2. I buy $5 worth of product in durable container from seller and pay $7.
3. Seller gets $5, remaining $2 goes into smart contract from step 1.
So now there's three incentives to get the container back to the factory (each is $1 in this example, but would be a parameter in reality).
4. If the container shows up at the factory at all, whoever delivers it gets $1 for facilitating the delivery and the factory gets their $1 back because they didn't contribute to litter.
5. If it arrives back at the factory clean and in good condition, I get $1 back for not contributing to litter and for doing my part to ensure that the container is reusable rather than merely recyclable.
If you find a durable container in the wild that doesn't have a bounty on it, it's proof that the factory is cheating and the government gives you a $1 for it, and takes that $1 out of the factory's taxes.
If you find a bottle with the factory's bounty but not the consumer's bounty, it's evidence that the seller or buyer is cheating. The government gives you $2 for it and collaborates with the factory to take $2 out of the seller's taxes.
If you find a container with both bounties on it, it's evidence that I was too lazy to take it back to the factory, so you give it to the factory and get the $1 reward.
If I keep the container and repurpose it, the factory doesn't get their $1 back, but whatever I'm using it for hopefully counts as good advertising for them. Also, I can always just return it much later when it's done with the reuse purpose.
If you find a damaged container in the wild, recycle it with society's thanks and know that whoever let that happen paid $1 for their crime.
I couldn't be bothered going to a recycling depot so I would leave my recyclables outside next to the bins. People would walk around afternoon/night collecting all the recyclables with deposits from people's bins (recycling and trash).
It seems far simpler than your proposal.
But they only motivate manufacturers' packaging choices in the rare case where it's more cost effective to recycle the material than to purchase it new. If it's cheaper to use something that ends up in a landfill, most companies just will.
I think we need something that motivates them to want it back no matter what it's made out of.
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I make beer and I've been reusing the same bottles for years. The trick is to rinse them right away, otherwise it's a pain to get the dried beer gunk off the bottom. Bottle return programs don't motivate users to clean the bottles, so they need to be recycled rather than merely sanitized and reused (I think).