The Seinfeld Can Scheme - Surprisingly Illegal
NEWMAN: (peering at bottle label) What is this ‘MI, ten cents’?
KRAMER: That’s Michigan. In Michigan you get ten cents.
NEWMAN: Ten cents!?
KRAMER: Yeah.
NEWMAN: Wait a minute. You mean you get five cents here, and ten cents there. You could round up bottles here and run ‘em out to Michigan for the difference.
KRAMER: No, it doesn’t work.
That would be correct, it doesn’t work. Not because it’s not economically feasible, but because you’ll go to prison. In fact, 13 people have recently been arrested for doing this very thing - they made over $500,000 in the process.
Let’s get this straight: Michigan subsidizes recycling in-state and arrests out-of-state recyclers? We’re going to have to back up to get our minds around this one.
The way that Michigan honors this $0.10 premium is by placing a tax on the sale of bottles and charging consumers a dime deposit at the point of sale.
To see the impact of the bottle bill, one need only shop at similar stores on each side of the Ohio-Michigan line. The regular price of a 12-pack of Coca-Cola at the Farmer Jack Supermarket on Laskey Road in Toledo is $3.59. The same 12-pack at the Farmer Jack Supermarket in Monroe is $3.99, plus $1.20 bottle law deposit. Similarly, a 24-pack of Budweiser cans at the Toledo store costs $16.49, but sells for $17.49 at the Monroe store plus $2.40 deposit.
The association estimates that Michigan’s bottle law adds at least 4.4 cents to the cost of every can of pop and every bottle of beer that is sold in Michigan in addition to the dime deposit.
Despite the fraudulent returns, Michigan’s bottle deposit fund has never paid out more than it’s taken in. The difference in the two amounts - referred to by the state as the escheat - is divided up each year, with 75 percent of the remaining funds used by the state to pay for environmental clean-ups and the other 25 percent returned to retailers for their time and trouble.
As an aside, the word ‘escheat’ originates in law school estates class to describe what happens when the State gets your stuff when there’s no proper heir - and it’s a lame way to Nerf the hard reality that they’re taxing grocers, provisionally fining shoppers, and keeping some of it. If you buy a Coke, you’re going to HAVE to recycle the bottle just to get back your ‘deposit’ - as if it were the state of Michigan’s bottle that they leased to you temporarily.
The program isn’t even successful at promoting recycling, as the state’s recycling rate lags behind other states in the region. The bottle return law even places our food supply at risk for a bioterrorist attack, if the Michigan Grocers Association is to be believed.
Who is benefiting from this? Certainly the State and perhaps raw materials producers who receive subsidized recycled materials instead of having to harvest it from the earth. They’ll still mine just as much as ever (mining is still vastly cheaper than recycling, and besides, the government doesn’t have an infinite supply of cans filled with tobacco spit).
Both Seinfeld and the 13 arrested in the recent scheme should be heralded for bringing this farce of a recycling program to national attention once again.
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