The Great California Recycling Fraud Crisis

Samuel Reason - December 5th, 2019

You would think that any state or country with an effective recycling program would have it set up to ensure it could be self-sustainable, however, in California, there is an extremely high rate of recycling fraud which is draining the state’s cash. Over 8.5 billion recyclable cans were sold in California during the last few years, yet their laws state that only 8.3 billion cans can be redeemed for a nickel each year.

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So that means California has a return rate of over 100% when it comes to recycling, which surely cannot be right. It is the type of success that is not just impressive, or miraculous, it is just unbelievable. And then you start to look at the recycling rate for certain plastic containers, which is even higher at over 104% and you start to realize there is something fishy going on.

And this is where you would be correct. You see California’s generous recycling redemption program has led to all sorts of rampant fraud. We are seeing crafty entrepreneurs from Nevada or Arizona, driving over to California with semi-trailers full of cans. As the neighboring states do not have any deposit schemes for redeeming cans. Once they are across the border, they can proceed to transform their cargo into hundreds of nickels.

The fraud is even worse at the recyclers inside the state, where research has shown several are claiming payments and redemptions for recycling the same plastic containers over and over again. Or in certain fraudulent cases, the containers never even existed.

This highly illicit scheming is slowly but surely draining the state’s $1.1 billion recycling fund. Some Government officials believe the fraud is now reaching an estimated $40 million a year, and experts are claiming it will reach $200 million a year if they continue. The problem is that apart from Oregon, only California is the state in the region with recycling laws. And the laws are so old they are easily frauded.

Essentially the state has a tax on everyone can or bottle sold in California if the can or bottle is returned via one of the privately ran recycling centers then you can get 5 to 10 cents back. However, these centers generally do not care where the can or bottle is coming from so many people drive in California with thousands of cans from different states.

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