STUDY: EFFICIENT BAGGING COULD CUT EXPENSES 25%

DEENA AMATO-McCOY

Ecobag supply professional and honest service.

NEW YORK -- A study examining cost issues related to supermarket bagging operations shows that by increasing the items packed into paper and plastic bags, supermarkets could save up to 25% annually.

Ten independent ShopRite stores, divisions of Wakefern Food Corp., Elizabeth, N.J., participated in the study that examined 5,000 bag transactions over a six-week period.

The study revealed that a typical supermarket spends $113,400 each year for regular paper bags, including expenses related to labor, storage and transportation of the bags. That cost could be reduced by $29,500 by packing 12 items in a paper bag rather than the average 6.3 units, according to the study, sponsored by the American Forest and Paper Association, Washington.

John Schellinck, vice president of engineering, retail and corporate for Wakefern, said, "Survey results will be made available to Wakefern members to review bagging operation costs within their stores."

The study, conducted by Willard Bishop Consulting, Barrington, Ill., and released last month, also identified savings potential for plastic bag costs.

Annual costs for plastic bags, which are about $87,300 per store on average, could be reduced by $21,500 if eight items are placed in each bag rather than the average 3.8 items, according to the survey.

Another way for supermarkets to cut bag costs is to offer a paper bag reuse program. Results indicate that supermarkets can save approximately 4.4 cents per paper bag based on labor and bag costs if shoppers return their bags.

The study shows that the cost of a regular paper bag is 8.25 cents, an expense that is increased to 13.38 cents when staff double up on paper bags.

"If a supermarket offers a rebate to the customer for returning the paper bags for reuse, additional revenue will be earned that could be used to offset expenses at the front end," said Paul Weitzel, senior associate for Willard Bishop Consulting.

Weitzel explained that if a 100-store chain offers consumers a 2-cent rebate per bag, and the store gets 10% of shoppers to participate, approximately $337,500 could be saved per year chainwide.

Among the 600 Wakefern shoppers surveyed about bag reuse, 35% said they would participate if they received a rebate of up to 4 cents per bag.

Though 51% of consumers said they would prefer a 5-cent rebate to participate in a reuse program, "calculations show that offering a rebate of more than 4.4 cents would incur more costs, rather than reduce them," Weitzel told SN. "Any refunds over 4.4 cents are more expensive than the cost of a new bag."

The study also shows that changing the strength of bags rather than doubling bags when packing items can further reduce costs for supermarkets.

On average, stores whose staff double plastic bags are spending $158,200 annually, including bag purchase and labor. Doubling paper bags accrues annual costs of $194,600, and paper bags inside plastic bags add up to $152,200 annually, according to the study.

The more durable plastic bags cost $92,400 annually per store but can save in labor and materials because the staff will no longer have to double bag.

Stores that want to provide their customers with the stability of paper sacks can consider using paper bags with handles. This option will cost stores $149,000 annually, while eliminating costs incurred by doubling paper sacks into plastic bags for the convenience of handles, according to the study.

Hey there, @hbrough - 

Thank you for posting in the Community! This is a great question. Unfortunately, this would be a Feature Request for the Online Store.

Normally, in the regular Point of Sale, you would be able to set up a charge like that. In the Online Store, it only allows taxes to be set up - not other surcharges. 

I am going tag this for our Product Team and I appreciate the time you took to reach out. 

Are you interested in learning more about Custom Frosted Zipper Bags? Contact us today to secure an expert consultation!

Kassi
Community Moderator, Square
Sign in and click Mark as Best Answer if my reply answers your question.

This has been a 'thing' for DC since - $0.05 per bag used for carry-out - so I'm surprised there isn't a thread regarding a solution (or I just don't know the right keywords to use to find an answer.)

As a temporary workaround, we created a "Bag Fee" item, which we also use at our point-of-sale if the customer chooses to have a bag.  But, for Online, I wish I could automatically add that item to every order (the customer can delete it or we can give them their nickel back at the truck if they end up bringing their own bag).  

Is there a way to at least do that?  Include an Item in every Order?

p.s.

@Joe & @Kassi_ - if your developers want to see the nuances of the DC bag fee, there is a document on the DC Dept of Energy & Environment website (https://doee.dc.gov/page/bag-law-faqs) 

Is there a solution to add a bag fee? I only need it for POS. I do not want to make an item because I do not want it to count as part of my sales. It is not revenue. It is a tax I must remit to the city. I can only add a tax percentage, not a dollar amount. I need to be able to add a flat fee in any quantity.

If there is no solution, it is something Square needs to really prioritize. Bag fees are becoming very prevalent and they need to be separated from sales because they are a government tax.

Thank you

Thanks for another post @GLG!!

To note: Surcharge rules vary by state, regulatory, or card network rules. I recommend following up with a tax professional or your local government for further guidance on whether surcharges are permitted in your area.

With that said, the best way to add a dollar surcharge amount is to create an item named surcharge and price it how you wish. If the amount varies by transaction, it's best to leave the price blank on when creating the surcharge item, then enter the amount at the time of sale. 

I hope this helps. 

Justin
Community Moderator, Square
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This is a bit of a challenge for all of us as the rules for these fees and amounts are unique for each State - for us it's no more plastic, just either disposable paper which we have to charge $.10 each and report and note, the bag is required to contain at a minimum 40% post-consumer recycled content, else it can't be used.  Seems creating a line item for the disposable paper bag is quick fix but, probably not a solution that would work for all.  Depending on your State's rules, you may or may not be exempt from sales tax and regardless, the amount is still included in your credit card processing fees.  Here in CO, in particular our county, we have to report the total number of disposable paper bags sold and file the amount just the same as we file our sales taxes - yep, quite a pain.  We are permitted to keep a certain amount (50% of the total up to $100 a month).  Note, this only applies to retail businesses - if you're a restaurant, you're exempt from this process - yet, we can use the exact same bag that the restaurants provide and we (retail people) are stuck with the reporting and paperwork.  It's simply not worth the effort as when all the accounting is done - there's no profit for our time what so ever.  Our solution for this challenge is to simply not provide any disposable paper bags at all - the town gave us a waver from the reporting process and we were able to move on - we simply posted signage to encourage customers to use their own reusable bags.  With all the different rules out there, not sure Square can ever come up with a solution that would work for all.  Just some thoughts from our experience.

JK

This is off topic as far as Square help goes but in Denver it doesn't matter if you use paper or plastic, the fees and reporting process are the same.(Not sure why everyone is calling it a paper bag fee when it's just a bag fee.) My store spends a lot of money on paper bags made from recycled materials. I could use plastic bags for less than a penny a piece but I'm doing the right thing. I should be rewarded for the money I spend to be sustainable. I'm going to write a letter with this idea. As of now, because Square can't support our needs, I haven't collected a dime from any customer. Now I have to pay out of pocket this quarter. It's a simple fix for Square too. I was told the free version has the ability to apply the bag fee, which is BS because it's free. You want that feature? You need to pay for a subscription. Why subscribers don't get features is beyond me. I'm looking into a new system for .

I can't believe this feature STILL doesn't exist. Its' one of the most requested, complained about, and necessary features. (You said, "some people" are requesting. It's not "some." It's the majority of people who own a physical shop. Every city in starting to implement these fees/taxes. It can't be that hard to add to the POS interface. We add discounts, why can't we add a fee/tax for bags. (Multiple being the operative word here because it's a fee/tax per bag.)

Adding the fee/tax as an item is not an acceptable solution because the fee/tax shows up as revenue, which it is not. It is a tax. Counting tax as revenue is not only illegal, it messes up book keeping. Come on Square. This is what we pay you for. I am endlessly frustrated that this feature has been requested (nay, demanded) for years. Instead, the inventory page has been updated so the text, text boxes, and space between everything is unnecessarily large. What was the point of that update?

Please add an option to add a bag fee at POS checkout. You're making this very hard and frustrating for all of us. 

Thank you for the clarification regarding Square for Retail. This is also the case for Square for Restaurant users. Our developers work on features based on the demand of it and how important it is to our Sellers a particular missing piece of functionality. In this case, this was a top requested feature by Square Point of Sale users and only after it was released then Sellers using other apps figured they would like to have it.  The team working on this feature is currently working to bring it to other platforms (again based on demand).

Right now this feature is only available on Square Point of Sale, Square Invoices, and Square Online. This means that Square for Restaurants, Square for Retail and Virtual Terminal are still expecting this feature to be released. This being said we are not ignoring our Plus or Premium Sellers as we are working to improve the offerings and experiences for them as well. 

Lastly, I want to thank you for your patience while Service Charges are implemented for Square for Retail. 

JJ
Community Moderator, Square
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