THE TRADING STAMP STORY
(or When Trading Stamps Stuck) Part 3
by Jeff R. Lonto
©2000, 2004 by Jeff R. Lonto
PART 1 PART 2
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.
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. 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.
They further modernized operations in 1965 with a new, updated logo and new stamp denominations. In addition to the single stamps that came with every ten cents in purchases, a larger "10" stamp was introduced to go with dollar purchases and a "50" stamp for five-dollar purchases. The new denominations were easier on the tongue as only five "10" stamps were required on each page of the savers book as opposed to fifty singles, and just one "50" stamp per page. Competitors followed suit and soon every major stamp company was at least issuing "10s" if not "50s."
S&H stamps could sometimes be redeemed for items not in the catalog. Under the company's "Group-Savings Project" the company redeemed books of stamps in large numbers collected by community groups such as schools, churches and other non-profits, for needed vehicles, equipment and other large-scale items. The city of Erie, Pennsylvania, for example, mobilized its citizens to collect 4,500 books of S&H stamps to buy the city zoo a pair of gorillas. The gorillas were promptly named Samantha and Henry -- S&H.
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, stating "Columbia University will issue Plaid Stamps to students upon payment of fees." Students in droves asked about the stamp offer.
Stamps further saturated popular culture. Singer Andy Williams, entertainer Dinah Shore and game show host Gene Rayburn advertised S&H Green Stamps on television 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 uses a boiled beef tongue to lick his Blue Chip stamps.
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.
Incineration became the most acceptable method of destruction. But the quantities of books were large enough that in order to burn them up in a standard furnace, it would take long periods of time -- and enough heat to melt the grates and even cause accidents. And then there was all that ash to deal with.
Ever the innovator, Sperry & Hutchinson was the first company to install special high-tech incinerators at its warehouses around the country. The stamp books, after being pierced with hole punches and audited, were shoveled into burners with special equipment that caused the complete combustion of the materials, including the smoke, gasses and ash.
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 fell 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. In Minneapolis a few years later, Gold Bond stamps were dropped at Super Valu, its hometown flagship. Even King Soopers in Denver, the supermarket chain that launched the modern trading stamp craze, dropped S&H.
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.
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. 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 to investigate the question of stamps and consumer prices. Representatives of the stamp industry refused to attend, 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.
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. Plaid stamps, which had been distributed by A&P stores virtually disappeared from the market 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.
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.
STAMPS IN THE MODERN ERA
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 '70s some grocery stores, particularly independently-owned ones in small towns and throughout New England especially, found renewed interest in stamps and they became surprisingly popular with truckers as truck stops across the country began displaying the familiar S&H and Gold Bond signs again.
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.
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. Gold Bond stamps are also carried at a few truck stops and small stores, including Delmonico's, an Italian grocery store in Minneapolis that began giving the stamps when the program was launched, in 1938.
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.
©2005 STUDIO Z•7 PUBLISHING