Deposit Return Scheme (DRS) – Frequently Asked Questions
Before You Read
Although the Deposit Return Scheme does not come into force until October 2027, the Craft Bakers Association believes it is important to make members aware of the changes well in advance.
For many bakeries, the impact is likely to be minimal, particularly where exemptions apply. However, for others, the scheme could require changes to the way drinks are sold, additional storage space, revised operating procedures, staff training or, in some cases, alterations to the layout of the business.
By providing this guidance now, we hope to give members plenty of time to understand the new requirements, consider whether their business may be affected and, where necessary, plan ahead without any last-minute pressure.
The operational details of the scheme are still being finalised and further guidance will be issued by Exchange for Change over the coming months. The Craft Bakers Association will continue to monitor developments and keep members updated as more information becomes available.
Deposit Return Scheme (DRS) – Frequently Asked Questions
A Guide for Independent Bakery Businesses
Effective from October 2027
The UK Government will introduce a Deposit Return Scheme (DRS) across England, Scotland and Northern Ireland from October 2027.
The scheme is designed to increase recycling by applying a 20p deposit to eligible drinks containers. Customers will pay the deposit when purchasing a drink and reclaim it when they return the empty container to a registered return point.
For many independent bakeries, the impact is expected to be limited. However, if you sell eligible takeaway drinks, there are important requirements you need to be aware of.
This guide is based on the latest information currently available. The Craft Bakers Association (CBA) will update members as further guidance is published by Exchange for Change before the scheme comes into force.
Frequently Asked Questions
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The Deposit Return Scheme is a UK-wide recycling initiative designed to encourage customers to return empty drinks containers for recycling.
When a customer purchases an eligible drink, they will pay:
The retail price of the drink, plus
A 20p refundable deposit
The customer can then reclaim the 20p by returning the empty container to a registered return point.
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Your bakery will be affected if you sell sealed drinks in:
PET plastic bottles
Aluminium cans
Steel cans
between 150ml and 3 litres.
Examples include:
Bottled water
Soft drinks
Energy drinks
Ready-to-drink coffee
Fruit juices
Canned drinks
Please note: Glass bottles are not included in the UK-wide scheme, although Wales is expected to introduce separate arrangements.
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From October 2027, when selling an eligible drink you will need to:
Charge the customer the retail price plus the 20p deposit.
Ensure the deposit is shown appropriately at the point of sale.
Customers will receive their 20p deposit back when they return the empty container to any registered return point.
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No.
The 20p deposit is not additional income for your business.
It is collected on behalf of the Deposit Return Scheme and is refundable to the customer when they return the container.
Even if your bakery is exempt from operating a return point, you will still need to charge the deposit on eligible drinks.
Exchange for Change has not yet published the detailed accounting guidance explaining exactly how deposits collected by exempt retailers will be settled through wholesalers and retailers. These arrangements are expected before October 2027.
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Probably not.
Many independent bakery shops are expected to qualify for an exemption.
You will generally be exempt if:
Your bakery is located in an urban area, and
Your customer sales area is less than 100m².
These businesses will normally not be required to operate a return point.
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Yes.
You may be able to apply for an exemption if your premises are:
100–199m² in an urban area, or
Under 200m² in a rural area.
Applications will be assessed by Exchange for Change once the exemption process opens.
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Larger premises that do not qualify for an exemption are expected to operate a return point where customers can return eligible containers and reclaim their deposit.
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Yes.
Even if you do not have to accept returned containers, current guidance indicates you will still need to:
Charge the 20p deposit on eligible drinks.
Display information explaining that your bakery is exempt.
Direct customers to their nearest registered return point.
Further guidance on signage and customer information is expected during 2027.
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There are currently two options.
Manual Returns
Customers hand their empty containers to a member of staff.
Staff will:
Scan each container.
Refund the customer's deposit.
Store returned containers safely.
Record returns for reimbursement.
This is expected to be the lowest-cost option but will require staff time and storage space.
Reverse Vending Machine (RVM)
Customers return containers using a machine.
Benefits include:
Faster customer experience.
Reduced staff handling.
Automatic recording of returns.
Compacted containers requiring less storage.
However, bakeries would need:
Space for the machine.
Electricity and internet connection.
Regular cleaning and maintenance.
Capital investment or leasing costs.
Small retailers may be eligible for grant support, although eligibility has not yet been confirmed.
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If you become a return point, you should consider several operational areas.
Hygiene
Returned containers may contain residual liquid or be dirty.
You should ensure:
Good handwashing facilities.
Suitable cleaning materials.
Appropriate staff hygiene procedures.
Food Safety
Returned containers should always be stored away from open food preparation and food storage areas.
Storage
You'll need sufficient space to store returned containers until they are collected.
Staff Training
Staff should understand:
How to accept returns.
How refunds are processed.
How to identify eligible containers.
How to answer customer enquiries.
Customer Communication
Customers will need clear information explaining:
Which containers qualify.
How the deposit works.
Where containers can be returned.
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Yes.
Current proposals are:
Manual return point
3p handling fee for each returned container.
Reverse Vending Machine
5p handling fee per returned container (subject to annual thresholds).
These handling payments are intended to help offset some of the operating costs.
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Although the scheme doesn't begin until October 2027, it is sensible to start preparing.
You should:
Review whether you sell drinks in eligible containers.
Measure your customer-facing retail area.
Consider whether you are likely to qualify for an exemption.
Think about where returned containers could be stored if required.
Keep up to date with future guidance.
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The operational details of the scheme are still being developed.
The CBA will continue to keep members informed by providing:
Updates on the legislation.
Practical guidance specifically for bakery businesses.
Information on exemptions.
Operational advice.
Templates and signage where appropriate.
Regular updates as further details become available.
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Whilst many independent bakery shops are expected to benefit from exemptions because of the size of their premises, any bakery selling eligible takeaway drinks should familiarise themselves with the new requirements now.
There are still several important operational details to be confirmed, particularly around retailer accounting processes and how deposits collected by exempt retailers will be reconciled through the supply chain.
The CBA is actively monitoring developments and will continue to represent members' interests as the scheme is finalised.
As always…
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