INTRODUCTION--What are Trading Stamps anyway?
Trading stamps, paper coupons with a gummed backing, cut into perforated squares and usually with a unique, colorful design and some serial numbers printed on them, are a marketing tool that dates back more than 100 years. They were issued to merchants in the late-19th and early 20th centuries, who would hand them out to customers as an incentive for paying cash as opposed to credit, and to keep them coming back. The customer pasted them (the old lick-and-stick method) into booklets given out by the company that issued the stamps, filling the booklets up and eventually exchanging a specified number of filled booklets for merchandise -- household goods, furniture, jewelry, toys, sporting goods, tools, you name it.
A department store in Milwaukee introduced the first trading stamps back in 1891, which were exchanged for goods in the store but in 1896, the Sperry and Hutchinson Company, which began issuing S&H Green Stamps that year, was the first trading stamp company that operated as an independent business, providing stamps to different types of merchants in a community, along with booklets to paste them in, and opening their own stores where merchandise was purchased only in exchange for the company's stamps. Cold, hard cash wasn't accepted at the stores known as "redemption centers."
An entire history was quickly spawned from the concept that S&H innovated, reaping billions of dollars by the mid-20th Century. Stores, service stations and other businesses were handing out stamps of all colors to customers, with names like Gold Bond, Gift House, Triple-S, Plaid Stamps, King Korn, Blue Chip, Top Value and many others. But the green and red S&H sign was displayed by more stores and gas stations than any other. They were the only nation-wide stamp plan, while the others were mostly regional.
Trading stamp systems worked this way: the stamp company would sell large pads or reels of stamps to a retailer for a miniscule fee. Each stamp had a cash value of about one mill (one-tenth of a cent) and one stamp would be handed out to customers for every ten cents spent.
The customer would paste the stamps into the provided booklets, keep coming back to the store or other retailers who carried that brand of stamps, and eventually filled enough booklets with stamps to exchange for whatever goodies he or she wanted at the redemption center set up by the company. In the meantime the customer could pick up a catalog with color illustrations of available items and the number of booklets required.
Trading stamps still exist but they have all but disappeared from the American retail scene. The American public seemed to love the little sticky coupons, but they were controversial from their inception, stirring up the ire of some retailers, economists and state legislatures. They were described by one anti-stamp lobbyist as "prostitution at their best and economic insanity at their worst." Dozens of states introduced bills to penalize stamps in one way or another, banning them outright or imposing prohibitive taxes. Such legislative proposals were often protested by the public and ultimately defeated but when they did pass, the stamp companies, with all their economic clout, sued, often all the way to the Supreme Court.
There were questions as to whether stamps were an advantage to consumers or took advantage of consumers. The battles raged from the earliest days but ultimately it would not be politics or lobbying that would bring down the industry but the unforeseen turbulence of a changing economy. One thing was for sure, though, the trading stamp concept is something uniquely American.
With the success of the Greenpoints system, the Sperry & Hutchinson Company has been slowly phasing out paper stamps. The last supermarket to give them, a Piggly Wiggly store in Columbia, Tennessee, finally gave up S&H Green Stamps in February, 2003, leaving only a few truck stops, gas stations an small specialty stores still giving out the stamps.
For the most part trading stamps have been relegated to warm, fuzzy nostalgia, a mere footnote in history but they were a far bigger factor in American culture, marketing, the economy and even politics than most likely realize.
With the outbreak of World War I, the stamp craze faded. The A&P stopped giving S&H Green Stamps and many more stamp companies folded. But in spite of severing ties with the largest grocery chain in the country, the Sperry & Hutchinson Company survived with an alliance of small, independent retailers, mostly grocery and department stores, in pockets throughout the US. They also expanded through acquisitions. Around 1906 they bought the Minneapolis Trading Stamp Company of Minneapolis and in the twenties they purchased the Legal Stamp Company of Boston and the United States Stamp Company of Toledo, and, recognizing early the benefits of diversification, entered the hotel supply business by merging with Nathan Straus & Sons.
The rapid growth did not go unnoticed by one of the company's original investors, Shelly B. Hutchinson. Hutchinson had sold his interest to partner Thomas Sperry's brother, William, in 1904 but in 1915 filed suit in federal court seeking $6 million, alleging he had actually been ousted from the company. The lawsuit was dismissed but a persistent Mr. Hutchinson appealed all the way to the US Supreme Court, which also ruled against him. In 1923, the Beinecke family of New York bought the company from Sperry's heirs after two of Sperry's daughters had married into the family. It was under the leadership of Edwin J. Beinecke that S&H survived the lean years of the twenties, thirties and forties.
When the company's creditors insisted that the store be closed so remaining goods wouldn't go to the stamp holders to the exclusion of the creditors, the women attempted to force their way in. "At this the crowd formed sort of a flying wedge and prepared to carry the door," reported the Times. Police were called to disperse what turned into a near-riot. "By night almost everything but the pieces of furniture too big to carry had been taken away."
Stamps were indeed valuable, being currency unto themselves, and when something like that becomes so incredibly popular, there are always the unscrupulous ones willing to cash in on it. In addition to the carpetbagging stamp companies, legitimate companies such as Sperry & Hutchinson had problems with "scalpers," crooks buying up the stamps and selling them at a discount to retailers who were under contract with the company to carry them. The stamp companies also learned early on that redeemed stamps had to be carefully destroyed as quickly as possible. If they were simply thrown in the trash, there would always be someone willing to dig them up and re-redeem them, which would quickly bring the stamp company to financial ruin.
Trading stamps were controversial from the beginning, opposed by retail trade associations, labor unions, politicians and some merchants. Most outspoken against the stamp industry were the trade associations. Merchants had to buy the stamps from the stamp companies to participate in the programs. If every merchant in a community gave stamps, the associations contended, it would be counter-productive to any competitive benefits and ultimately, the only beneficiaries would be the stamp companies themselves.
The anti-stamp lobby attempted to sway public opinion by pointing out it wasn't a "something for nothing" deal. The money retailers paid into the stamp plans had to come from somewhere, most likely in the form of higher prices to the customers, so they weren't really "saving" anything. Legislatures in dozens of states attempted to pass laws either banning trading stamps or burdening them with punitive taxes that would ultimately force the stamp companies out of business. When stamps spread north of the border, the Canadian government banned them outright.
S&H Green Stamps catalog from 1930.
Blue Chip Stamps, strictly a California phenomenon, quickly became the most popular trading stamps
in that state.
An ARCO gas station in Los Angeles was still displaying S&H Green Stamps signs in April 1973. More than likely, the signs disappeared soon after this snapshot was taken.
S&H was struggling, although surviving but the other shoe fell in May, 1973. An oil embargo hit the nation, bringing gasoline shortages everywhere. Some dealers had no gas to sell and those who did had lines spanning blocks. Trading stamps, in addition to free road maps and windshield-washing attendants disappeared as customer incentives became unnecessary. S&H alone lost nearly a quarter of its entire stamp business overnight.
Jackson S. Smith of Sperry & Hutchinson told Forbes "This whole gasoline shortage thing wasn't in our plans...When it hit us in May we had just for the first time allocated part of our ad budget for weekend radio commercials aimed at the service station business. How do you like that for bad timing?"
The company began paying its sales people double commissions on service station business. If all else failed, they were to persuade dealers to cover up their S&H signs with a green garbage bag.
"It has a psychological advantage", Smith told Forbes. "When the gasoline shortage is over, they'll be ready customers." But the gasoline shortage wouldn't really abate until the next decade so most of the signs ended up coming down permanently.
There were also some unorthodox uses. A robber in Fresno reportedly held up a grocery store with S&H Green Stamps pasted on his face as a disguise. And in a student prank at Columbia University, a "Memorandum for Deans and Administrative Officers" appeared on a bulletin board, according to an article in the New York Times on November 22, 1962, stating "Columbia University will issue Plaid Stamps to students upon payment of fees." Students in droves asked about the stamp offer. The controller's office at the university ran the figures for such a scenerio. Said assistant controller William M. Leary, "As I understand it, Plaid Stamps amount to a 2-to-3 per cent discount. Tuition in 1961-62 was approximately $15,000,000. If we gave 2 per cent dividends, the trustees would have to appropriate money to cover the cost...Before we embarked on something like that, we'd have to find a quarter of a million dollars."
THE TRADING STAMP STORY
(or: When Trading Stamps Stuck)
©2000, 2013 by Jeff R. Lonto
King Korn took the biggest blow in August, 1965 when two of New York's leading supermarkets, Waldbaum's and Daitch-Shopwell, announced on the same day they were dropping the stamps. The two chains totaled 161 stores. "DAITCH-SHOPWELL REPEALS THE STAMP ACT," proclaimed a full-page newspaper ad. "THOUSANDS OF PRICES SLASHED!" Both chains ran loud, echoing radio spots all over the New York AM dial. It wasn't unusual for a chain to quietly drop a stamp plan at the end of a contract but to do so with so much fanfare was.
Meanwhile, hundreds descended upon the city's King Korn redemption centers to redeem stamps, fearful that the company was going out of business. At one store, police had to control a line that stretched 75 feet out the door. Customers were packed in the store, five deep at the counter. King Korn was in such decline four years later that the New York Attorney General requested that the company make a deposit with his office as a good faith that all outstanding stamp books would be redeemed.
When St. Louis-based Bettendorf stores ran a full-page newspaper ad with a "poll" asking "Do you want trading stamps, or do you want upper-class quality foods at stampless discount prices?" and then dropped S&H from its stores five days later, supposedly as a result of the "poll", S&H sued for breach of contract.
The trade associations further argued that in addition to adding to the overhead expenses of the retailer, the stamp companies were tyrants draining money from both consumer and merchant strictly for their own benefit. Whenever anti-stamp legislation was passed, however, the stamp companies sued on the grounds that it violated the companies' rights under the Fourteenth Amendment of the United States Constitution, which forbids states from enacting laws that abridge the privileges or immunities of U.S. citizens. The stamp interests argued that businesses were "citizens" too.
The courts generally sided with the stamp industry but the issue made it to the United States Supreme Court, which called trading stamps "an appeal to stupidity" and ruled on March 6, 1916 that the Fourteenth Amendment does not apply to businesses and that states do have the right to set limits on stamps and other premium programs.
Trading Stamp dispensers were installed near the cash registers of high-volume supermarkets and gas stations that gave stamps in the 1960s. Pictured are Roto-Stamp and Akra models.
An early two-page color ad for S&H Green Stamps, then known as "Sperry" Green Trading Stamps, from Century Magazine, March 1904.
In 1965, Daitch-Shopwell supermarkets "repealed the stamp act."
There was some renewed interest in stamps during the Great Depression. While S&H continued to expand, mostly in the eastern states, a seemingly fool-hearty 23-year-old in Minneapolis named Curt Carlson borrowed $50 in 1938, printed up his own stamps and convinced a few local merchants to give out what he called Gold Bond Stamps. The fifty-dollar loan eventually grew into a diversified enterprise now called Carlson Companies, still based in Minneapolis, with revenues reaching well into the billions.
But the industry was on a downward spiral. It saw its first decline in thirteen years in 1967. Companies such as S&H and Gold Bond began to diversify into other businesses. Discount stores such as Shopper's City, Target and Kmart, which began popping up on a large scale in the 1960s, competed directly with the stamp industry by aiming price-cutting efforts at the most popular redemption center items and offering in-store grocery departments without stamps.
The trend away from stamps continued into the 1970s as food prices skyrocketed with an unstable economy and shortages of certain items, causing consumer demand for lower prices and fewer frills. MacDonald Plaid stamps, which had been distributed primarily by A&P stores in the eastern US, virtually disappeared completely when the nation's largest grocery chain began its own discounting program, as did King Korn and numerous other stamp companies. Even Grand Union dropped its wholly-owned Triple-S stamps from most of its stores.
In Minneapolis during 1970, Gold Bond Stamps lost its biggest hometown account, Super Valu stores, and Gift House Stamps went out of business soon after being dropped by area National Tea Co. supermarkets. Red Owl stores, meanwhile, touted its continued alliance with S&H Green Stamps in newspaper ads, only to dump the stamps themselves one year later.
MacDonald Plaid Stamps given by Columbia University upon payment of fees?
THE FIFTIES: THE GOLDEN AGE OF STAMPS
The outbreak of World War II in the forties, which brought rationing and shortages that eliminated the practicality of giving away premiums, again seemed to signal the downfall of the stamp industry for good. But when the G Is came home, the economy was robust, demand for consumer goods was higher than ever and the nation was hungry for something new. The time was right to introduce a whole new geration to stamps. The breakthrough happened in a rather unlikely place.
In June, 1951, Denver-based King Soopers tested the waters by offering S&H Green Stamps in one of its grocery stores. S&H primed the pump by giving the chain financial and promotional help in taking on the plan. The response was overwhelming. By October, the entire King Soopers chain was giving S&H stamps.
Gold Bond, Gift House, Top Value and King Korn were among the many trading stamps competing with S&H in the 1950s.
Competing chains responded by offering other stamp plans. Stores such as Save-A-Nickel, Busley's and Piggly Wiggly got into the act. With almost everybody in Denver giving stamps, stores began to out-do each other by offering double stamps on certain days of the week, two instead of one for every dime spent.
Soon, the stores were giving double stamps every day and triple stamps on certain days. Then triple stamps all week long. When Save-A-Nickel began giving quadruple stamps, inflating the value of the stamps to about eight cents on the dollar, the five stamp companies doing business in the area stepped in and issued a joint statement that said merchants would be prohibited from giving more than one stamp per dime spent.
With the financial backing of Michigan businessman Shelly B. Hutchinson, the Sperry and Hutchinson Company was formed in 1896. The company began issuing what they called "S. & H." Green Trading Stamps (or "Sperry" Green Trading Stamps in the earliest years) to merchants in Jackson, and soon persuaded some New England dry goods dealers to take on the plan.
The following year, the first redemption center, or "premium parlor" as Mr. Sperry preferred to call it, was opened in Bridgeport, Connecticut. The small store had a variety of quality, name-brand merchandise. The idea caught on rapidly and by the turn of the century, the Green Trading Stamps were handed out by department stores, dry goods dealers and grocers throughout the East and Midwest. Even the A&P was giving out S&H stamps in some of its stores. By 1904, the company was boasting capital of $1 million. Soon other entrepreneurs jumped on the bandwagon, starting their own stamp companies.
Stores everywhere were giving out stamps of one color or another at the turn of the 20th Century. While many of the stamp companies were legitimate, others were unscrupulous, offering shoddy merchandise and in some cases, vanishing as soon as customers turned up to redeem the stamps.
Author Edward Shenton recalled a lamp his mother received in exchange for stamps in the March, 1958 Atlantic Monthly:
"It was an enormous apparatus, with a shade the shape and almost the size of St. Paul's Cathedral in London...It took her eighteen months and 37,000 stamps to acquire this objet d'art. Unfortunately, the workmanship was not comparable to St. Paul's. Fragments of stained glass began to fall out, leaving holes of undiluted electric light.
S&H Green Stamps--
Fun for the whole family.
Detail from a Benedict & MacFarlane Blue Trading Stamp book from the turn of the 20th Century.
"Look what my smart wife got Free for Top Value Stamps!"
S&H Green Stamps redemption store, pictured in the 1967 S&H Ideabook.
Stamps further saturated popular culture. Singer Andy Williams, entertainers Dinah Shore and Danny Kaye, and game show host Gene Rayburn advertised S&H Green Stamps on television. S&H also marketed to the younger generation, sponsoring Dick Clark's afternoon rock show, "Where the Action Is," and Andy Warhol turned the stamps into a work of art. A fictional brand of stamps was portrayed in a popular episode of the sitcom The Brady Bunch, and in a memorable episode of Sanford & Son, Redd Foxx (in the character of Fred Sanford) uses a boiled beef tongue to lick his Blue Chip stamps.
Midwest-based Thriftway stores invested in King Korn stamps, which had been founded by Chicago businessman Peter Volid in 1953. Grand Union, the New England chain that had given out redeemable tickets in its earliest days, began Triple-S (Stop & Save Stamps) in 1955 after giving S&H stamps in some of its stores and Kroger, in partnership with the Gold Bond Stamp Company, established Top Value stamps.
But some supermarket chains still resisted. Lingan Warren, president of Safeway, hated stamps with a passion. They nearly put him out of business in Denver where his company countered the stamp wars by cutting prices. Consequently, Safeway cut prices so low that while hanging on to their market share in Denver, profits declined sharply. Then the U. S. Justice Department slapped an anti-trust suit against Safeway, charging the chain with selling goods below cost.
Warren continued his fight against stamps, suing stamp companies and competitors who used them in Safeway's marketing areas on the grounds that the stamps themselves represented below-cost pricing. His legal staff drew up anti-stamp bills for presentation in state legislatures.
Red Owl was one of many supermarket chains to start giving S&H Green Stamps in the 1950s, while S&H was celebrating 60 years in business.
Ad from the March 1906 Ladies' Home Journal shows the interior of an early S&H Green Stamp redemption center.
Disposal of redeemed stamps posed other problems. Stamp companies learned from the very beginning that people were all too eager to snatch up and turn in stamps that were already redeemed, which could quickly put a company out of business. One stamp company official dumped weighted sacks of redeemed books into the sea, only to find divers following him and retrieving the sacks.
REPEALING THE STAMP ACT
Trading stamps were a multi-million dollar industry and S&H was on the top of the heap. But in 1965, the bottom started to fall out. Supermarkets discovered a new gimmick: giving up stamps and claiming lower prices in high-profile campaigns.
New Jersey-based Acme supermarkets dropped S&H Green Stamps in all 131 of its stores. Even King Soopers in Denver, the supermarket chain that launched the modern trading stamp craze, dropped S&H. Meanwhile, the stamp companies were quick to point out that while stores may be lowering prices in the absence of trading stamps, they were often raising them back to their original levels and sometimes higher within a few weeks.
Sandy Saver was the mascot for Gold Bond Stamps.
"My father...undertook to replace the pieces. With soldering iron and molten lead he spent uncounted evenings on the job. But it was useless. As fast as he put in one section, another fell out. It was on April 5, 1917 that he blew his top. Seizing the lamp, with a word never before heard in our Presbyterian household, he hurled it through a stained-glass window which the more refined homes of that period boasted. The next day, President Wilson declared war on Germany."
Even National Car Rental and its EZ Haul moving van subsidiary was giving S&H stamps and S&H expanded into Great Britain, where the stamps were pink because the established stamp company there was Green Shield. By 1964, S&H was printing 32 million copies of its catalog, called the Ideabook, 140 million savers books and was redeeming more than a billion stamps a week. By 1964, S&H was printing 32 million copies of its catalog, called the "Ideabook," 140 million savers books and was redeeming more than a billion stamps a week.
S&H Green Stamps catalog from 1910.
THE LAST VESTAGES OF TRADING STAMPS
Since the demise of trading stamps on a large scale in the 1970s, there have been attempts to spark the public interest in them once again. As food prices began to level off in the late 1970s, some grocery stores, particularly independently-owned ones in small towns and throughout New England especially, found renewed interest in stamps. Trading Stamps also became surprisingly popular with truckers as truck stops across the country began displaying the familiar S&H and Gold Bond signs again in the 1970s and 1980s.
A sales manager from the stamp company called the poll "dubious", contending that a press conference and a subsequent ad announcing the poll results showing a significant rejection of stamps were in preparation long before the ballots were received. The wording of the "poll" was rather suggestive as well.
S&H responded to the anti-stamp trend in September of 1965 by running a full-page ad in the New York Times and other newspapers, warning "Watch out, Mrs. Shopper! Someone may be trying to fool you about trading stamps." The ad made a point-by-point response to the stores claiming to reduce prices by dropping stamps, citing numerous cases where prices were actually raised weeks after stamps were dropped.
That ad drew fire from anti-stamp grocers and from New York Rep. Joseph Y. Resnick at a hearing he called on September 10, 1965 to investigate the question of stamps and consumer prices, according to the New York Times. Representatives of the stamp industry refused to attend, even though Rep. Resnick moved the hearing from Washington to New York where many of them were based, maintaining that Resnick wasn't qualified to hold such a hearing.
Not all government officials were against stamps, however. Before he entered politics, Minnesota Senator (and Vice-President) Hubert H. Humphrey gave Gold Bond stamps at a drug store he ran in Minneapolis, and became one of the industry's biggest allies in Washington.
By the end of 1965, 500 supermarkets had dropped trading stamps, although much of that business was picked up by competitors. The following year, despite the backlash, a market research organization found that 83 percent of the nation's 58 million households were still saving stamps, with 85 percent of women and 80 percent of men saving them.
To beat the stamp companies at their own game, the nation's two largest grocery chains formed an unusual alliance in California. A & P, Safeway, a number of drug chains and gasoline dealers formed the Blue Chip stamp cooperative. Throughout Los Angeles, stores and gas stations, often at the same intersection, were displaying banners reading "WE GIVE BLUE CHIP STAMPS" in a united front, effectively shutting out S&H and other stamp companies from the market. This got the attention of the Justice Department, which investigated the possibility of a monopoly conspiracy. Blue Chip nonetheless obtained the loyalty of California shoppers, with the highest redemption rate of any trading stamps.
Through the sixties, trading stamps had become a fixture in American culture. Sperry & Hutchinson alone was the largest wholesale purchaser of General Electric small appliances, Coleman lanterns and Bissell carpet sweepers. They were distributing more stamps than the U.S. Postal Service and had redemption centers in almost every American community.
S&H and Gold Bond were still issuing catalogs, and stamps, up to the end of the 1990s, just as the Internet was taking off.
S&H stamps were pink
in the UK.
The appeal of trading stamps went from homemakers to truck drivers by the late 1970s.
NOW AVAILABLE from Studio Z-7 Publishing
Finally, Warren turned up at Sperry & Hutchinson's offices in Manhattan and offered a deal to chairman Edwin J. Beinecke: stay out of Safeway's marketing areas and he'll call off his legal bloodhounds, or, if Beinecke preferred, Safeway would buy S&H from him. Beinecke promptly showed Warren the door. His parting words were "Then I'll break you." Shortly after the meeting, Warren was ousted as Safeway president and the chain began giving Gold Bond stamps in some of its stores.
The A&P was another chain that tried with all its might to resist stamps. "These stamps are a drag on civilization", remarked A&P president Ralph W. Burger in Fortune. He conceded, however that the company would be forced to use them "if it becomes necessary and desirable and if they produce the results." The chain ended up giving Blue Chip stamps in California and MacDonald Plaid stamps in its East Coast stores.
As had been the case in the past, some of the most outspoken opponents of stamps were the retail trade associations. At a convention of the Associated Food Retailers of Chicago, the executive secretary proclaimed "Chicago stands today as an island surrounded by a sea of trading stamps; and if someone moves all hell will break loose because this association will do everything in its power to smash the movement as it begins and we won't care who gets hurt." The tense and angry gathering of grocers shouted and applauded loudly.
When something as unprecedented as the popularity of trading stamps effects the business world as much as it had, organized attempts to seek government control are inevitable. Through the 1950s. legislatures in more than half of the states in the Union were introducing anti-stamp bills.
In 1955, fifty bills were introduced in 24 states attempting to penalize stamps in one way or another. Stamps were banned altogether in the District of Columbia and Kansas and the city council in Casper, Wyoming passed an anti-stamp ordinance and ordered the companies to get out of town by the end of the month. Washington levied taxes that made doing business in the state prohibitive but when North Dakota passed a law calling for a $6,000 annual fee from merchants handling stamps, residents protested and collected enough signatures to force the law into referendum. North Dakotans voted two to one to kill the law.
New Jersey attempted to collect $7.6 million from S&H in estimated cash value of stamps issued in the state that were never redeemed, under the state's escheat laws, which provided that unclaimed property can be taken over by the state. The suit was battled for five years until the New Jersey Supreme Court ruled in favor of S&H in 1960.
When Tennessee attempted to double the $300 privilege tax on stamps and levy a two percent gross receipt tax on merchants that gave them, S&H fought back by recruiting women's civic clubs to lobby the state legislature against the proposal. The women picketed on the steps of the state capitol and bombarded the legislators with 2,500 pieces of mail daily. In return, S&H made generous contributions to the clubs' treasuries.
But their efforts failed as the bill overwhelmingly passed and was signed by Governor Frank G. Clement, who sympathized somewhat with the stamp lobby but was annoyed by their tactics. The law was challenged up to the state Supreme Court, which upheld a previous ruling throwing out the gross receipts tax but increased the privilege tax.
Even the Federal Trade Commission investigated the industry and ruled in 1957 that trading stamp plans were in and of themselves not illegal but promised to watch individual companies for violations. Interestingly, Consumer Reports magazine cautiously endorsed trading stamps in the October, 1956 issue, saying that they were a benefit as long as the consumer redeemed them. The Better Business Bureau was also generally favorable to the stamp industry.
THE SIXTIES: THE TRADING STAMP CULTURE
By the early 1960s, the retailers who were most opposed to stamps realized they had to give in in order to compete. Their efforts to convince customers that stores without stamps were the best bargain fell on deaf ears so they begrudgingly took them on.
Trading stamps of all different kinds were given out by merchants as a discount for cash to customers throughout the 20th Century. When collected into multiples of books provided by the stamp company, they were redeemed by the customer for merchandise.
Trading stamps spread like wildfire across the country, turning up at supermarkets, gas stations, drug stores, dry cleaners and other retail outlets. Even small town movie theaters, feed mills and more than one mortuary took on trading stamps. They were promoted with slick advertising that often included characters such as Sandy Saver, the thrifty Scotsman for Gold Bond stamps, a pink elephant for Top Value stamps and a royal ear of corn promoting King Korn stamps. The opportunities seemed endless and new trading stamp companies were sprouting up across the country.
Small, independent grocers tended to like trading stamps, as the deep-pocketed stamp companies would offer to help promote the store in exchange for them taking on the plan, but the big supermarket chains as a whole hated stamps at first. Sales representatives from the stamp companies were often met with resistance and even hostility when they approached the big chains but the chains soon found them to be a necessary evil to remain competitive. Trading stamps quickly became enormously popular. Stamp sales to retailers had jumped from $30 million in 1950 to $192 million in 1955. Realizing that stamps were unavoidable, some supermarket chains got in the act by establishing their own trading stamp subsidiaries.
S&H Green Stamps sponsored TV variety shows hosted by Andy Williams and Dinah Shore, as well as Danny Kaye and Dick Clark.
TRADING STAMPS THROUGH HISTORY
The whole idea of premiums, the giving away of a little something extra as a reward for patronage, antedates recorded history. The first premium, quite possibly, was the baker's dozen. As early as 1793, a merchant in Sudbury, New Hampshire (Source: "Trading Stamps: A Long History" by James J. Nagle, New York Times, December 25, 1971) gave away copper tokens with purchases, that were redeemable for goods in his store. The idea caught on and throughout the 19th Century, merchants were handing out discount tokens that could be accumulated and redeemed. Customers returned to the same stores for more tokens, which maintained a steady cash flow and customer base for the merchant. In 1851, the B. A. Babbitt Company began putting certificates in packages of Sweet Home laundry soap. When a specified number of certificates were collected, they could be exchanged for color lithographs. When Cyrus D. Jones founded the Grand Union Tea Company in 1872, he issued cardboard tickets to customers of his Grand Union stores, which were redeemed for merchandise in a company catalog.
The Schuster and Company department store in Milwaukee introduced the first trading stamps to the public in 1891, known simply as the Blue Trading Stamp System. As with the latter-day plans, one stamp was handed out for every dime spent and customers pasted them in provided booklets, which were redeemed for merchandise in the store. The requirement that the stamps be affixed in books not only gave the customer a convenient place to put them but also helped prevent fraudulent misuse.
The phenomenal success Schuster's had with its trading stamp plan was observed by Thomas A. Sperry, a silverware salesman in Jackson, Michigan who did business in Milwaukee. Sperry theorized than an independent stamp company that supplied stamps to a number of merchants in the same community, yet would redeem the stamps itself, taking that burden off the merchant, would find even greater acceptance with customers.
In the eighties, S&H introduced "Green Seals", peel-off stickers to stores in Connecticut and later other areas. The seals, while still carrying the S&H name, had a completely different look from the stamps.
In 1989, they test-marketed a "Gift Saver Card", a credit card with a magnetic strip that could be electronically scanned at the cash register, recording points that could be redeemed for gifts. That evolved into S&H Greenpoints, launched in 1999, another electronic point system used primarily with online shopping (www.greenpoints.com).
In 1997, Gold Bond, a division of Carlson Companies, introduced a similar program called Gold Points Plus, where points can be collected with store purchases and cashed in for merchandise, travel or gift certificates.
When a fly-by-night stamp company abruptly pulled up stakes, as many of them did, collectors of the stamps panicked, holding what was in effect money that had suddenly become obsolete. When Benedict & MacFarlane Company, issuers of B. & M. Blue Trading Stamps filed bankruptcy in April, 1905, a large crowd of women who saved the stamps besieged the company's New York offices, fighting to get in to redeem the stamps. Security guards were placed at the door and only three customers were allowed in at one time. Chaos broke out as the women pushed, shoved and tore one another's clothing to get in.
The New York Times reported: "Excited women from Staten Island, Jersey, Brooklyn, and other places flocked to the store with their stamp books, eager to redeem them before Benedict & MacFarlane's supply of desks, baby carriages, chairs and numerous other articles gave out...'Stop pushing me! I didn't push you! I got here before you and it's my turn to come in! Oh, they're tearing my baby carriage all to pieces!' These are samples of things said by the angry women."