Deposit return scheme for Scotland: summary

How much the deposit should be? (Questions 25 and 26)

The level at which the deposit is set will be key to creating an effective deposit return scheme. The deposit that customers are required to pay for a drink is the incentive for them to return the container to the system. In other parts of Europe, the deposit ranges from EUR 0.10 to EUR 0.40 (between 8p and 35p).

The impact of the deposit level on the return rate cannot be directly modelled as there are a number of variables that affect return rate, including availability of return points and how clear and comprehensive the system is. It is, however, reasonable to assume that a higher deposit level will lead to an increased return rate.

As discussed in the section Fraud Prevention, the level of the deposit affects how attractive the system is to attempted fraud. The higher the deposit level, the more worthwhile attempts to defraud the system will appear.

The deposit level could also have an impact on those products sold in individual containers but as part of a multi-item package for instance, soft drinks cans packaged together. The deposit level needs to take into account the overall impact on the costs of such products.

The level of the deposit also has an important equalities impact. Ideally, nobody should lose money when they buy a container that carries a deposit, as they will have the deposit returned. However, even in the highest performing systems in the world the return rate is not 100%.

Furthermore, while the money paid as a deposit should be returned, we must keep in mind that for those living on low incomes, cash flow is a significant issue and having to pay the deposit up front, even if it is then returned at a later date, could create an additional burden. These impacts are considered fully through the accompanying interim Equalities Impact Assessment.

As well as the level of the deposit, we must also consider whether different container types should carry different levels of deposit. A 'flat rate' deposit, with every container having the same deposit, is the most straightforward approach to take for industry, retail and the customer. There are a number of potential issues that a variable deposit could lead to, including an implication of trying to influence consumer choice and leading customers to assume that items that have a lower deposit are worth less, leading them to be less likely to return them. System operators in other parts of Europe have indicated that a variable deposit causes more problems than it solves.

One solution is to have a common deposit level for all containers but to vary the producer responsibility fee to reflect the different level of value recovered from different types of containers.