RecycleBank – An Analysis

Written by Lillian Zhao, Environmental Valuation and Cost Benefit News Published: April 26, 2009

Many people know recycling is the right thing to do, but they don't have the motivation to actually do it. Now, New York-based RecycleBank... tracks how much you recycle [and] awards you points, which you can then redeem for rewards such as groceries... RecycleBank has more than doubled recycling rates in every community that's deployed its program.

RecycleBank helps municipalities dramatically increase recycling by rewarding households for the amount they recycle. [They provide] ... every household with a recycling container ... embedded with a chip that is read by the mechanical arm retrofitted onto a ...city's recycling truck. In this way, [they] identify which households recycle and how much. Households can then log onto [their] Website and see ... how much they recycled and how many points they have earned. Points can be redeemed at over 400 local and national stores.

They expected to be providing services in 15 states by the first quarter of 2009.

The website also shows how many trees and gallons of oil were saved by recycling. Mnicipalities benefit because they pay less to landfills and ... reward partners benefit because they get access to ... in-home advertising....

Municipalities pay ... a cut of the savings ... generated by diverting waste from the landfill. For instance, if municipalities are currently sending 100,000 tons of waste to the landfill per year at $70 per ton, and they are able to get people to recycle and divert half of this waste stream, it results in a savings of $3.5 million. Their fees come out of these savings. They also generate revenues through advertising from people coming to redeem their points.

Through December 23, 2008, they claim to have saved 574,935 trees (measured by tonnage of paper recycled) and 38,405,690 gallons of oil (measured by pounds of plastic, aluminum, and glass recycled).

According to Business Week families can earn up to $400 a year in RecycleBank points. RecycleBank, which raised $30 million last year on top of $15 million in an earlier round, takes a cut of the savings that the cities get from reducing how much trash they send to landfills.

by Lillian Zhao, former Senior Associate at Innosight, a consulting firm co-founded by Clayton Christensen and Mark Johnson specializing in innovation and disruptive strategy.

Works cited:
Forbes, December 23, 2008: Rewarded for Recycling
Business Week, December 16, 2008: Venture Capital's Favorite Startups