Deposit Return System Explained: What Sustainability Managers Need to Know in 2025

When was the last time you used a reusable cup at an event? Maybe it was last week, or even months ago, or maybe even perhaps, never?

Either way, the simple act of returning a cup is becoming part of a region-wide shift towards systems that reshape how businesses think about waste.

Deposit Return Systems can be tailored to your business requirements and goals.

With upcoming legislation and consumer demand for eco-friendly practices, Deposit Return Systems (DRS) are becoming the next thing in enabling a circular economy. The landscape is evolving fast, with the upcoming Deposit Return Scheme upcoming in 2027 set to roll out across industries and regions.

For sustainability managers, now is the time to get ahead of the curve:

• Understand how DRS works

• Explore what it means for your operations

• Discover how to turn compliance into opportunity

So how does a deposit return scheme actually work? What does it mean for your business? And how can you get ahead of the curve before legislation makes it mandatory?

Let’s break it down.

Key Takeaways:

• Deposit Return Systems are becoming essential with upcoming legislation and consumer expectations.

• With the right technology, Deposit Return Systems can be simple and effective.

• Early action provides long-term advantage and unlocks opportunities.

What is a Deposit Return System?

Simply put, a deposit return scheme is an incentivised and easy way of returning containers to be recycled or reused. A small, redeemable deposit is placed on the item, which is refunded upon its return at a return point. People can return their own items or ones that they have collected.

Sounds simple, right? That’s because it is.

People feel rewarded for doing something for the environment, and in turn, we reduce the waste, pollution, and emissions tied to throwaway consumption.

And it’s not just about cups and bottles. DRS can be applied to a wide range of packaging, from food containers to event ware and even materials in construction. That takeaway container from last night? If it’s part of a DRS, there may be a local return point where it can be dropped off, ready to be reused and filled again.

By encouraging and rewarding return behaviours, DRS supports the shift from a linear to a circular economy, keeping materials in circulation longer, reducing single-use waste, and cutting down on emissions.

The result? Higher return rates, measurable environmental savings, and a regenerative approach to resource use.

How Does a Deposit Return System Work in Practice?

DRS are designed to make it easy and rewarding for people to return packaging. While the specifics vary depending on the sector and materials, the key components are typically the same:

• Deposit is placed at the point of sale: a small fee is added to the price of the item.

• Use and return: Customers use the item as intended, return it to a designated return point (either on-site, at a reverse vending machine, or at a drop-off location).

• Refund issued: Once returned, the deposit is refunded.

• Packaging is collected: Returned items are collected and either recycled or reused.

Whilst the process is simple, making it seamless for the end user is where real behaviour change happens.

There are DRSs already in use around the world. In Latvia, return rates jumped from 45% to 83% within just three years of launching their scheme.

At Circulayo, we’ve developed our own DRS technology, Tap & Return, to help boost return rates and engage users more effectively. Early trials have already shown promising results, with return rates reaching 76%.

Introducing Tap & Return

Our Tap & Return technology makes DRS even easier. No app downloads, no fuss. Just scan the item at a return point, tap your payment choice, and the deposit is back within seconds.

We understand that all businesses have different requirements, which is why Tap & Return is designed to be flexible, seamless, and easy to integrate without disrupting operations or customer habits.

Learn more about Tap & Return

Why It Matters for Businesses in 2025?

As the circular economy gains traction, businesses can’t afford to treat reuse as a “nice-to-have”. 2025 is a critical year for businesses to prepare and be ready for upcoming changes.

Upcoming Legislations

With the UK-wide Deposit Return Scheme scheduled to roll out in 2027 for drink containers from 150ml to 3 litres, businesses and retailers are now looking at how this will work, including introducing pilots and local trials. Getting ahead of legislation means avoiding costly last-minute changes and building a system that works with your operations, rather than reacting to one that’s forced.

Businesses that produce or sell drinks in eligible containers will have new responsibilities under this scheme in England and Northern Ireland, whereas similar responsibilities will apply in Scotland and Wales are developing their own.

Growing Consumer Expectations

Consumers are increasingly choosing businesses that take visible, meaningful action on waste. Implementing or supporting DRS shows you're walking the talk, and that you’re ready for what customers (and investors) expect in a climate-conscious world.

More industries are expected by customers to think about their packaging and sustainability.

Sustainability is no longer a trend; it's a standard that consumers are holding businesses to. With 78% of consumers feeling sustainability is an important factor whilst shopping, it is important that brands and businesses look into implementing sustainability into their business operations.

Business Opportunities

Early adopters of reuse systems gain more than just regulatory compliance. There are many opportunities that a DRS can lead to:

• Lower waste disposal costs.

• Enhanced brand reputation and customer loyalty.

• Insights into product usage and return behaviours.

• Opportunities to innovate around product design and delivery.

• Investment opportunities from external stakeholders.

• Become a sustainability leader within the industry.

Adopting a DRS now sets your organisation apart as a forward-thinking, customer-conscious brand ready to lead in a more circular economy.

Advantages and Disadvantages for Industry Leaders

Like any system-wide change, Deposit Return Schemes come with both benefits and challenges. For sustainability managers and industry leaders, understanding both sides is key to making informed decisions and planning for successful implementation.

Advantages	Disadvantages
Improves sustainability performance to help meet ESG goals and reduce waste, emissions, and plastic pollution.	Initial setup costs may be pricey, especially to smaller businesses, due to infrastructure, logistics, and technology investments; however, this is a one-time cost at the beginning.
Stay ahead of upcoming legislation and avoid penalties or rushed implementation.	Success depends on customer participation and proper engagement, meaning customers need to be aware that it is in place and how to use it.
Demonstrate that your brand is sustainable with visible action taken and building customer trust.	Not one size fits all, so the system needs to be tailored to your business.
Encourages repeat visits, engages customers, and builds loyalty through incentives and positive experiences.
Gain valuable metrics on usage, returns, and waste reduction that can inform future decisions and operations.

With the right approach and technology, businesses can turn potential barriers into drivers of innovation, efficiency, and positive environmental impact. The key is to start early and smart with technology and data.

What Sustainability Managers Can Do Right Now

With legislation on the horizon and public demand growing, 2025 is the year to move from planning to action. Here are four key steps you can take now to prepare your business for the transition to a Deposit Return Scheme:

Conduct a DRS readiness assessment

Map out your current operations, and identify the opportunities and gaps in your current systems. This will give you an idea of what you will require.

Choose technology that scales to your business

Not every business operates the same, so it is important to find technology that works for you. At Circulayo, we understand that businesses have different requirements, that's why our technology is designed to adapt to different industries, business types and sizes.

Our tech is custom for each business we work with to ensure it meets their requirements.

Pilot smart return systems in select locations

Trial small-scale systems first to test the workflow, customer engagement, and impact on business. Once successful, you can scale it across your business to have a larger impact.

Educate staff and stakeholders, measure success early

Train teams on how the system works so they can assist customers, set measurable goals and use data to track progress from day one. Using data is vital to see your progress and make adjustments where needed.

The shift to a DRS doesn't need to be complex. It requires the right tools and a proactive approach to have a real impact.

At Circulayo, we design tools that scale with your business operations. Our technology covers all bases, from data collection and analysis, customer engagement to our very own DRS technology.

Looking to implement your own DRS? Get in touch to see how we can support your transition.