The entire plastics value chain is currently looking for new processes to produce
high-quality recyclates. One measure is to add relevant product-specific information that can be retrieved during the sorting process. Digital watermarks are currently being discussed for this purpose. However, the basics of this technology are currently only known to a limited extent in the recycling industry. This paper first gives a brief overview of the theory and principles of digital watermarking. Next, the characteristics of watermarks are presented to improve the understanding of the strengths and limitations of this technology. Finally, the encoding process on physical products and the decoding process in sensor-based sorting are highlighted