Turns out, it’s the dates on food expiration labels that are bad. A lack of regulation of food labels is a major factor leading to 40% of all food going to waste in the U.S., a new study finds.

Over 90% of Americans may be prematurely tossing food because they misinterpret expiration dates, according to the study by Harvard Law School’s Food Law and Policy Clinic and the Natural Resources Defense Council, a non-profit environmental action group. Phrases like “sell by,” “use by,” and “best before” are poorly regulated and often misinterpreted, the report found: “It is time for a well-intended but wildly ineffective food date labeling system to get a makeover.”

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Faulty expiration-date rules are confusing at best, says Dana Gunders, a NRDC staff scientist with the food and agriculture program. “Sell by” dates are actually for stores to know how much shelf life products have they are not meant for consumers or to indicate the food is bad. “Best before” and “use by” dates are for consumers, but they are manufacturers’ estimates as to when food has reached its peak.

Wasted food is a big problem in the U.S. An estimated $900 million worth of expired food is removed from the supply chain every year, the report found. And although not all of this is due to confusion over food expiration labels, Gunders says a casual survey of grocery store workers found that even employees are not always trained to distinguish between different kinds of expiration dates. (The National Grocers Association, the national trade association representing the retail and wholesale grocers, was not immediately available for comment.)

All the wasted food adds up: As much as 40% of food goes uneaten in the U.S., according to estimates from the Department of Agriculture and the Environmental Protection Agency. Americans are, in other words, throwing out the equivalent of $165 billion in wasted food every year, a separate analysis by the NRDC found. In fact, one study estimates, just 15% of all this wasted food would be enough to feed more than 25 million Americans every year. And one in six Americans currently lacks a secure supply of food, Gunders says.

Grocery bills are the biggest household expense. The average American family of four spends $632 to $1,252 per month on grocery bills, according to a recent Department of Agriculture “Cost of Food” survey. But there are ways to keep track of wasted food. Composting, for example, forces people to actually see how much food they’re throwing away and how much money they’re wasting, says Andrew Shakman, president of LeanPath, a Portland-based company that tracks food waste in industrial kitchens. LeanPath helped cut food waste at the University of California, Berkeley, campus by 43%. A miscommunication among food service workers also leads to fresh prepared food like sandwiches and salads being dumped before they should be. “I’ve seen that,” Shakman says.

Some 160 billion pounds of wasted food also clogs up landfills, according to the Harvard Law School and NRDC study. Earlier this year, New York Mayor Michael Bloomberg unveiled a plan to require residents to separate their food waste for collection. Organic waste in New York City — which could otherwise be recycled for fertilizer or natural gas — currently accounts for 1.2 million tons or 35% of landfills, and a pilot program on Staten Island achieved a participation rate of 43%, according to the mayor’s office. Last year, Vermont introduced a bill to require residents to recycle their food waste by 2020 — and 33% of the organic waste in that state already gets composted.

Aside from the environmental advantages, composting may also be a boon for pocketbooks. Throwing out separate bags filled only with uneaten food could work as a big wake-up call for consumers, experts say. “We have a tendency to overbuy and overcook,” says Phil Lempert, CEO of grocery information site SupermarketGuru.com. “Awareness of how much food you’re wasting does help people buy properly. As prices go up, people also become more aware.” And consumers today have every reason to be more judicious in the grocery store. The price of food purchased for consumption at home is expected to rise 2.5% to 3.5% in 2013, according to the U.S. Department of Agriculture.

There are, of course, easier ways to cut one’s supermarket bill than composting. Consumers can waste less food by bringing a calculator to the store, making a note of when food goes bad, cooking only what they need and eating their leftovers, experts say. iPhone apps like Green Egg Shopper ($3.99) and Food Storage & Shelf Life ($1.99) can help keep track of perishables. But better education and clearer food expiration labels would go a long way to reducing food waste. “It’s widely understood that food labels are a point of confusion,” Shakman says. “It’s a big problem.”