Scrap Recycling Compliance Blog

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5 Ways to Protect Your Scrap Yard After the 2014 Michigan Scrap Laws Take Effect

5 Ways to Protect Your Scrap Yard After the 2014 Michigan Scrap Laws Take Effect

new michigan scrap lawIn my humble scrap opinion, while the legislators of Michigan's new HOUSE BILL 4593 are commended for even caring enough to get involved in scrap metal theft, their efforts in Michigan have proven once again to favor the mega scrap yards and penalize the small operators while not stopping or slowing down metal theft at all. 

The new Michigan scrap metal laws are presenting themselves as quite a challenge for all sizes of recycling centers throughout the state.

Read more about Michigan's new law

The toughest part of the new law is that scrap dealers cannot pay more than $25 in cash on the spot unless; 

A. The seller can redeem their scrap ticket using a atm type card or encrypted receipt at a ATM machine located on premise.

(Not quite sure how this is different from handing the cash to the customer, it forces the scrap yard to spend $15,000-$30,000, but does not stop theft, nor does it stop the seller from getting instant cash, it only penalizes the smaller operations who cannot afford to buy an ATM machine. In my opinion a very poorly written bill, again.)

B. Bank or wire transfer the money to the seller.

C. Can pay for the metal by writing a check or mailing the check.

(Again, poorly written as most yards will simply cash the check onsite or nearby so the seller still gets cash. Not really solving any theft of metals.)

The new record keeping laws require the second hand scrap dealer to keep electronic records with images of the materials,  the customer, a fingerprint and signature.

Its the intent of the law that the state will start using an electronic database so that scrap dealers can report all daily transactions (minus the $ amount paid) by noon the next day.

At the end of the day, the large milti-million scrap yards can afford to comply and pay endless amount of cash while the smaller mom & pop scrap yards will be forced to go into debt or close their yards.

I estimate that this law can cost a yard between $30,000 to $75,000 to comply with this new state law and does little to nothing to stop metal theft. 

Here are 5 Ways to protect your scrap yard in Michigan

  1. Start using a state compliant software that integrates all the images required.
  2. Purchase an ATM machine so the yard can pay all the customers in cash.
  3. Make sure your new software provider has a solid and reliable support plan for the new hardware.
  4. Create new signs explaining the new HOUSE BILL so customers will understand its not you making their life difficult.
  5. Fully comply with the new bill so detectives will stay away from your yard and not drive customers away.
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