A new effort in Michigan is aimed at cracking down on out-of-state cans, cans taken across state lines to take advantage of Michigan's generous 10 cent a can recycling refund, the highest of any state.
Republican Representative Ken Kurtz of Coldwater introduced legislation that would punish people attempting to return out of state or unmarked cans by up to 93 days in jail and a $1,000 fine. It's a move championed by store managers, but some can collectors don't think it's fair.
"If you are intending to defraud ... then you should be held accountable for it," said Kurtz.
"Seinfeld" characters Kramer and Newman failed miserably in their comedic attempt to cash in on the refund, when they loaded a mail truck full of cans and bottles in New York and attempted to drive them to Michigan. But lawmakers say it's a serious problem, especially in border counties, and they want to toughen penalties on people who try to return unmarked, out-of-state cans and bottles for refunds.
On any given day, you can find Scott King and his girlfriend walking their dog on a trail in Buchanan.
"It's nature's serenity," said King. And it's a chance to pick up litter. "We find pop bottles and beer cans all the time."
When King finds a Michigan can, he takes it to the store for a ten cent refund.
"Somebody has bought that can and already put that dime, the retailer is not putting that 10 cent up it's the consumer," he said.
Michigan offers the highest refund in the country and some take advantage of it. A report from the Michigan Beer and Wine Wholesalers Association shows the state loses $10-13 million a year in fraudulent refunds.
Right now, people are only punished after a fraudulent return is made. Newly proposed legislation would crackdown on anyone who even attempts it. Its legislation Save-A-Lot Store Manager Stevie Eagle agrees with. In fact, her store recognized the problem a long time ago and put a $15 limit on recycling returns to try and limit fraud. "Because if we're giving away more money than what we sold for, we're gonna end up with nothing," Eagle said.
Save-A-Lot gives away about $70 a week in can refunds. "We look at all the cans before we throw them in," she said. King, on the other hand, is against the proposed legislation."As we pick up cans on the trail we don't know where that can came from. When you have confusion I don't think it's right to be able to punish people for that confusion," he said.
Obviously, this issue is of biggest concern in Michigan's border counties like those on the Indiana stateline.
Michigan's 10 cent-per-container refund — the highest in the country — was enacted more than 30 years ago to encourage recycling. Many say it's worked. The state's recycling rate for cans and bottles was nearly 96 percent in 2011. By contrast, New York, one of nine states with nickel deposits on most containers, saw only a 66.8 percent redemption rate in 2007, the most recent figure available.
Despite measures Michigan lawmakers have taken over the years, including tougher penalties for bottle scammers and new machines that kick out fraudulent cans, store owners and distributors along the border say illegal returns persist.
Mike Hautala owns Hautala Distributing, which services Gogebic and Ontonagon counties in the western part of the Upper Peninsula near the Wisconsin border. He said for every case of beer his distributorship delivers to a store along the border, it picks up about seven more cases of empty cans.
The state loses $10 million to $13 million a year to fraudulent redemptions, according to most recent 2007 estimates from the Michigan Beer and Wine Wholesalers Association. Angela Madden, the association's director of governmental affairs, said that number has likely gone down slightly because of changes implemented since, but not by much.
Bill Nichols, store director at Harding's Friendly Market in Niles about three miles from the Indiana border, said the store takes in about $6,000 worth of cans a week. He said every week he kicks out people for trying to return large garbage bags full of cans from Indiana, a state that offers no refund.
"You can go into the parking lot and look at the license plates and see that it says Indiana," he said.
Distributors pick up the containers people drop off at stores and pay the store a dime for every container. If the distributor picks up more bottles and cans than it left — the likely result of fraudulent redemption — the distributor is left in the hole, Madden said. If the distributor picks up fewer cans than it dropped off, the money that does not go back to the store is sent to the state. Twenty five percent of that money is sent back to retailers and 75 percent is put in a fund that pays for things like environmental cleanup, she said.
Hautala said he lost about $25,000 last year picking up more returned containers than he delivered. He said his company will recover some of that money from distributors who sell more containers than they pick up.