$0.30 Surcharge for a Plastic Grocery Bag

This is another story from my vacation in Ireland. I bought some fruits, yogurt, and bakery from a convenience store. The clerk asked me if I wanted a bag for what I bought. I said "Sure." because that’s the way it is in the U.S. Then I noticed there was a charge for 0.22 Euro on the receipt. It was labeled as a government mandated fee for the plastic bag. At 1 Euro = 1.40 US Dollars, that was like $0.30 for a bag. Some people call it PlasTax. According to one source, implementing the fee cut the plastic bag usage in Ireland by 90%.

In the U.S. I get a discount of $0.05 per bag if I bring my own bags to the two grocery store chains near me. It’s not by law, just store policy. Technically not getting the $0.05/bag discount is equivalent to paying a $0.05 surcharge for each bag. But I bet most customers don’t know about the surcharge because it’s not on their receipt. If we increase that surcharge from $0.05 to $0.30 like in Ireland and make it a true surcharge which shows up on the receipt, not just a lack of a discount, I’m sure it will change people’s habits really fast and cut down our consumption of plastic grocery bags significantly. It’s a strange phenomenon. People don’t mind missing out on some discount but they will change their behavior if they pay a surcharge. Economists say it has to do with framing.

By the way I love their yogurt. Not too starchy or too sweet like the Dannon and Yoplait yogurt I get here in the U.S. It was cheap too. 0.87 Euro for a big 16-oz jar. I will try some different brands at Trader Joe’s and see if they have yogurt made in that style.

One other thing I like about my experience in Ireland is that their price tag includes everything. The sales tax (VAT) is included in the price. What you see is what you pay. I walked into a hotel. The room rate posted on their board was 69 Euros. I paid 69 Euros. End of story. There wasn’t a separate high tax just for hotel guests. If there was, it was included in the price tag.

Here in the U.S. we do the same for gas. The price posted on the board is what you pay. Taxes are included in the price. I wonder why we can’t do it for everything else we buy.

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  1. Jules says

    I like that taxes are detailed out on the receipt and wish it were the same for gas – so people can see exactly how much the government is taking and feel it when they see the added cost.

  2. drake says

    What do people use for kitchen trash bags? I use the plastic grocery bags for that purpose so I don’t want to be charged for them.

  3. Contrarian says

    I don’t like the feel of a PlasTax and don’t think we need another layer of government in daily commerce. But I sure would like to see the retailers take responsibility for distributing excess “baggage”. How many times have I been asked if I “needed” or “wanted” a bag for my small purcases? Nada! Without exception, they’re thrusting my goods into one or more bags, sometimes doubled-up for good measure, before I can think to tell them to back off the plastic. This could be a very simple profit adder for the retailer if they would just train the staff to ask before bagging. And why not offer those premium “permanent” bags at the register (for a fair price) instead of displaying them in the aisles like just another grocery item?

  4. AM says

    Ah, you’ve touched the secret that is European yogurts and other dairy products 🙂

    Try some Greek-style yogurts, many stores in the US carry them. They are quite different (better, IMHO) from your stock Yoplait or Dannon. TJ’s fig Greek yogurt is great, and Whole Foods and Nob Hill carry a Greek-style brand that has an awesome honey version. Also unflavored Russian yogurt is pretty good, and commonly sold (at least in California).

    If you like dairy in general and feel adventurous, find a Russian store and get some farmer’s cheese (“tvorog”). It’s nothing like cottage cheese you may be used to.

  5. ZedHead says

    @drake: What do people use for kitchen trash bags?

    Where I live (Zurich Switzerland) you pay for each and every trash bag – current price is about $1 for a 17 liter bag. It makes some people think about what they throw in the garbage vs the recycle bin. It also makes some people litter more…

  6. JeffC says

    “The price posted on the board is what you pay. Taxes are included in the price. I wonder why we can’t do it for everything else we buy.”

    Seriously?!? The government would love to do this. Hide the tax! Nobody will ever know!

    If ALL taxes were detailed on the receipt (or anywhere), there would be a tax revolt in seconds. People are ignorantly blissful not knowing the truth.

  7. Harry Sit says

    @Jules and @JeffC – No they are not trying to hide it. The taxes are actually broken down on the receipt. But the price tag shows the gross. You know what your total is before you go to checkout. If you care how much you paid in VAT, it’s on the receipt.

  8. Wai Yip Tung says

    I think your analysis missed an important factor. The monetary value is not the only consideration. It is also important to consider what is the normal course of action? In your store’s case if you do nothing you are $0.05 short. People can live with that. If it takes some action or negotiation to get a tiny discount, most people won’t bother with that. In Ireland, the normal course of action is no bags. If you want one you have to approve that. If you want double bag you have to ask for it specifically. That’s the big difference.

    Also the monetary value is not inconsequential. In my town I get 10 cents discount for the entire transaction, irrespective of the amount of the purchase. Nobody give much thought to this amount of money. But if you buy 2 yogurt for $2.5 and the bag cause you an additional $0.3, that’s not inconsequential. If you want 10 shopping bags, that will add up to $3. People will pay attention to that.

    I think it is a great law and it should be introduced in US. To those who are disgusted to the word ‘tax’, this is not about money, even I said it is not inconsequential. This is about an effective way to change people’s behavior to stop generating mountains of throw away plastic bags.

  9. Wai Yip Tung says

    Also quoting the final price including tax is excellent! It should be required by law here. The chief offender of deceptive pricing is air ticket sales. It is one thing to consider an extra few percent of sales tax. It is another thing to consider the extra fee not disclosed with the bargain low price, which can add up to 50% or even 100% of the base price. This sort of deceptive pricing really should be banned by law.

  10. Harry Sit says

    Wai Yip Tung – Thank you. That’s an excellent point. The default option makes a big difference. Even if it’s $0.05/bag, if people have to ask for the bags and pay for them, people will start changing their behavior.

  11. Jules says

    If it’s going to be the default option, let the private stores do it on their own, not by law. Like it is at Aldi – no bags unless you pay for them, 30c each, but they will give you leftover cardboard boxes for free. Most people choose the boxes.

    But if stores want to offer free bags, why prevent them from doing so? I like my free bags and reuse them.

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