Towards Reuse: The Implications of Price Incentives and Convenience of Reusable Packaging

Problem Definition: Growing environmental awareness is prompting consumers to consider reusable alternatives to disposable packaging, driving firms in the takeaway food and beverage sector to explore reusable packaging models. In addition to encouraging consumers to use their personal reusable packaging, some firms now offer firm-owned reusable packaging as an alternative reuse option. This paper examines how price incentives and convenience enhancements shape consumers’ packaging choices and the resulting environmental and profitability implications of reusable packaging models.

Methodology/Results: Using a game-theoretical model, we analyze a firm’s pricing and reuse-program decisions when consumers choose among disposable packaging, consumer-owned reusable packaging, and firm-owned reusable packaging. Our key findings are as follows. First, a more eco-conscious market does not necessarily strengthen the firm’s incentive to introduce a firm-owned reusable packaging program. When disposable packaging is inexpensive, the program’s main value lies in price discrimination rather than market expansion; as the market becomes more eco-conscious, this price-discrimination benefit weakens. Second, when disposable packaging is costly, the introduction of firm-owned reusable packaging can increase packaging waste, as the firm may strategically reduce the price discount for consumer-owned reuse. Finally, convenience improvements have asymmetric effects. Improving the convenience of consumer-owned reuse generally reduces packaging waste. However, making the return process more convenient for firm-owned reuse can increase packaging waste by shifting some consumers from consumer-owned to firm-owned reuse, which remains subject to non-return risk.

Managerial Implications: Firms in the takeaway food and beverage sector should jointly manage firm-owned and consumer-owned reusable packaging. Price incentives and convenience design should be evaluated based on how they shift consumers across packaging options and affect the tension between firm profitability and packaging-waste reduction.