Trading Stamps and Coupons

• Author: Jeffrey Lehman, Shirelle Phelps

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A comprehensive term for any type of tickets, certificates, or order blanks that can be offered in exchange for money or something of value, or for a reduction in price when a particular item is purchased.

U.S. businesses attempt to attract customers by using advertising, promising low prices, and claiming to offer high-quality goods and services. Another way of attracting business is by offering potential customers incentives, such as trading stamps, coupons, and price rebates. Though trading stamps have declined in popularity since the 1960s, the idea of awarding some type of credit for purchasing goods and services has survived. When commercial airlines award "frequent-flier miles" to their passengers, they are offering a variation on the trading stamp concept.

Trading stamps became popular during the Great Depression of the 1930s. They are printed stamps that can be saved and pasted into booklets until the individual collecting them has a sufficient number to exchange them for a particular item of merchandise. A trading stamp company negotiates agreements that allow retail merchants to give stamps to customers in proportion to how much they spend at the merchant's store. When the books are filled, they can be offered in exchange for merchandise provided by the trading stamp company through a catalog or at a redemption center. In effect, the customer receives an additional benefit for the price she pays for merchandise.

The merchant receives the benefit of the advertising done by the trading stamp company. The merchant also expects to attract more customers than a merchant who charges the same price for goods but does not offer stamps. The trading stamp company earns money by selling the stamps to the retailer.

In the heyday of trading stamp collection, various trading stamp companies competed for this lucrative market, which drew much of its business from grocery stores. The largest and most famous was the Sperry and Hutchinson (S&H) Company, which offered S&H Green Stamps. S&H filed lawsuits in the 1960s to prevent

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its stamps from being brokered by persons and companies other than licensed retailers. Though the lawsuits were unsuccessful, the downfall of trading stamps came from retail merchandisers who offered consumers price discounts large enough to lure them from merchants who offered stamps. In addition, in the burgeoning consumer economy of the 1960s and 1970s, merchandise was easily affordable, and...