Green Shield Stamps

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Green Shield Stamps were a sales promotion or incentive scheme designed and deployed in the UK and Ireland to encourage or reward shopping, by being able to buy "free" gifts.

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[edit] History

An American innovation, they were founded in the UK by Richard Tompkins, and were very popular during the 1960s and 1970s. Other schemes included Pink Stamps (used as Sperry & Hutchinson could not use green), the Co-op, Blue Chip and the short-lived UK operation of King Korn.

Sperry & Hutchinson began offering stamps to U.S. retailers in 1896. The retail organisations bought the stamps from S&H and gave them as bonuses with every purchase based on the amount purchased. The stamps were given away at filling stations, corner shops and supermarkets. When the customer had collected sufficient stamps and stuck them into Green Shield collectors books (a task often given to amuse children), the shopper could then claim valuable merchandise from a catalogue or local Green Shield shop.

S&H made their money by selling the stamps to retailers. The benefit to the retailers was customer loyalty. Customers flocked to stores that gave stamps. It was an extremely successful programme. According to a publicist for Sperry and Hutchinson, when the program reached its zenith in the mid 1960s, they were printing three times as many stamps as the U.S. Postal Service and its catalogue was among the largest publications in the countries in which it operated. It was estimated that 80 percent of households collected stamps of one sort or another, creating an annual market for S&H of about $825 million.[citation needed]

Tesco founder Jack Cohen was an enthusiastic advocate of trading stamps as an inducement for shoppers to patronise his stores; he signed up in 1963, and became one of the company’s largest clients. But Cohen was a fan of pile it high and sell it cheap, and in the mid-1970s Tesco faced many cost problems associated with not properly integrating its purchased chains of stores. In 1977 Tesco launched Operation Checkout, an across the board price cutting campaign aimed at countering the threat from the new breed of discounters such as Kwik Save. A key decision was to abandon Green Shield stamps, thus saving some £20m a year and helping to finance price reductions.[1]

In light of a price war at the checkout, and higher prices where the stamps were sold, consumers quickly realised that although the stamps were accumulating, grocery prices were having to rise to cover the costs of the scheme - and as inflation was quite high, the value of the stamps was going downwards.

As sales began to slow and other retailers abandoned the scheme, the original Green Shield Stamp 'catalogue' shops were rebranded Argos beginning in July 1973. For seven years it traded independently (though heavily linked to the Green Shield stamps operation) before being sold to BAT Industries.

Sperry and Hutchinson was sold by the founders' successors in 1981, and was purchased from a holding firm by a member of the founding Sperry family in 1999. At that time, only about 100 U.S. stores were offering Green Stamps. Eventually, though, the company rebounded with the birth of the Internet and now offers "greenpoints" as rewards for online purchases.[2]

[edit] Green Shield Stamp "syndrome"

Green Shield Stamps were successful as a business, not because they encouraged people to buy goods in proportion to the sales value - they made money because so many receivers of Green Shield Stamps never cashed them in. Sticking the stamps in the books was painful and time consuming. This became known as Green Shield Stamp syndrome.

[edit] References

  1. ^ http://cep.lse.ac.uk/seminarpapers/24-05-04%20-%20Background%20paper%20by%20Geoffrey%20Owen.pdf
  2. ^ http://www.greenpoints.com

[edit] External links