THE COLLECTION AND RECYCLING OF USED COMPUTERS USING A REVERSE DISTRIBUTION SYSTEM A PILOT PROJECT WITH STAPLES, INC. EXECUTIVE SUMMARY FROM THE FINAL REPORT TO THE U.S. ENVIRONMENTAL PROTECTION AGENCY Developed by: Product Stewardship Institute, Inc. 137 Newbury Street Boston, MA 02116 (617) 236-4855 www.productstewardship.us June 2005 EXECUTIVE SUMMARY1 PROBLEM STATEMENT Used electronic products are one of the fastest growing waste problems in the world. A study by the National Safety Council found that only 11-15 percent of computers were being reused or recycled in 1998, and that electronics recycling is still unavailable or very expensive in many United States cities and towns. Lead is found in the cathode ray tubes (CRTs) in televisions and computer monitors. Electronic components contain other toxic substances, including cadmium and phosphorous in CRTs, lead solder and copper on circuit boards, mercury in laptop displays, lithium batteries, and brominated flame retardants in the plastic housing. These toxic materials can be released to the environment from waste management or recycling practices, making it imperative that discarded electronics are handled safely with regard to human health and the environment. In addition, reusing and recycling electronics creates economic value, saves resources and energy, and creates more jobs than disposal. GOAL STATEMENT The goal of the project was to collect and recycle unwanted electronics from Staples’ retail and commercial customers using its existing product distribution network, and to evaluate whether this approach represents a sustainable business model for Staples. PROJECT CONCEPT Since retailers are a direct connection to consumers of electronics, they are considered logical points for consumer education, and potential take-back sites for used products. Many retailers already manage used electronic products from returns, lease exchanges, and the replacement of their own equipment at a cost that could be reduced or eliminated through a national electronics management system. A few companies have even conducted voluntary take-back pilot projects from retail customers. However, none of the financial models for calculating costs for a national collection, transportation, and recycling infrastructure had considered the cost savings from backhauling used electronics by reversing the existing distribution system. This project tested this collection model in the northeast, using Staples’ product delivery networks around the Killingly, Connecticut, distribution center (for retail products), the Putnam, Connecticut, fulfillment center (for commercial products), and the North Reading and Sharon transportation hubs in Massachusetts. Staples collected all brands of used computers at retail stores located in Maine, Massachusetts, New Hampshire, Rhode Island, and Connecticut, and from commercial customers in Massachusetts, New Hampshire, and Connecticut. The collected equipment was backhauled by Staples’ carriers and consolidated at its distribution and fulfillment centers, then transported via Staples’ trucks to Envirocyle, an electronics recycler, in Hallstead, Pennsylvania. 1 The full report (including this Executive Summary) is available at http://www.productstewardship.us/pilot_takeback_staples.html and www.plugintoecycling.org. Product Stewardship Institute, Inc. FINAL June 2005 Staples Pilot Project –Final Report to U.S. EPA Executive Summary COLLABORATIVE PROJECT/PARTNERS This project evolved from a joint meeting in April 2003 between representatives of Staples, Inc. (headquartered in Framingham, MA), the Product Stewardship Institute, Inc. (Boston, MA), and the U.S. Environmental Protection Agency/New England (Boston, MA). After PSI evaluated Staples’ potential financial exposure and showed how costs could be contained, the company contracted with PSI to design a pilot project for recovering computer equipment from its customers. PSI and Staples enrolled in EPA’s “Plug-In To eCycling” pilots, which added government financial and technical support, promoted cost-sharing incentives for manufacturers and recyclers, and brought greater recognition for Staples. Prompted by a January 2004 Plug-In To eCycling press event at the annual Computer Electronics Show, the project gained the support of 10 manufacturer partners (see Table 1). Each partner signed a memorandum of understanding (MOU) that committed these companies to pay for the cost of recycling their brand of computer equipment and a share of the cost of recycling nonparticipant brands, including equipment manufactured by companies no longer in business, up to a $10,000 cap. Additional partners included a recycler and five state agencies. Table 1. Project Partners Staples, Inc. Apple Computer, Inc. Product Stewardship Institute, Inc. Brother International Corp. U.S. Environmental Protection Agency/New England and Headquarters Dell Epson America, Inc. Envirocycle, Inc. HP Connecticut Department of Environmental Protection Intel Maine Department of Environmental Protection Lexmark International, Inc. Massachusetts Department of Environmental Protection Panasonic Sharp Electronics Corporation Sony Electronics, Inc. New Hampshire Department of Environmental Services Rhode Island Department of Environmental Management TIMEFRAME The pilot collections ran for six weeks, from May 29 through July 11, 2004. PRODUCTS ACCEPTED The pilot project accepted computer equipment, including computer processing units (CPUs), computer monitors, laptops, large peripherals (e.g., printers, multi-fax devices, facsimile machines, desktop copiers, scanners), and small peripherals (e.g., keyboards, mice, speakers, cables). Product Stewardship Institute, Inc. -3- FINAL June 2005 Staples Pilot Project –Final Report to U.S. EPA Executive Summary GENERAL OPERATIONS Retail Operations Computer equipment was collected at no charge at a cross-section of 27 Staples retail stores in five states: Maine (10 stores), Massachusetts (8 stores), New Hampshire (5 stores), Connecticut (3 stores), and Rhode Island (1 store). Equipment was shipped in the same manner as returns (using reverse distribution) to the distribution center (DC) in Killingly, Connecticut. Commercial Operations Computer equipment was collected at no cost from 14 commercial customers in three states that receive direct delivery of goods at their place of business by Staples’ trucks or common carrier. Staples either picked up the equipment upon delivery of new products, as part of Staples’ typical process for returning products that are defective, damaged, or otherwise unwanted, or scheduled a separate pick up. Other equipment was “live loaded.” Gaylords were transported back (using reverse distribution) to the fulfillment center (FC) in Putnam, Connecticut, or consolidated at either the Sharon or North Reading, Massachusetts, transportation hubs for a line haul the next day to the FC. Staples also took advantage of space on Envirocycle trucks from loads that were being hauled from other electronics collection events in Massachusetts and Connecticut back down to the Envirocycle facility. Transportation to Recycler When a tractor-trailer load of equipment accumulated at either the DC or FC, Staples’ trucks transported the computers to Envirocycle in Hallstead, Pennsylvania. Typically, when Staples had more than 22 pallets collectively at the DC and FC, it arranged for joint shipment of commercial and retail mixed material to Envirocycle. PROJECT RESULTS Data Collection The pilot project collected data that enabled Staples to understand the degree to which the reverse distribution collection approach could be part of the company’s sustainable business model, and how it could be implemented on a national scale. The retail and contract customer satisfaction surveys helped PSI to evaluate the program from the users’ perspective. The data collected will enable Staples to make adjustments and improvements to any future program expansion that it plans to undertake, in which case there will be an ongoing need for data systems to track equipment shipments, costs, and customer satisfaction. Materials Collected: Units and Weights PSI collected data in three ways for the retail and commercial collections: (1) Data provided by Envirocycle, which combined retail and commercial loads; (2) Data tabulated from surveys filled out by customers at the retail locations; and (3) Data tabulated from surveys filled out by commercial clients. Product Stewardship Institute, Inc. -4- FINAL June 2005 Staples Pilot Project –Final Report to U.S. EPA Executive Summary The total number of units of computer equipment collected was 4,522, weighing 107,360 pounds, and costing $7,983.10 to recycle (see Table 2). Although Staples advertised that it would only accept computer equipment, an additional 735 units of audio/visual and other equipment were collected, bringing the total number of units collected to 5,257. The non-computer related units represented approximately 14 percent of the total number of units collected. The total weight of all material collected was 115,028 pounds, costing $8,519.86 to recycle, for an average cost per pound of 7.4 cents, and an average weight per unit of 21.88 pounds. Between 38% and 50% of monitors, CPUs, and large peripherals returned by customers was manufactured by companies that were not partners in the pilot project. Table 2. Staples/PSI Pilot Project – Collection Summary/All Equipment Product Number Of Units Pounds Cost* Computer Monitors 1,642 62,396 $6,568.00 CPUs 1,076 24,748 $0 649 10,386 $727.00 1,089 8,843 $619.01 66 987 $69.09 4,522 107,360 $7,983.10 645 4,516 $316.12 90 3,152 $220.64 5,257 115,028 $8,519.86 Small Peripherals Printers/MFDs/Fax/Desktop Copiers/Scanners Laptops SUBTOTAL — COMPUTER EQUIPMENT Audio/Visual Equipment Other TOTAL – ALL EQUIPMENT * $4.00/monitor; no charge for CPUs; $.07/pound for all other products Retail Customer Surveys at Retail Locations As part of the retail customer survey results that PSI tabulated (see Table 3), 1,351 retail customers (81%) said they brought equipment from their home and 308 retail customers (19%) said the equipment was from their business. Some of the customers operated a small business, or were municipal officials and school employees, while the vast majority were residents. Table 3 also indicates that the vast majority of equipment came from storage, most people are willing to pay a fee to recycle their computers, and a significant number of people heard about the program through a store flyer or display. Table 3. Staples/PSI Pilot Project Retail Survey Data Equipment From Home Office 1351 308 Equipment Being From Used Storage 529 Product Stewardship Institute, Inc. 1095 Willing To Pay A Recycling Fee In The Future Yes No 1008 507 -5- Heard About The Program From Store Store Flyer Display Other 260 483 845 FINAL June 2005 Staples Pilot Project –Final Report to U.S. EPA Executive Summary Contract Customer Surveys at Commercial Locations Data from the 14 contract customers that participated in the pilot project were parsed into the following categories: Equipment type collected by business and by brand. Equipment type collected by business. Equipment type collected by major brand. There were 636 units of equipment collected, totaling 13,226 pounds, at a recycling cost of $752. Customer Satisfaction PSI developed a Retail Customer Satisfaction Survey and a Contract Customer Satisfaction Survey, which it administered by phone to a limited number of pilot project participants. Retail Customers Customer responses were overwhelmingly positive, and they wanted the program to continue. From an operational perspective, the program was easy to implement. Customers that brought in equipment did not want to dispose of it in the garbage but were looking for an opportunity to recycle it. Staples provided that opportunity. Many cited environmental reasons (e.g., toxics) for why they did not want to put it in the garbage. Others stored the equipment in belief that there was still value to it. Most customers were willing to pay a fee for the recycling service. (Even so, it must be kept in mind that those who participated in the recycling program are a subset of all those who have computers that need to be recycled. Those participating in recycling programs would be more likely to pay to participate than those who are not motivated to recycle their equipment.) Contract Customers Each company believed that Staples provided a valuable service and made it easy to collect the equipment. All wanted to see the program continue; the average need for service per company was estimated to be 1 or 2 times per year. The program cleared out space where the computers used to be stored, so employees were happy with the result. Employees were unaware of recycling options. Most of the companies contacted said that they would be willing to pay to recycle their equipment in the future, since most understood that they were actually required to safely manage their products. However, almost all said that they would only use Staples for this service if their price was competitive with alternative options. With that said, many thought there was an added value to ordering supplies from the same company that took back the used computer equipment. Product Stewardship Institute, Inc. -6- FINAL June 2005 Staples Pilot Project –Final Report to U.S. EPA Executive Summary Several companies wanted to receive a certificate of data destruction to ensure that confidential information was wiped clear off the computers. Since this assurance was only possible for recycled, and not reused, equipment, Staples did not offer reuse. PROMOTION/ADVERTISING AND CUSTOMER EDUCATION Staples took a cautious approach to promotion of the recycling program to keep from getting inundated with equipment. This allowed the company to remain under budget, keep its focus on the operations, develop buy-in from the whole Staples team, and develop a clear picture of what will be required to successfully roll this program out nationally. By design, Staples promoted the program slowly and ramped it up slowly. It never fully contacted all the media outlets, and kept the program low-key throughout the six weeks. Much of this focus was on an in-store flyer, store display, and banner. Six newspapers in Massachusetts, five papers in Maine, and one trade publication ran stories about the program. PROJECT COSTS The cost of collecting, transporting, and recycling 115,028 pounds of retail and commercial equipment collected in this pilot project was $93,432, or 19.9 cents per pound (see Table 4). Table 4. Pilot Project Costs by Phase and Funding Source. Who Paid U.S. EPA Staples Manufacturers TOTAL COST Project Phase Project Implementation/Evaluation Project Design Handling/Collection – Retail (northeast region) Transportation to DC and Envirocycle (northeast region) Delivery of Pallets – Commercial (northeast region) Pallet Pick Up/Delivery To FC and Envirocycle – Commercial (northeast region) Promotion, Staff training, Administrative Staff Recycling Cost $46,541 $17,000 $1,870 $11,355 $72 $1,044 $7,030 $8,520* $93,432 * Envirocycle’s recycling costs for this pilot project (7.4 cents per pound, on average) were approximately one-third the market rate (about 20 cents per pound). Bolded items have been used to calculate the cost per pound. Retail Collection Costs Staples internal cost for the 27 retail collections includes the cost of handling the computer equipment in the store, transporting to the DC, and transporting to Envirocycle in Pennsylvania. Staples treated retail returns of used electronics in the same manner as it treated other returns, and shipped equipment in its own trucks to the DC. Staples hauled 377 pallet loads of computers (equal to 17.14 trailer loads), at a handling cost of $4.96 per pallet and a cost to ship them to the Killingly DC of $9.67 per pallet. Staples also incurred costs of $450 per trailer load to transport to Envirocycle from the DC, equal to $20.45 per pallet. The total cost, therefore, to collect and transport 377 retail pallet loads to Envirocycle through the DC was $13,225.16, or $35.08 per Product Stewardship Institute, Inc. -7- FINAL June 2005 Staples Pilot Project –Final Report to U.S. EPA Executive Summary pallet (see Table 5). The cost to collect and transport this retail equipment to Envirocycle prior to recycling was 8.9 cents per pound. Adding to that the average price per pound to recycle the equipment of 7.4 cents per pound, the total cost to collect, transport, and recycle retail equipment in this pilot project was 16.3 cents per pound. If Staples had to pay the market recycling rate (estimated at 20 cents per pound delivered at the facility gate), this total cost would equal about 28.9 cents per pound. Table 5. Pilot Project Retail Collection Cost: Handling, Shipping, and Transportation Cost Type Handling Shipping to Distribution Center Transport to Envirocycle TOTAL COST Per Pallet Cost $ 4.96 $ 9.67 $20.45 $35.08 Per Pound Cost 1.26 cents 2.45 cents 5.19 cents 8.90 cents Staples and PSI used the following assumptions: • 1 system = 3 units • 6 systems = 1 pallet (Gaylord) • 22 pallets = 1 trailer load 1 unit = 21.88 pounds (from Table 2) 1 pallet = 393.84 pounds To calculate the following: • $771.76/trailer load • $ 35.08/pallet • $ 5.85/system • $ 1.95/unit Costs in the New England corridor, however, are lower than the company’s nationwide average given the northeast’s proximity to the DC and short transit times to stores. The national average cost to ship a pallet of computer equipment from the store to the DC is estimated to be $28.53 per pallet (see Table 6). Therefore, if the pilot was expanded nationally, the cost to handle each pallet and transport it to a qualified recycler through one of the company’s four DCs would be $53.94, or 13.7 cents per pound. This cost assumes that the handling cost is $4.96 per pallet, and that a qualified recycler will be within a 250-mile radius from a DC, which was the distance from the Killingly DC to Envirocycle in this pilot project. Since Staples will seek to find a recycler at a closer distance, this 13.7 cents per pound figure should be considered an upper amount. Adding to that the average price per pound to recycle the equipment of 7.4 cents per pound, the total cost to collect, transport, and recycle retail equipment nationally would be 21.1 cents per pound. However, if Staples paid the market recycling rate (estimated at 20 cents per pound delivered at the facility gate), this total cost would equal about 33.7 cents per pound. Table 6. Average National Estimated Retail Collection Cost: Handling, Shipping, and Transportation Cost Type Handling Shipping to Distribution Center Transport to Qualified Recycler (<250 miles) TOTAL COST Per Pallet Cost $ 4.96 $28.53 $20.45 $53.94 Per Pound Cost 1.26 cents 7.24 cents 5.19 cents 13.69 cents As Table 6 indicates, in a national effort, there would be a marked difference in cost from the northeast pilot project. The cost to recycle in other regions of the country would vary from the national average depending on the distance to the DC from a retail location and the distance from Product Stewardship Institute, Inc. -8- FINAL June 2005 Staples Pilot Project –Final Report to U.S. EPA Executive Summary the DC to a qualified recycler. There are four Staples’ DCs in the country – in Connecticut, Maryland, Indiana, and California. Commercial Collection Costs Staples also calculated its internal costs for collecting 636 units of equipment from 14 contract customer locations. Based on the data in Table 7, the full cost to collect and transport 35.33 pallet loads to Envirocycle through the FC would be $1,116, or $31.59 per pallet. Using an estimated weight of 21.88 pounds per unit (393.84 pounds per pallet) of equipment collected (from Table 2), the cost to collect and transport this commercial equipment to Envirocycle prior to recycling is 8.0 cents per pound. Adding to that the average price per pound to recycle the equipment of 7.4 cents per pound, the total cost to collect, transport, and recycle commercial equipment was 15.4 cents per pound. At an estimated market recycling rate of approximately 20 cents per pound, this total cost would equal about 28 cents per pound. Table 7. Pilot Project Contract Collection Cost: Handling, Shipping, and Transportation Cost Type Delivery of Pallets Cost $72 Per Pallet Cost $2.04 Pallet Pick Up/Delivery To FC $324 $9.17 Transport to Qualified Recycler (<250 miles) TOTAL COST $720 $20.38 $1,116 $31.59 Per Pound Cost 0.52 cents 2.33 cents 5.17 cents 8.02 cents Staples and PSI used the following assumptions: • 1 system = 3 units • 6 systems = 1 pallet (Gaylord) • 22 pallets = 1 trailer load 1 unit = 21.88 pounds (from Table 2) 1 pallet = 393.84 pounds To calculate the following costs: • $694.98/trailer load • $ 31.59/pallet • $ 5.27/system • $ 1.76/unit Recycling Costs The 10 participating manufacturers contributed a total of $8,519.86. Envirocycle offered the following discounted rates for equipment processing as project partner: $4.00 per monitor; no charge for CPUs; and $.07 per pound for large peripherals, small peripherals, laptops, and noncomputer equipment. Other Costs Promotion, staff training, and administrative staff costs were estimated to be approximately $7,030. Staples did not believe that storage space for used electronics was a factor that added cost to the project. Backhaul opportunities on Staples’ trucks are frequent, and the equipment was treated as a "cross dock shipment" when it got to the DC, where it went immediately into a trailer with equipment from the FC for shipment to Envirocycle. The time taken by Staples’ technical and managerial staff to plan and implement the pilot project was not estimated. Product Stewardship Institute, Inc. -9- FINAL June 2005 Staples Pilot Project –Final Report to U.S. EPA Executive Summary REGULATORY ISSUES Federal Guidelines Under federal regulations, any unwanted electronic equipment containing a cathode ray tube (CRT), including computers and televisions, is currently considered a hazardous waste under federal regulation (40 CFR Part 260). Hazardous waste regulations do not apply to household sources of electronics, or to businesses that generate under 7-8 CRTs per year. States can have more stringent regulations governing the handling of electronics, and there is no one set of standards that applies to all states. Therefore, the result is a patchwork of regulations that must be considered when setting up a program to accept used electronics. This situation might be alleviated to some degree when the federal regulations for CRT electronics are finalized, as expected in the fall of 2005, and adopted by the states. The proposed rule is available on the PSI website, at http://productstewardship.us/pilot_takeback_staples.html. In the interim, the U.S. EPA has provided guidelines for the safe management of materials (available at http://www.epa.gov/epaoswer/osw/conserve/plugin/pdf/guide.pdf) for its “Plug In” partners who collect electronic equipment for the purpose of recycling. Pilot States Regulations States have some ability to streamline regulations for electronics product stewardship efforts, and PSI worked with Staples and state agency officials to identify and comply with the states’ regulatory interpretations. None of the state regulations added significantly to the cost and complexity of this project. To standardize the handling procedures for all Staples facilities and associates in the five pilot states, Staples adopted the general guidelines for universal waste handling, transport, and storage. PILOT PROJECT BENEFITS There were numerous benefits to conducting this pilot project, many of which should be considered when evaluating a national expansion. Each of the following benefits is discussed in greater detail in the full document, as are the key lessons learned. Solves a Pressing Environmental Need Provides a Known Collection Location and Education Opportunity Creates Good Will Demonstrates Collaborative Problem Solving Provides One Stop Shopping Offers Staples a Promotional Opportunity Offers Manufacturers a Promotional Opportunity Establishes Staples as a Brand Leader Provided an Impetus for Other Retailers to Engage Enabled Data/Information Sharing Product Stewardship Institute, Inc. - 10 - FINAL June 2005 Staples Pilot Project –Final Report to U.S. EPA Executive Summary KEY LESSONS LEARNED Program was Logistically Feasible: It is feasible for a retailer to take back unwanted computer equipment at a retail store, or from businesses, using a reverse-logistics collection, transportation, and recycling model. Program was Successful. Staples staff, retail customers, and contract customers were enthusiastic about the program and want it to continue. Over 57.5 tons of equipment was collected in six weeks from both retail and commercial customers at a cost that was competitive with other electronics collections. Staples’ Customers are Environmentally Aware. Retail and commercial customers are savvy about environmental concerns from electronic wastes. Few questioned the need for collection. Staples Customers are Willing to Pay for Computer Recycling (Note: This should not be used as a reason to charge in the long-term, since there are still a significant number of people who will not pay. But it can provide funds to start or supplement a program.) There is a Backlog of Equipment. There is a significant backlog of equipment that needs to be collected initially from customers, particularly among businesses, making a simple “back haul” of equipment difficult for a “first time” recycling effort. Computers Returned from Non-participating Companies were Significant. A significant percentage of computer equipment returned to the collections came from those that did not contribute financially to recycling costs. Manufacturer MOUs Were Time Consuming to Negotiate. Most manufacturers wanted to change some aspect of the standard MOU, and a few wanted individualized agreements that were much different from the basic template. Communication Miscues were Costly. Communication between the recycler and the Project Team resulted in missed data gathering opportunities and extra time and cost to extrapolate data (e.g., leaving one company out of the brand sort). Commercial Collections were Unique. Whereas retail collections followed a noticeable pattern, Staples needed to arrange contract customer collections individually owing to a variation in pick up locations and equipment quantities and types. Over time, models should evolve within these collections, making contract customer service delivery easier. A Little Promotion can go a Long Way. Taking a low-key promotional approach worked well for Staples employees and management, even if additional customers could have benefited by the initial pilot. Expect Business Equipment. There was a small, but significant, segment of retail customers who brought equipment used for business, including municipal offices. Recyclers were Staples Shoppers. Most of those interviewed who returned equipment to retail stores said that they typically shop at Staples. Few people came into the store only because of the recycling program, largely owing to the focus on in-store promotion. Product Stewardship Institute, Inc. - 11 - FINAL June 2005 Staples Pilot Project –Final Report to U.S. EPA Executive Summary Data Quality was Not High. Allowing retail and contract customers to fill out their own data sheets did not provide high quality data. Beware of Municipal Regulations During Outreach. Some municipalities would not allow Staples to advertise using a banner on the exterior of the store. RECOMMENDATIONS Whether to expand this computer recycling project nationwide is a decision for Staples management. However, from the data developed from this project, there appears to be little doubt that there is a clear need, and opportunity, to expand the collections both at retail outlets and contract customer locations. The computer recycling service was well received; there are numerous benefits to expansion; and Staples’ internal costs were reasonable. In addition, any costs incurred by Staples could be offset by a fee charged to customers, many of whom are willing to pay to recycle, and/or by manufacturers’ contributions. Adding computer recycling service to Staples’ growing environmental products and services will solidify Staples’ position as a company that not only provides quality office products and services, but one that cares about the company’s impact on the environment and the community served by its retail stores. Expanding this recycling service would further enhance Staples’ image as a sustainable business. Those seeking electronics collection service, however, should not place an over-reliance on retail take-backs, since these programs are undertaken at a company’s discretion. If Staples, for example, decides to end the program, for whatever reason, this might pull the plug on recycling if this were the only, or most significant option, available to consumers. Therefore, while the Staples pilot project should be understood as a significant opportunity for Staples and other retailers, these retail programs need to become part of a more comprehensive collection and recycling infrastructure. Listed below are specific recommendations that Staples should consider in expanding computer recycling services to other areas of the country, or making it permanent in the five New England states that were part of the pilot project. Each is discussed in more detail in the full document. Program Logistics Treat Used Computers Like A Return. Typical retail product returns are brought to a customer service representative, who records vital information directly into a computer database and takes possession of the product. Used computers should follow a similar procedure, which will ensure quality data, reduce the likelihood of equipment breakage, and provide a greater level of service. Staples could handle computer returns from businesses at the point at which orders are placed. Charge a Recycling Fee. Until a state or national financing system comes into existence, charge a fee to collect and recycle computer equipment from both retail and commercial customers. The fee charged to customers will need to be competitive with other recycling services, particularly among commercial customers, although there is an added value in having one company – Staples – provide office supplies and recycling services (on the backhaul) to these commercial customers. Providing a tangible community benefit, as it did Product Stewardship Institute, Inc. - 12 - FINAL June 2005 Staples Pilot Project –Final Report to U.S. EPA Executive Summary in a separate pilot project for retail customers in the Northwest, would add to the acceptance of the retail fee. Recover the Full Recycling Cost in the Recycling Fee. Do not rely on a cost share from manufacturers in setting the recycling fee owing to the large percentage of computers collected from non-participating manufacturers. There is a question as to whether participating manufacturers will continue to cover the costs imposed by manufacturers that are not taking responsibility for their fair share, and put themselves at a competitive disadvantage. Expand the Limit on Equipment Allowed per Retail Customer. Instead of restricting residents to one computer system, consider expanding the limit on retail customers to 4 or 6 units per customer, as was successfully demonstrated in Staples’ Northwest pilot project. Some limit will be needed if Staples will want to discourage business equipment. Identify Business Equipment. Since some states may require that equipment from businesses be identified and treated differently from equipment from households, ask a question on the in-take survey as to the origin of the equipment of those entering retail stores. Phase Collections — Cleanout and Maintenance. Before a maintenance program can be put in place, anticipate that a large initial amount of material will be generated in areas without past collections. Conducting equipment clean outs, phasing collections, or ramping up service will ensure that the program is not inundated with equipment. Implement a Commercial Equipment Pick-up System: Ensure a chain of custody to better track equipment and report to customers by assigning a bar code or other identification to shipments at the point at which the recycling service is ordered. Develop a Standard MOU with Manufacturers with Few Variations. Dictate the terms of an agreement and only allow variations in very special circumstances. If a business wants to collect its own material, it should be required to pay for the cost of separating and recycling its own equipment. Assign a Dedicated Staples Daily Contact. Consider assigning an internal dedicated staff person that could serve as the daily point contact to retrieve data, contact Core Team personnel, and communicate preferences and decisions. Promote Reuse. Ask potential recyclers being interviewed for future collections to provide the cost of adding reuse to the services provided, and the method by which data will be destroyed. Use domestic reuse organizations until a credible system is put in place for the return or proper management of electronics sent for reuse to other countries. Enhance Data Security to Allow for Reuse: In the future, electronics from companies should be tagged with a noticeable sticker or other identifier to signal to the recycler that special handling is required (e.g., scrubbing the hard drive to allow for reuse). By instituting a rigorous procedure that ensures data destruction, reuse might increase for companies that have newer and, therefore, more marketable, equipment. Incorporate Recycler Selection Criteria. If expanding computer collections across the U.S., use the recycler selection criteria developed for the pilot project and determine the Product Stewardship Institute, Inc. - 13 - FINAL June 2005 Staples Pilot Project –Final Report to U.S. EPA Executive Summary relative importance of the proximity of a recycler to a consolidation point, among other issues. Collect Additional Items. Consider collecting and recycling other electronic items that Staples sells but doesn’t now collect, such as computer discs and other electronic media. These items should be phased in along an established timetable. TRAINING AND REGULATORY REQUIREMENTS Provide Training For Contract Customers. Many of Staples’ contract customers started recycling their computer equipment during this pilot project. Consider developing training specific for companies that will need to educate their own employees to start recycling computers instead of throwing them away. Handle All Materials Using General Guidelines For Universal Waste. Adopt general guidelines to abide by the universal waste requirements if expanding the program nationwide or making it permanent in the five New England states that were part of the pilot project. Seek to Standardize Regulatory Requirements. Although complying with state regulatory requirements was not overly burdensome, and PSI received excellent assistance from state regulatory officials, the process was time-consuming. Standardized regulations will lower the costs to collect, transport, and recycle electronics. However, if the regulatory requirements prove to be too cumbersome in some states, consider limiting the initial program to states with a more relaxed interpretation of how electronics can be safely managed. Develop a Tracking System for Collected Computers. Staples’ automated return system already tracks customer information, product type, brand name, and other data. Explore adapting this return system to accommodate customers bringing used electronics. Standardize Computer Handling Guidelines And Training For Staples Associates. Refine and standardize training for the national rollout to ensure that it will meet the regulatory requirements in all states. DATA COLLECTION, CONTRACTS, AND BUDGET Maximize Data Collection Capabilities Within Staples. Staples’ pallet-cost collection system should be supported by more specific methods of per-unit accounting, including the assignment of bar codes to individual items using methods comparable to Staples’ current return and exchange procedures. Calculate Other Costs To Staples. Calculate and budget for total costs that will likely be part of the national expansion of the collection system, including associate and management time, storage, equipment and supplies, advertising, and promotion. Budget for Non-computer Equipment. Expect, and budget for, a certain percentage of related non-computer equipment, even if it is specifically not accepted as part of the program. Develop Detailed Contract with Recycler. Develop a detailed contract with the recycler regarding expectations about the companies for which brand sorts should take place, whether retail and commercial loads will be tracked separately, the forms used for data collection, Product Stewardship Institute, Inc. - 14 - FINAL June 2005 Staples Pilot Project –Final Report to U.S. EPA Executive Summary how manufacturer cost shares are to be calculated, who invoices manufacturers for their cost share, average weights used per equipment type, and which equipment types will be sorted by brand. EDUCATION AND OUTREACH Phase Program Promotion. Continue the practice of phasing in the collection program concurrent with ramped up advertising and promotion to ensure that staff do not become overwhelmed by equipment and continue to support the program. Provide Recycling Education to Staples Customers. When equipment is being collected, Staples has a unique opportunity to educate retail and commercial customers about why recycling computers makes sense, what happens to the equipment once it is picked up, what would happen if the equipment was not collected, and what other products Staples recycles. Enhance Communication with Partners. Regular communication updates with partners will enhance project communication and reinforce the common goal toward which all partners are working – the recycling of computer equipment. Engage Pilot Partners in Outreach and Education. To increase project visibility, contact pilot partners to assess the promotional and outreach resources available through these organizations. Obtain Local Approval to Exhibit Store Banners. Seek a waiver from the prohibition in some municipalities to putting a banner on the exterior of the store. Coordinate with America Recycles Day. Nearly every state has an America Recycles Day coordinator who would be receptive to a partnership on computer recycling. PROGRAM EVALUATION Evaluate Customer Satisfaction. Staples should train its customer service staff to survey retail and contractor customers to learn valuable lessons about the program. Provide for Internal Feedback. Staples associates familiar with the recycling program should provide important feedback on needed improvements. Communicate Project Results. Holding a briefing at critical junctures in the project timetable will ensure that project results and implications are understood, and that the feeling of participating in a joint project is enhanced. Product Stewardship Institute, Inc. - 15 - FINAL June 2005