Michigan spends millions of dollars every year to return deposits on bottles and cans brought in from border states that don't pay back the deposits. The 'can scam' was even the inspiration for a well-known episode of the sitcom Seinfeld.

"Ten cents!" the Newman character exclaims. "Wait a minute, you mean you get 5 cents here and 10 cents there — you could round up bottles here and run 'em out to Michigan?"

"No," interrupts Kramer, "it doesn't work."

But unfortunately for Michigan, it does work. The state charges a 10 cent deposit on cans and bottles to encourage recycling. Many people collect cans from Ohio or Indiana, where there's no deposit, then drive them to stores in Michigan for refunds of money they never paid. The stores hand the bill to their beer and pop distributors, who have to pay any excess refunds. Distributor Greg O'Neal says it's getting worse every year.

"Right now, end of November, I've lost close to $140,000 of unclaimed deposits," O'Neal says.

O'Neal was so concerned about losses at a particular store that he hired a private investigator. Turns out, 65 percent of the cars and trucks in the store's parking lot had Indiana license plates crammed with Indiana cans and bottles.

Many stores near the border are trying to prevent the fraud.

In the back of the Foodtown Supermarket in Lambertville, Mich., not far from Ohio, are six reverse vending machines. They look a lot like regular vending machines, only you put the empty bottle in and get a receipt back for the deposit.

"We don't let anybody with a big, closed, black bag into the store," Assistant Manager Isaac Shikwana says. "They have to empty 'em out into a cart. We try to spot check."

Still, it's a big store and the workers can't keep an eye on everyone. The biggest losses happen when the store owners are the scammers. The state has uncovered multimillion dollar conspiracies between Michigan store owners and Ohio and Indiana recycling centers splitting the profit.

Some say it's time to dump the deposit law altogether. Mark Katafias supervises Foodtown stores in Ohio and Michigan. He says health inspections are a nightmare, and the state has to spend money for law enforcement investigations. Katafias says Ohio roadsides are no more littered than the ones in Michigan and thinks people already understand recycling.

"I think we're kind of looking at the consumers in Michigan and saying, 'The only way we can keep you from throwing trash on the roadside is by charging you a 10 cent deposit,' " Katafias says. "I think that's kind of an insult to the intelligence of the average person out there today."

But Michigan seems intent on troubleshooting its current system. Bills are moving swiftly through the lame-duck Legislature to require new proprietary ink stamps on Michigan beverage containers. Meanwhile, other states that charge deposits are in the same fix and are closely watching Michigan's efforts to curb the can scammers.

Tracy Samilton reports for Michigan Radio.