Rewards for Recycling

I know your kind. You recycle. You care about the planet. You might even be a tree hugger. You don’t want to dump things in the landfill if there’s a way to extend their lives for another go. But not everyone can be bothered. If the environmental mess we’re in isn’t enough to motivate them, what will?

That’s one of the questions Ron Gonen had to figure out while developing the business model for his innovative, young company, RecycleBank.

We talked with Gonen by phone from his office in New York City.

Workers drop off a RecycleBank container. Photo: RecycleBank

BPGL: How does RecycleBank encourage people to recycle?

GONEN: We reward your home for the amount that you recycle. We sign a contract with your city and provide every home with a large, wheeled and lidded recycling cart. Embedded in each container is a radio frequency identification (RFID) chip. When the truck picks up your recycling, we read the chip, weigh the contents of the cart, and wirelessly credit your account with RecycleBank Points.

You keep those Points in your account until you’re ready to spend them on over 900 rewards. The Points, and the rewards they can buy, are the motivating factor that gets people to recycle as much of their household waste as possible.

BPGL: What types of items can a RecycleBank customer purchase with their Points?

GONEN: We have different offers for each location, depending on the currently participating local and national sponsors. At any given time, a customer has at least 100 ways to spend their Points. A couple of examples from our website are a free YoBaby Organic Yogurt for 50 RecycleBank points or $2 off a purchase of $5 or more from Kiss My Face products.

We also have an option for people to donate their Points to schools for projects dealing with the environment. The RecycleBank Green Schools program helps kids in RecycleBank-serviced areas to become the next environmental stewards of the planet.

BPGL: Many cities already have a recycling program. Why might they want to partner with you?

GONEN: Their goal is the same as ours: to keep all recyclable materials out of the landfill. We can help with that by motivating people to recycle as much as possible.

BPGL: Who pays for the containers?

Residents leave their containers for curbside pick up. Photo: RecycleBank

GONEN: Generally, the city will buy the containers or we retrofit existing containers with our scanable chip. We also retrofit the city recycling truck with a mechanical arm that picks up the container, reads the chip, and records how much each household has recycled.

BPGL: If there’s no cost to the customer, how does RecycleBank make money?

GONEN: For every ton we motivate people to divert from the landfill, we earn money. The city has a figure for how much tonnage they sent to the landfill in the previous year. We measure the amount of recyclables collected weekly or daily, and then we do a true-up at the end of the year.

Whatever tonnage we divert over and above the previous year represents a savings in landfill costs for the city. So, if a city recycled 1 million tons last year, and this year they are recycling 3 million tons, we split the difference between us. The city gets the benefit of saving landfill fees for the half of those extra 2 million tons. And they pay us their savings for the other half.

BPGL: Do people have to sort their recyclables before putting them in the cans?

GONEN: No. We pick up recyclables in a single stream — meaning that everything is commingled in a single can; there’s no separating needed. But we can do dual-stream [also called “multi-stream”] pickups if that’s what a city needs.

Or, if cities are interested in going to a single-stream process, we have a number of partners that we can work with to help them get there.

BPGL: How well is the program catching on?

GONEN: We’re in 15 states. The first country we’ll expand to is most likely to be the United Kingdom. That could happen in Q3 or Q4 of 2009.

RecycleBank containers are mechanically lifted and dumped. Photo: RecycleBank

BPGL: Is RecycleBank a nonprofit?

GONEN: No. We’re a for-profit business backed by venture capital. We’re showing people that you can be green and successful.

BPGL: What can people do to get RecycleBank in their city?

GONEN: Call your mayor. Say, “If we increase recycling participation, we will save our city money. There’s a program that can help us do that. And it will put money in our pockets and into the local economy.”

BPGL: What are you doing with the materials, now that there’s not much of a market to sell them?

GONEN: It is very closely tied to the economy. The reason the backup happened is that prices have set record highs in recycling for the last 3 years, now that the economy is bad, the prices have gone down.

You have to take a four-year view. The last four years, people made an absolute killing. Recyclers didn’t want to sell at low prices, so the materials are starting to back up. If they don’t sell the materials, they have to dump it in the landfill. How much are you paying to dump the materials and how much will it cost you to take them to the facility? That’s the complete story.

Prices dropped in last few months, but there were record-high prices the last four years. Most facilities contract the sales of their materials for 5 years. The contracts set a price ceiling and a floor. If the price shoots up, we benefit. If it drops, no one gets killed.

Some recyclers have been burned and hurt by the recent drop in prices. But most big players and those that did their contracts properly are stable.

BPGL: How long do you think it will be before the prices become more stable?

GONEN: Recycling tracks consumer confidence closely. If consumers aren’t buying at Wal-Mart, there’s no need to make so many boxes. As the economy returns, recycling will return. With a change of administration, there will be a boost in confidence. I don’t know what Obama is planning to do. Our business model is not dependent on aid from the federal government in any way. The last 8 years could not be any worse in terms of commitment to the environment. A simple change in administration focused on the environment will be good for us, because that’s what we do.

Ron Gonen, CEO of RecycleBank

BPGL: What was your motivation for starting an environmental company?

GONEN:  I’ve always had an interest in social policy and the environment. I started the first recycling program in my high school — a great high school called Germantown Academy in Philadelphia. We were using plastic silverware in the cafeteria. Through our student government, I got us to change to metal silverware so that we wouldn’t constantly be throwing stuff out. It was a little bit of a struggle, but there was a lot of support for it, and we made it happen.

I also started a program on hunger and homelessness for high school students. We hosted other high school kids from all over country. They came for three days to learn about hunger and homelessness.

Most of my life people said I was too idealistic.
BPGL: What do you recommend to today’s students who have an interest in the environment?

GONEN: The world’s going to be a very different place from an energy perspective in the next eight years. Try and focus on businesses and ideas that are going to make a difference over the next 3 to 8 years. Don’t get caught up in conversations around what to do to reduce greenhouse gases in 2035. Find things that make a difference today; that will lead you down a path to find employment.

Julia Wasson

Blue Planet Green Living (Home Page)

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