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Recyclebank Pays Homeowners to recycle

Written by Fox Business
Published: September 3, 2008

By Donna Fuscaldo

New York--Being green can give you more greenbacks, at least in the form of reward points.

Philadelphia-based Recyclebank has been launching programs across the country that rewards homeowners when they recycle their trash.

Marrying high-tech radio-frequency identification chips with low-tech recycling bins, Recyclebank tracks how much a home recycles and gives back reward points that can be redeemed at a slew of retailers including Bed Bath & Beyond (BBBY: 24.48, -1.46, -5.63%), CVS (CVS: 26.11, -0.04, -0.15%) and Dick's Sporting Goods (DKS: 11.24, -0.15, -1.32%).

Recyclebank is the brainchild of co-founder and Chief Executive Ron Gonen, a former Deloitte consultant who went back to school to merge his business know-how with his passion for social policy and the environment. The result: Recycle Bank, which has venture capitalists Kliener Perkins Caufield & Byers, RRE Ventures and Sigma Partners as backers.

"We want to be in a million homes," said Gonen of Recyclebank, which partners with municipalities and private trash haulers to encourage recycling. "Right now we have about 150,000 homes, which is about half a million people." The program is available in Connecticut, Delaware, Massachusetts, Nebraska, New Jersey, New York, Pennsylvania, Virginia and Vermont.

Recyclebank outfits the local trash-removal service providers with recycling bins that have semiconductors embedded in them that track how much waste is being recycled. The garbage trucks, which are retrofitted with a mechanical arm, read the recycled trash by weight, and that is translated into reward points. Homeowners log on to the Recyclebank's Web site to redeem the points and to see how many trees or oil their recycling efforts saved.

"Just like a bank statement, you can see each week how much you've recycled and how many points you've earned," said Gonen. On average, two weeks' worth of recycling can get you $10 off in a supermarket, while a month of recycling can get you two free movie tickets. Recyclebank takes the garbage to one of its partner recycling facilities, meaning less trash makes it to a city's landfill.

Gonen said Recyclebank saves Wilmington, Del.s $1.5 million a year. The company makes money from advertisements on its Web site and by sharing in the revenue the city gets from diverting waste from the landfill. In August, Recyclebank along with AAA recycling and Trash Removal Services of Fairfax, Va., announced that since the program was launched in Fairfax eight weeks prior, AAA saw a 90% increase in recycling among its customers. The company attributed the increase to the rewards points as well as larger bins for recycling.

"Recycled stuff is gaining value as a commodity," said Sarah Beatty, founder of Green Depot, the green building products retailer and a participant in Recyclebank. "Consumers are showing that people want to buy things that are greener." Beatty said Recyclebank is not only effective because it motivates consumers to recycle, but also because it shows how easy it is for people to change their behavior.

"Being able to go on a Web site and redeem points...is a pretty compelling value proposition," said Beatty, noting that the ability to track how much is recycled via the Web could result in more recycling.

But Recyclebank isn't only about working with homeowners. The company has Recyclebank kiosks that can be placed in apartment buildings and college dorms. Applying the same concept, a person would swipe a Recyclebank card to record the weight of the recycled material. The amount recycled is translated into rewards that can be redeemed on the Web site.

While Recyclebank is doing good for the planet by encouraging recycling, it's also a viable business model, said Stuart Ellman, managing partner at VC firm RRE Ventures, which invested in Recyclebank.

"Ron Gonen has found something really unusual," said Ellman. "People all along the chain create value." Ellman said that the recycling rate within communities that participate in the Recyclebank program go from 3% to between 33% and 35%. "Not only are people are getting paid but the community recycling rates goes up tremendously," said Ellman, who also sits on the board. "It's good for people and good for companies."

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Recyclebank At A Glance

Headquarters
New York

Offices
New York, Philadelphia and Houston

CEO
Javier Flaim

Founded
2004

Investors
The Coca-Cola Company, Craton Equity Partners, Generation Investment Management, Kleiner Perkins Caufield & Byers, Paul Capital Investments, Physic Ventures, RRE Ventures LLC, Sigma Partners, Waste Management Inc., and Westly Group

Members
4 Million+

Communities
300+ in all 50 states

Reward Partners
4,000+

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