Vintage trading stamps took a licking

Although not usually thought of as antiques, trading stamps — the small, square paper coupons with gummed backings that were used as major marketing tools by retailers until the 1970s — have become collectible items. Many of us over 40 or 50 years of age can recall when these often-controversial stamps were highly popular among merchants.

The basic idea behind trading stamps was always to get customers to pay cash, as opposed to credit. Cash-paying customers would get a fixed number of stamps per dollar spent. The stamps would be typically pasted into booklets, which would be eventually redeemed for merchandise. The merchandise could be almost anything, depending upon the store.

The roots of the trading stamp idea can be traced to the 1790s, when a New Hampshire merchant gave away copper tokens that were redeemable for goods in his store. Throughout the 19th century, variations on the idea occurred. The B. A. Babbitt Co. in 1851, for example, put certificates in their soap packages that were later redeemable for colored prints.  

The first trading stamps, however, were not introduced until 1891 by the Schuster and Co. department store of Milwaukee. One stamp was issued for every dime spent, and the stamps were then pasted into booklets. They were only redeemable, however, for Schuster’s own merchandise.

Schuster’s success with the stamps was noticed by a businessman named Thomas A. Sperry. In 1896, he and Shelly B. Hutchinson formed a company and began issuing “S&H” stamps. Their key idea was to sell stamps directly to merchants and set up separate “premium parlors” (as they were originally called) where the stamps could later be redeemed for merchandise.

It was quickly apparent that Sperry and Hutchinson had hit on a brilliant concept and imitators soon sprang up. By 1900, numerous stamp companies were in existence.

Problems soon began to develop in the industry. Many companies were little more than scams. In one case in 1905, when B&M Blue Trading Stamps filed for bankruptcy, a major riot broke out in New York City.  

In addition, the stamp companies themselves were often victims of fraud. In these early days, before redeemed booklets were incinerated, people retrieved them from the company’s trash and re-redeemed them for merchandise. One stamp company dumped redeemed booklets into the sea, only to discover that divers had retrieved the booklets from the ocean floor.

The most serious problem from the stamp companies’ view, however, lay with the firms to whom they tried to sell. From the beginning, trade associations mostly opposed the stamps because, since the companies had to buy them, they cut into profits. Firms that did not sponsor the stamps were at a disadvantage. By 1913 or so, many states had passed laws either burdening stamp companies with high taxes or barring them completely.

The stamp companies appealed these laws all the way to the United States Supreme Court, but in 1916 the Court ruled that states did have the power to set restrictions on stamps. One of the justices even called trading stamps “an appeal to stupidity.”

The trading stamp business went into a decline after 1917. S&H survived through its contacts with truck stops and small retailers, but many firms folded.

Until the post-World War II era, times continued to be tough for the industry. In the early 1950s, however, the economy was booming and the times were right for stamps to reemerge. In 1951, S&H worked out a deal with King Soopers of Denver to offer its stamps in their grocery stores. Their popularity was immediately apparent and, in the early 1950s, stamps reappeared throughout the country.

Many new firms entered the industry, but S&H continued to lead the field. In general, smaller companies, especially small grocers, liked the stamps, but large corporations continued to resent them. Despite this opposition, stamp sales to retail businesses rose from $30 million in 1950 to $192 million in 1955.

These numbers, however, did not end the opposition. In 1955 alone, 24 states had bills in their legislatures attacking trade stamps in one way or another. Stamps were entirely banned in Kansas and Washington, D.C. By the early 1960s, however, the stamp companies were winning. Customers throughout the nation simply saw them as a bargain.

It was in this decade of the 60s that trading stamps became enshrined as a cultural part of American life. Dinah Shore was advertising S&H on television. Andy Warhol was inspired by them in some of his art. Trading stamps even appeared on the TV show “Sanford and Son.”

The 1960s also saw the emergence of the trading stamp industry as an economic force. The largest market for G.E. small appliances, for example, was S&H. In the 1970s, however, the oil crisis and an unstable economy led consumers to demand lower prices on items across the board. Interest in trading stamps declined enormously throughout this decade. Today they are still available in a few small company settings, but even S&H is phasing out physical stamps in favor of electronic point systems.
One site today for finding old trading stamps is eBay, where prices are quite reasonable.