What the Deposit Return Scheme means for your business
From 1 October 2027, the Deposit Return Scheme (DRS) will go live across England, Northern Ireland and Scotland. Customers will pay a refundable deposit on certain single-use drink containers that they’ll be able to redeem when they return the item to a designated point for recycling.
This marks a major shift in the UK’s approach to packaging waste. As part of their commitment to circularity, governments across the UK are aiming to improve recycling rates for single-use drinks containers to 90%, reducing littering and expanding opportunities to collect and reprocess high quality materials. The DRS is central to this vision, alongside new Extended Producer Responsibility (EPR) rules and improved recycling systems.
The UK Deposit Management Organisation (DMO), appointed in May 2025, will oversee implementation. But it’s businesses that produce or sell drinks — manufacturers, retailers, importers — that must manage the day-to-day operational, financial and customer-facing realities. For instance, while some businesses, such as those in the hospitality sector may not be obligated to host return points, if they sell drinks in deposit-bearing containers for off-site consumption, they will have the responsibility to ensure containers are collected and returned in line with the scheme’s requirements.
The implications are significant: from investment in reverse vending machines, to logistics, and labelling — not to mention shifting customer behaviour.
With key scheme details due in Spring 2026, now is the time for businesses to assess the impact, plan for disruption and make sure they’re ready to act.
At Sancroft we have unique insight and connections in this area based on over 20 years of experience. Drawing on this, plus learnings from over 40 countries that already have operational DRS systems, here are the 6 areas we recommend you should focus your attention on now.
1. Know your customer: What will DRS mean for them?
The consumer is at the heart of DRS, because the UK is asking consumers to change long established behaviours. Businesses will need to ensure consumers are aware of the deposit value and understand the practicalities of the scheme. They’ll also need to understand how their customers view recycling and packaging. Are they sustainability-driven, or will they require education to engage with the scheme?
Retailers, particularly those with large online operations or low-footfall locations will need to consider accessibility, convenience and clarity. There will be opportunities too. For businesses with loyal customer bases, DRS is a chance to build deeper engagement, rewarding returns and reinforcing sustainability as part of brand identity.
New thinking in line with these challenges and opportunities must start with detailed research how into how your customers think about and interact with your single-use drinks packaging.
2. Adapting your operations: What changes on the ground?
Implementing DRS isn’t just a front-of-house challenge, it will require changes across your entire operating model. From logistics to layout, businesses must be ready to handle new physical and procedural demands.
Mapping where you can store returned containers, plus how your business can allocate space for reverse vending machines or manual return points will guide the collection process either in-store or off-site. For sectors like hospitality, where space and staffing are limited, tailored solutions may be necessary to meet DRS obligations without disrupting service.
Operational complexity will also increase behind the scenes, particularly with cross-retailer returns, where a product sold in one store may be returned in another. Reconciling deposits, tracking container flow, and adapting Point-of-Sale and inventory systems will all be essential.
The message is clear: your business should plan now for system upgrades, staff training, and revised workflows to ensure readiness ahead of rollout.
3. Costing the transition: Machines, margins, and missteps
Beyond operational planning, all impacted businesses will need to carefully consider the financial impact of DRS. Costs will arise from managing the flow of deposits and reimbursements across multiple retail locations managing the flow of deposits and reimbursements across multiple retail locations, purchasing or leasing reverse vending machines, modifying store layouts and training staff. These are not one-off expenses but part of a broader shift in how value is managed across the supply chain.
Small-format stores may face cost pressures due to limited space and throughput. For them, alternative return models, such as manual take-back or shared return points may be more suitable. Retailers should consider modelling different investment scenarios and engage early across their value chain and financing partners to assess what is financially feasible.
In Scotland, a previous delayed rollout revealed the risks of investing ahead of clear guidance. Several businesses faced sunk costs as specifications changed, and timelines shifted. To avoid similar pitfalls, producers and retailers must press for detailed direction from the DMO, particularly on fee structures, reimbursement mechanics and infrastructure standards before committing capital.
4. Getting labelling right: Across borders and cutover timelines
One of the early challenges in Ireland’s DRS rollout was inconsistent labelling during the transition, where products with and without deposit marks were sold side by side, creating confusion for both consumers and retailers.
For producers, DRS-compliant labelling is a technical and regulatory hurdle that must be addressed early. Businesses operating across UK nations, and exporting to European markets, need to ensure labelling systems can adapt to different deposit regimes, timelines and legal requirements. Without clear guidance, there’s a risk of fragmented production lines, overstocking, or non-compliant packaging.
Consistency and clarity are essential. Mislabelled or unlabelled containers could lead to rejected returns, enforcement issues, or fraudulent activity. Producers should build in labelling flexibility, explore dynamic printing options and engage with the DMO to help shape a standardised approach – especially during the cutover period, when dual stock is likely to be in circulation.
5. Guarding against fraud: A new risk landscape
As with any incentivises based system, DRS is vulnerable to misuse, from cross-border fraud (bringing non-DRS containers in to claim deposits), which has been raised as a concern due to the phased approach for the introduction of glass in Wales DRS1, to tampering with reverse vending machines or submitting non-eligible packaging.
These risks can distort return data, inflate costs and undermine public trust in the scheme. BSI recently released a study highlighting the trust gap within circularity, highlighting that this is a key barrier to overcome. Businesses should assess how fraud could manifest in their specific context and implement proportionate safeguards, from machine-integrated security features to staff training and transaction monitoring.
Coordinated oversight from the DMO, local authorities and retailers will be essential. Sharing data and intelligence, especially near regional borders, can help reduce fraud and protect the integrity of the system.
6. Engage early with the DMO: Influence what comes next
Spring 2026 will see the DMO finalise operational decisions, from deposit levels to producer fees. Businesses should not wait until then to engage. Active participation in consultations, industry trials and working groups gives you a voice in shaping a workable, efficient system.
Those who have understood the practical implications of DRS will engage early on specific opportunities and risks. They’ll also stand a better chance of ensuring the scheme fits their operations and avoid costly retrofits or compliance surprises. Whether you’re a multinational producer or an independent retailer, your insights and feedback are vital to building a system that works for everyone.
The time to act is now
DRS is moving ahead with a confirmed start date and a growing set of requirements. While some areas are still in development, this period offers a crucial window for you to understand DRS in your specific context, prepare internally and shape a DRS model that is commercially viable and operationally efficient.
This is a complex change that will touch many parts of your organisation. Understanding it now will help avoid costly missteps later.
We can help. Our team is ready to support you to prepare for DRS with practical insight, risk assessment, and implementation planning. We’ll work with you to understand what DRS means for your operations and help you prepare for the road ahead.
If you want to discuss how we can support the transition, get in touch via georgia.scott@sancroft.com.