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Trading stamps are small paper coupons given to customers by merchants in loyalty marketing programs that predate the modern loyalty card. Like the similarly-issued retailer coupons, these stamps only had a minimal cash value of a few mils (thousandths of a dollar) individually, but when a customer accumulated a number of them, they could be exchanged with the trading stamp company (usually a third-party issuer of the stamps) for premiums, such as toys, personal items, housewares, furniture and appliances.
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Origin
The practice of retailers issuing trading stamps started in 1891 at the Schuster's Department Store in Milwaukee, Wisconsin. At first, the stamps were given only to customers who paid for purchases in cash as a reward for not making purchases on credit. Other retailers soon copied the practice of giving trading stamps that could be redeemed at the issuer's store. One example was L. H. Parke Company a Philadelphia and Pittsburgh manufacturer and distributor of food products that included coffees, teas, spices along with canned goods. They established a trading stamp program in 1895 under the name Parke's Blue Point Trading Stamps for customers who purchased Parke's products in local retail grocery stores in Pennsylvania and New Jersey. The program was very successful. Parke set up viewing rooms where retail customers could inspect and obtain various premium goods in their headquarters buildings in Philadelphia and Pittsburgh.
Independent trading stamp companies
In 1896 the Sperry and Hutchinson Company was created as an independent trading stamp company in the United States and by 1957 it was estimated that there were approximately 200 trading stamp companies in operation. Typically, merchants would pay a third-party trading stamp company for the stamps and would then advertise that they gave away trading stamps with purchases. Large retailers were usually given a discount on the stamps while smaller retailers generally had to pay the full cost of adopting the trading stamp program for their business. The intent of this was to get customers to be loyal to the merchant, so that they would continue shopping there to obtain enough stamps to redeem for merchandise. Customers would fill books with stamps, and take the books to a trading stamp company redemption center to exchange them for premiums. Books could also be sent to the trading stamp company in exchange for premium merchandise via mail order catalogs. An example of the value of trading stamps would be during the 1970s and 1980s where the typical rate issued by a merchant was one stamp for each 10ยข of merchandise purchased. A typical book took approximately 1200 stamps to fill, or the equivalent of US $120.00 in purchases.
While one of the most popular brand of trading stamps in the United States were the S&H Green Stamps, informally known as "green stamps", other larger brands included Top Value Stamps, Gold Bond Stamps, Plaid Stamps, Blue Chip Stamps, Buccaneer Stamps and Gold Strike Stamps. Texas Gold Stamps were given away in their namesake state mainly by the H-E-B grocery store chain and Mahalo stamps in Hawaii.
Growth and decline
The use of trading stamps grew with the spread of chain gasoline stations in the early 1910s and the then new industry of chain supermarkets in the 1920s. Merchants found it more profitable to award them to all customers rather than cash only customers. Legal challenges regarding the use of trading stamps were raised in various jurisdictions around the United States but were often struck down. Some merchant groups disliked trading stamps and actively worked to have them banned in their areas. Following World War II the use of trading stamps expanded when supermarkets began issuing them as a customer incentive. By 1957 it was estimated that nearly 250,000 retail outlets were issuing trading stamps with nearly two thirds of American households saving various trading stamps. During this time trading stamp companies had between 1,400 - 1,600 retail centers were consumers could redeem their trading stamps for consumer goods. In the early 1960s, the S&H Green Stamps company boasted that it printed more stamps annually than the number of postage stamps printed by the US government. In 1968 it was reported that more than $900 million in stamps were sold in the United States.
Beginning in the early 1970s the use of trading stamps began to decline. Gasoline service stations stopped offering them due to the energy crisis that occurred and many supermarkets started spending more money to advertise lower prices rather than issue stamps. During the 1980s there was a resurgence in the popularity of trading stamps for a time but overall their use continued to decline. Their role has been replaced by coupons, rewards programs offered by credit card companies and other loyalty programs such as grocery "Preferred Customer" cards. Through the 1990s and early 2000s the majority of the remaining trading stamp companies either ceased operations or converted to an online format. In 2008 the last operating trading stamp company in the United States, Eagle Stamps, closed.
Canada
The use of trading stamps began in Canada circa 1900 but their use was banned by the Canadian government in 1905. In 1959 the grocery chain Loblaws introduced their Lucky Green Stamps program and a trading stamp program was started by an IGA grocery store in Winnipeg. Although faced with legal challenges the use of trading stamps in these instances was upheld as legal since they did not meet the definition of trading stamps in the Canadian Criminal Code.
United Kingdom
By the 1960s the use of trading stamps had spread to the United Kingdom. Entrepreneur Richard Tompkins established Green Shield Stamps in the United Kingdom. Although based along a similar model, the Green Shield Stamps were independent of S&H Green Stamps but carried a similar trademark. Tompkins' company began selling stamps to filling stations, small retailers and had signed up the Tesco supermarket chain to the Green Shield Stamp franchise in 1963. The S&H Company began offering their stamps in the United Kingdom as well but with the color changed to pink. 1965, the British co-operative movement was offering trading stamps as a new means of allocating patronage dividends to its consumer members.