trading stamp

a stamp with a certain value given as a premium by a retailer to a customer, specified quantities of these stamps being exchangeable for various articles.

[1895-1900, Amer.]

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▪ stamp

      printed stamps given as a premium by retailers to customers and redeemable for cash or merchandise from the trading stamp company when accumulated in specified amounts. Retailers sponsor trading stamp programs as a means of building customer loyalty. The retailer purchases the stamps from the trading stamp company at a cost based on a small percentage of total sales.

      Trading stamps appeared in the United States and Great Britain in the late 19th century. The most popular trading stamp program in the United States, S&H Green Stamps, was sponsored by Sperry & Hutchinson. The company started operations in 1896 and flourished from the 1930s through the 1960s. In 1964 the S&H Green Stamp catalog became the largest single publication distributed in the United States. Trading stamp programs were also popular in Great Britain and Japan during the 1960s.

      Although the use of printed trading stamps waned toward the end of the 20th century, the notion of rewards as a means of generating customer loyalty evolved into so-called “affinity” or “loyalty reward” programs. These programs are exemplified by airlines' frequent flier programs and hotels' frequent stay programs. At the turn of the 21st century, S&H introduced an electronic version of trading stamps called S&H Greenpoints. This and other online loyalty programs allow customers to accrue points and earn rewards through Internet transactions.

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