For decades, if not for centuries, collection of end-of-use products was performed by scavengers, especially if these products could be reused or if there was value to be recovered. Nowadays, most societies in their effort to increase availability of natural resources and avoid landfills have displaced scavengers by formal waste collection systems. However, scavenging still exists, mainly in case of collection capacity shortages or low standard of living. While the participation of scavengers in waste collection systems has a social dimension, economical and environmental dimensions are also important. Informal recycling of waste electrical and electronic equipment by scavengers not only constrains profits of the formal system. In their effort to recover the value of used products scavengers also pollute the environment. In this paper we develop a system dynamics model to study the impact of scavenging on the operations of the formal recovery system of waste electrical and electronic equipment. We consider three different regulatory measures; a legislation that ignores scavengers though they participate, a legislation setting barriers to the participation of scavengers and a legislation that incorporates them into the formal waste management system. We use data from a real world closed-loop supply chain that operates in Greece. Extended numerical experimentation investigates the impact of the three different regulatory measures on economical, environmental and social sustainability. The results show that a legislation that incorporates scavengers into the formal waste management system is beneficial for all aspects of sustainability.