and not simply thrown into a landfill.

The biggest problem with the deposit-refund system is that the deposit is often far too small for most people to want to take the trouble of returning the bottle or other product.  If the consumer receives US $.05 for the bottle (a common amount in the United States), it will not be worth the time (or gas usage to drive to the recycling center) to return it.

This problem is partially overcome by people who do need the money.  For example, very poor people – and sometimes children – often collect and redeem the items for which there is a deposit.

An alternative to this would be a system similar to the one used by milk deliverers: each week, a milk delivery person drops off the milk, then returns the next week and collects the bottles.