How Businesses Can Prepare for the Plastic Checkout Bag Ban

Phase 2 of the Plastic Pollution Reduction Act goes into effect January 1, 2024, and has three components:

  • Large Colorado retailers are prohibited from distributing plastic checkout bags. Retailers are allowed to use up remaining inventory of plastic checkout bags after January 1, 2024, until supplies are depleted or until June 1, 2024. Retailers must charge the $0.10 fee on any plastic bags distributed through June.
  • Large Colorado retailers are required to keep charging a minimum $0.10 fee per paper checkout bag.
  • Retail food establishments are prohibited from distributing polystyrene foam (commonly referred to as Styrofoam®) food and beverage containers. However, retail food establishments may continue to use up any remaining inventory of polystyrene food and beverage containers they possess after January 1, 2024. New polystyrene food and beverage containers should not be purchased after January 1, 2024.

A Step-by-Step Guide for Retailers to Implement the Plastic Bag Ban and Paper Bag Fee

Use this guide for implementation of the plastic bag ban and paper bag fee. For more information on implementation of the polystyrene foam ban, refer to this page.

Step 1: Determine if your business is exempt from the plastic checkout bag ban

Determine if your business is exempt from participating in the plastic bag ban (and minimum $0.10 bag fee) using the chart below. 

Exempt retailers that are not prohibited from distributing plastic checkout bags and not required to charge a minimum $0.10 paper checkout bag fee include:

  • “Small” stores (the law defines small stores as those with three or fewer locations operating solely in Colorado, and are not part of a franchise, corporation, or partnership that has physical locations outside of Colorado)
  • Farmers markets and roadside stand vendors that qualify for the small business exemption (three or fewer locations operating solely in Colorado)
  • Restaurants (all restaurants are exempt, regardless of number of locations) 

Exempt stores may choose to charge the $0.10 bag fee and keep 100% of fees collected unless the municipality or county to which the store pays taxes has adopted an ordinance allowing the store to opt in to the bag fee program. The store may have to pay tax on fees collected.

Nonexempt retailers that are prohibited* from distributing plastic checkout bags and are required to charge a minimum $0.10 paper bag fee include: 

  • Grocery stores, supermarkets, convenience stores, liquor stores, pharmacies or drug stores, or other retailers with more than three locations in Colorado OR with one or more locations outside of Colorado.

* Nonexempt stores are required to charge at minimum a  $0.10 bag fee on paper checkout bags, of which retailers may keep 40% of fees collected and remit 60% of fees collected. Local ordinance may require a fee on paper bags greater than $0.10.

Which bags are included in the plastic checkout bag ban?

Only plastic checkout bags are prohibited from distribution at large retail stores effective January 1, 2024. 

Which bags are included in the bag fee?

  • Paper checkout bags are included in the $0.10 bag fee. Single-use checkout bags provided through curbside pickup at the store are also subject to the fee. 
  • Paper checkout bags used by customers who participate in state or federal food assistance programs are not subject to the fee (these customers are EXEMPT from the fee).

Which bags are NOT included in the plastic checkout bag ban or the paper checkout bag fee?

All retailers are allowed to distribute the following types of bags at no fee to the customer:

  • Produce bags, and bags used for food that could contaminate other items, such as frozen food, meat, seafood, etc.
  • Bags for loose, bulk items including hardware, nuts, fruits, vegetables, grains
  • Bags for unwrapped food such as bakery goods 
  • Bags for dry cleaning, laundry, or garments
  • Bags used for prescription medication
  • Bags for the sale of small pets like fish, crustaceans, mollusks, and insects
  • Bags used by restaurants for food delivery or take-out.

Step 2: If not already established, set up a fee collection system for the continued paper bag fee

Adjust your registers to track and charge for each paper checkout bag provided at checkout, as follows: 

  • Customer receipts must include the number of paper bags provided and the total amount of fees charged. 
  • Be sure that your system records the number of paper checkout bags provided to customers.

Step 3: Alert your customers

  • Post signs reminding customers to bring their own bags. The new state law requires businesses to conspicuously display a sign in a location inside or outside of the store to alert customers of the plastic bag ban and $0.10 minimum fee on paper checkout bags. Good locations for signage include the parking lot, on store doors, on shelves throughout the store, at checkout, at self-checkout lanes, on grocery cart advertising space (if available), and in the cart corral area.

If your municipality is not providing free store signage, see below for free downloadable posters and signage.

  • Posters: in sizes 24″ x 36″, 11″ x 17″, and 8.5″ x 11″
  • Checkout lane signage
  • Provide plastic bag ban and paper bag fee information to customers through print and digital communications, such as weekly coupon mailers, on your store website, or in your store app.
  • Make daily in-store announcements, including thanking customers for bringing their own bags.
  • Remember, recipients of federal or state food assistance—such as EBT, SNAP, or WIC—DO NOT have to pay the paper bag fee.

Step 4: Educate your employees and customers

Train employees, including managers, cashiers, baggers, staff in charge of online order fulfillment, and customer service representatives, on the requirements of the new plastic checkout bag ban and $0.10 minimum paper bag fee using these free, downloadable resources:

  • Provide managers and cashiers with the Bag Ban/Fee Training Sheet and hang it in the employee-only areas of the store.
  • Provide cashier reminder cards describing how to explain the plastic checkout bag ban and minimum $0.10 paper checkout bag fee to customers if asked.
  • Keep customer information cards at each cashier station for customers who request more information.
  • Designate a bag ban/fee expert and employee trainer on your team to handle questions and train new cashiers and baggers as needed.
  • Acknowledge employees who consistently make the effort to thank customers for bringing their own bags.

Step 5: Make reusable bags accessible near checkout

  • If you are providing free reusable bags to customers (can be funded by retailer’s portion of paper bag fees collected), ensure bags are well stocked at each register.
  • Place reusable bags for purchase near checkout lanes, including self-checkout stations.

Step 6: Remit 60% of fees collected to your municipality (or county) 

  • Remit the appropriate fees (60% of paper checkout bag fees collected) to your municipality or county quarterly. Use this Bag Fee Remittance Form, or the form provided by your municipality (or county).
  • If your business has not yet remitted your bag fee funds, the first payment should include the funds collected since January 1, 2023. 
  • If the municipality or county in which your business is located hasn’t established a process to accept the remitted fees from businesses, businesses shall retain the full fee and use it for the original purposes set out in HB21-1162, which include any recycling, composting, or other waste diversion programs and related outreach and education activities, and/or the purchase of reusable bags for your customers.