Edina and Plastic Bags
Last week I was chatting with a colleague. They mentioned that a neighboring city was contemplating instituting a $0.05 per bag fee for restaurants and retailers.
I LOVE recycling. The number of little stashes that I have everywhere (CFL bulbs, batteries, used eyeglasses) that are squirreled away in my house drive Fancy Boyfriend bananas. (It’s gotten markedly better since we joined Ridwell, btw)
At any rate - I’m a big advocate for reducing carbon footprints. Thoughtfully.
When Seattle instituted a similar fee awhile back I spent a lot of time between emails and conference calls, ensuring our Franchisee could successfully comply with the mandates. It was just one restaurant with an entire support system and it easily took between 5 and 10 hours between strategy and POS updating and end-to-end testing to make sure it worked ok.
Hearing that Edina is considering a similar move, my concern is about smaller restaurants and retailers. Sure, a lot of them can move to paper bags. Some food travels better in plastic bags. I wish there was a more sustainable and affordable option, but we’re not there yet.
The challenges with to go bags for restaurants are many and they’ll end up comping or eating that cost on the vast majority. Leaving restaurants to hold the bag. Quite literally. Larger retailers like Target or CVS have already created solutions in other cities. It’s the little guys that I’m worried about.
I wrote an open letter to the Mayor, the City Council and the Sustainability Manager to paint them a picture of the challenges businesses face in instituting these mandates. Most businesses won’t understand the nuance and complexities of this until they need to build this fee or tap their support team to build this fee. It’s more complex than seems at first blush and there should be a thoughtful conversation about how to proceed.
Also, if any restaurants are facing similar situations, please reach out. Myself or my kickass network of tech support friends can absolutely make sure you have the tools you need to navigate this.
Here’s the letter I wrote:
To: City of Edina Mayor, City Council and Sustainability Manager.
It recently came to my attention that the City of Edina is considering moving forward with a $0.05 bag fee for all retailers and restaurants in Edina. While I commend the City of Edina and their progressive stance with regards to sustainability, I would like to provide some insight into the technological lift that this would require for businesses who would be beholden to this fee.
My company helps restaurants implement new technologies. I am familiar with these fees as I worked for a restaurant brand who needed to implement the same fee in Seattle and similar fees in Colorado. Many of your retailers and restaurants may need to farm out this project at an additional expense; especially your smaller businesses.
I’d like to outline the challenges that these companies may face. It should be noted that these upgrades can cost a couple of hundred to over a thousand dollars per location depending on their Point-of-Sale system and its unique limitations. There are a handful of larger businesses (Cub, Target, CVS, Walgreens) who have faced these challenges in other cities so their implementations will be much easier. Smaller businesses that don’t have in-house tech teams or a corporate support staff will be the most hard-hit with the time and expense to comply.
Challenges:
In the case where Edina will be keeping $0.04 and letting the businesses retain $0.01 of the fee:
Because Edina will be asking businesses to remit part of the fee:
Businesses need to understand how those fees should be structured so they can be built correctly in the Point-of-Sale.
Businesses will need to establish accounting practices specifically for these fees, their collection, and their remittance.
Businesses may need to create or alter reporting to take these fees into account.
I’m not a tax specialist, but if part of the fee is being remitted and part is not, those two parts could be taxed differently and part of it could be considered revenue. This might be impossible to correctly build in most Point-of-Sale systems.
Some Point-of-Sale systems don’t allow for adding the same fee several times so a good number of these businesses will choose to make this an item rather than a fee.
For restaurants and businesses that offer curbside, there’s no way to know how many bags a customer will be using until they get there. Most online ordering providers don’t allow you to go back and add additional fees after the order has been completed. If they do find a way to do this, patrons will find small fees of 10 or 15 cents from the retailer/restaurant. If they’re not from Edina and maybe unaware of the bag fees, this will cause confusion and upset with these companies who are just complying with the local requirements.
For businesses offering online ordering, they would need to program that fee into their online ordering structure. Like curbside, there are challenges with charging these fees. They’ll likely pay these fees on behalf of their customers rather than find themselves outside of compliance.
The logistics of charging a dine-in restaurant customer with a bag when they’ve paid and want take their food home is challenging. It could also lead to an increase in food waste if customers don’t want to pay for the extra bag and leave their leftovers. This would be in direct conflict with the City’s objective of sustainability.
Whatever businesses decide to do, technologically, the changes will need to be validated with both their IT/support team and their accounting team. If these teams are external to the company, this could easily cost more than $200 per hour. Adding a new item may take an hour or two and building reports can take much longer – even 5 hours of work could be over $1000 to build. Unfortunately, this isn’t a straight-forward change to a Point-of-Sale and each individual business would have to not only implement Point-of-Sale changes but will need to update their processes as well.
I realize that Edina is looking to hire two specialists to help with the day-to-day. If those specialists are advising businesses on what needs to be done to their Point-of-Sale systems to collect these fees accurately, that can make the City of Edina liable if the fees aren’t programmed correctly.
Point-of-Sale systems are not created equal so adding these fees or items requires different work for every Point-of-Sale. Even if businesses have the same Point-of-Sale, they can use them in different ways, making consistent guidance incredibly challenging.
The City of Edina is asking their businesses to pay hundreds of dollars to implement this fee. Businesses will face frustration from their clientele, be penalized for non-compliance, and the funds collected will be of little benefit.
There are other ways for the City of Edina to reduce waste in landfills that doesn’t put such a large burden on businesses.
If the City of Edina is very concerned with plastic bags in landfills, the City could subsidize the fee for use of Ridwell at a city level, rather than putting the burden on retailers and restaurants. This is a unique recycling program that helps consumers recycle plastic bags, batteries, lightbulbs, and even Styrofoam! It’s an amazing program that, I think, would make a bigger impact on reducing waste.
Another consideration is taking a stance similar to Portland, Oregon instead. Details can be found here: https://www.portland.gov/bps/garbage-recycling/business-garbage-policies/single-use-plastics. To summarize Portland, Oregon’s stance, plastic straws, utensils, and condiments should only be provided upon request. I know during the pandemic I received many utensils that I didn’t need and ended up throwing them away. It’s a much simpler add for online ordering, causes less disruption to operations, and I would hazard to guess, a larger impact on landfills than plastic bags. It might even save restaurants money, not sending unnecessary items out the door.
I appreciate the City of Edina making sustainability a priority! I live in Richfield and patronize many Edina businesses. I’m a huge advocate for sustainability but I am also acutely aware of how these fees impact businesses. Since, in this case, I can enlighten the decisionmakers while they’re weighing their options, I thought it was important to provide some color.
The technological impact of these types of decisions aren’t usually taken into consideration until the time comes to implement them. It’s not easy, it’s not clean-cut, and it’s usually not cheap.
I’d be happy to discuss this further, if needed.
Thank you for your time,