Trading stamp

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.

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.

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 10¢ of merchandise purchased. A typical book took approximately 1200 stamps to fill, or the equivalent of US $120.00 in purchases.

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