Trading Stamps
Trading stamps are small pieces of glue-backed colored paper, given in proportion to purchases made and redeemable for merchandise. They were first used in the United States in Schuster's Department Store in Milwaukee, Wisconsin, in 1890. Schuster's gave the stamps to customers paying in cash in an effort to limit credit use. The S&H Green Stamp Co. attributes their invention to their founders (the Sperry and Hutchinson of S&H) in 1896 as a way to "say thank-you" to customers and calls the trading stamps "America's first frequent shopper program and grandfather of marketing promotions such as frequent flyer miles." The first S&H redemption center opened in 1897 as a kiosk. One of the earliest items in the catalog was a Bissellcarpet sweeper; its modern counterpart was still in the catalog 100 years later.
The heyday of the trading stamp came during the 1950s and 1960s when large numbers of Americans got the stamps with their groceries and exchanged filled books (usually 1500-3000 stamps) for a variety of household goods. At the height of stamp fever, S&H distributed its catalogs free in supermarkets and operated multiple redemption centers, the size of small shops, in towns all over the United States. They claim that in 1964 its catalog was the largest single publication in the United States.
S&H Green Stamps, Top Value, King Korn, Triple S, Gold Bell, and Plaid were among the most popular nationally circulated brands of stamps. Attesting to the pop chic of trading stamps, artist Andy Warhol painted a series of S&H green stamps posters along the lines of his famous Campbell Soup works.
As consumers opted for lower prices in lieu of stamps in the 1970s and 1980s the movement waned but never disappeared. One of the last major grocery chains to carry the stamps was the Publix chain in Florida, which dropped them in favor of coupons and other promotions that were less costly to the store. A 1988 study in the Academy of Marketing Science Journal notes that a survey of retail stores showed that stores that gave trading stamps had significantly lower gross profit margins and net profit returns than did stores that did not.
At the end of the twentieth century, the consumer's persistent desire to be tangibly rewarded for patronage continued in other forms—frequent flier miles, the return of percentages of credit card purchases—but only a few retail establishments offered actual trading stamps. The stamp movement tried to keep pace with changes in technology. Although S&H continued to distribute stamps and offer merchandise catalogs, they began to offer "paperless green stamps" saved on an ID card and added automatically at the register. In addition to redemption for gifts in the catalog, the stamps could be used to save in the store, as coupons for entertainment, frequent flyer miles, and donations toward a charity or community project.
Further Reading:
Lynn, Judy, and Bobby Vaught. "Three Different Variables and Their Relation to Retail Strategy." Academy of Marketing Science Journal. Vol. 16, Fall 1998.
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