Free with Purchase: The Age of Trading Stamps

These days almost every retailer has some kind of loyalty program- frequent flyer miles, grocery store club cards, even low-tech cardboard punchcards at the local sandwich shop. But 100 years ago it all started …with trading stamps.

REDEEMING IDEA

Back in 1896, a silverware salesman named Thomas Sperry was making his regular rounds of the stores in Milwaukee when he noticed that one store was having success with a unique program. They were rewarding purchases with coupons redeemable for store goods. That gave Sperry an idea: why not give out coupons that weren’t tied to merchandise from a particular store, but were redeemable anywhere in the country?
With backing from local businessman Shelly Hutchinson, he started the Sperry and Hutchinson Company, and began selling trading stamps. Here’s how it worked:
* S&H sold stamps (they looked like small postage stamps, each with a red S&H insignia on a green background) to retailers.
* Retailers gave them to customers as a bonus for purchases, ten stamps for each dollar spent.
* Customers collected the stamps in special S&H books until they had enough to trade back to Sperry and Hutchinson in exchange for merchandise like tea sets or cookware.
* Retailers who participated in the program hoped that customers would feel like they were getting something for free, which would entice them to continue to shop loyally at their stores.
* At first only a few stores across the country offered the stamps, but over the next 50 years, through economic recessions, the Roaring Twenties, the Great Depression, and two world wars, S&H’s popularity grew steadily.

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