Charging for Bags: Is It Right for Your Business?

Should Your Store Start Charging for Bags?

New York is set to ban single use plastic bags in March of 2020. It’s a big move designed to cut down on waste. But there’s another way to do your part. A new trend has retail stores charging for single use plastic bags.

Small Business Trends contacted some experts to find the pros and cons of it for your small business.

Here’s an Overview

Joe Gladstone is an Assistant Professor, University College, London. A small surcharge for these bags seems to be working there.

“People are more responsive to losses than they are to gains,” he said recently in a BBC interview. In Britain, a small charge on plastic bags was more effective than just including a small increase in goods.

The Senate Bill 1508 which passed in New York only includes single use plastic bags. The law allows for each county to place a five-cent fee on paper bags.

There are some other American cities like Boston, Los Angeles, Chicago and Seattle that have a plastic bag ban. Some of the US cities that allow the bags with fees include Boulder, Colo., Portland, Maine and Washington, D.C.

According to the United Nations, as of July 2018, 127 countries have enacted regulations on plastic bags that includes charging fees.

So, what are the pros and cons to these fees for retailers and other small businesses?

You Don’t Lose Out on The Branding

It doesn’t cost a lot to print your logo and catchphrase on the side of the plastic bag. It’s a cheap marketing strategy that goes home with each and every sale. Charging a fee might be a little difficult at first, but you don’t need to scramble to find another marketing option.

You Can Turn People Away

There’s some evidence that charging people for bags can turn them off green behavior. They might even decide to buy somewhere else.

“There’s a lot of evidence that these kinds of charges can actually decrease pro social behavior,” Gladstone says.

You’ll also need to be careful not to position your company on the wrong side of the environmental debate. You don’t want to look like you’re profiteering on the back of  environmentalism.

Fees Work

There is evidence that charging a fee for plastic bag use works. Especially if the community is looking to decrease the number of bags used. As far back as 2012, Montgomery County in Maryland saw the percentage of consumers using the bags drop. The numbers decreased from 82% to 40% after a tax.

At the same time, shoppers in Arlington Virginia used the same number of plastic bags. There was no tax charged there.

What These Fees Mean for Small Business

Legislated plastic bag fees and/or bans have consequences for small businesses. There are 30 companies in New York State that make plastic bags.  A fee or outright ban could be 1500 jobs at risk.

Some small businesses are leaning towards offering paper bags as an alternative. But from an environmental perspective, there is evidence plastic grocery bags take 40% less energy to make. One study says they actually generate 80% less solid waste.

Fee Strategies for Small Businesses

Still there is a growing trend toward charging fees for plastic bags. Charging a bag fee at the check out in retail and grocery stores is a common method. There are some strategies you can use to implement this kind of program.

Make the case the extra plastic bag fee helps the environment. Some of your customers will pay the extra charge when you frame it up that way. Be clear and upfront on your webpages and social media.

Reusable Bags

You can offer reusable bags.

For example, paper bags are biodegradable. Find a supplier and make a bulk deal for a number of these. It can create another revenue stream. And keep you on the right side of the environmental debate.

You can stock cotton and hemp bags too. These come in a variety of colors and sizes. They are another way to market your goods and services in a positive light.

Charging for plastic bags isn’t a bad thing for small businesses. In the end, it gives your enterprise a good reputation where sustainability is concerned.

Image: Depositphotos.com

This article, "Charging for Bags: Is It Right for Your Business?" was first published on Small Business Trends



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