PART 1         PART 3

THE FIFTIES: THE GOLDEN AGE OF STAMPS

The outbreak of World War II in the forties, which brought rationing and shortages that eliminated the practicality of giving away premiums, again seemed to signal the downfall of the stamp industry for good. But when the G Is came home, the economy was robust, demand for consumer goods was higher than ever and the nation was hungry for something new. The time was right to introduce a whole new generation to stamps. The breakthrough happened in a rather unlikely place.

In June, 1951, Denver-based King Soopers tested the waters by offering S&H Green Stamps in one of its grocery stores. S&H primed the pump by giving the chain financial and promotional help in taking on the plan. The response was overwhelming. By October, the entire King Soopers chain was giving S&H stamps.

Competing chains responded by offering other stamp plans. Stores such as Save-A-Nickel, Busley's and Piggly Wiggly got into the act. With almost everybody in Denver giving stamps, stores began to out-do each other by offering double stamps on certain days of the week, two instead of one for every dime spent.

Soon, the stores were giving double stamps every day and triple stamps on certain days. Then triple stamps all week long. When Save-A-Nickel began giving quadruple stamps, inflating the value of the stamps to about eight cents on the dollar, the five stamp companies doing business in the area stepped in and issued a joint statement that said merchants would be prohibited from giving more than one stamp per dime spent.

Trading stamps spread like wildfire across the country, turning up at supermarkets, gas stations, drug stores, dry cleaners and other retail outlets. Even small town movie theaters, feed mills and more than one mortuary took on trading stamps. They were promoted with slick advertising that often included characters such as Sandy Saver, the thrifty Scotsman for Gold Bond stamps, a pink elephant for Top Value stamps and a royal ear of corn promoting King Korn stamps. The opportunities seemed endless and new trading stamp companies were sprouting up across the country.

Small, independent grocers tended to like trading stamps, as the deep-pocketed stamp companies would offer to help promote the store in exchange for them taking on the plan, but the big supermarket chains as a whole hated stamps at first. Sales representatives from the stamp companies were often met with resistance and even hostility when they approached the big chains but the chains soon found them to be a necessary evil to remain competitive. Trading stamps quickly became enormously popular. Stamp sales to retailers had jumped from $30 million in 1950 to $192 million in 1955. Realizing that stamps were unavoidable, some supermarket chains got in the act by establishing their own trading stamp subsidiaries.

Midwest-based Thriftway stores invested in King Korn stamps, which had been founded by Chicago businessman Peter Volid in 1953. Grand Union, the New England chain that had given out redeemable tickets in its earliest days, began Triple-S (Stop & Save Stamps) in 1955 after giving S&H stamps in some of its stores and Kroger, in partnership with the Gold Bond Stamp Company, established Top Value stamps.

But some supermarket chains still resisted. Lingan Warren, president of Safeway, hated stamps with a passion. They nearly put him out of business in Denver where his company countered the stamp wars by cutting prices. Consequently, Safeway cut prices so low that while hanging on to their market share in Denver, profits declined sharply. Then the U. S. Justice Department slapped an anti-trust suit against Safeway, charging the chain with selling goods below cost.

Warren continued his fight against stamps, suing stamp companies and competitors who used them in Safeway's marketing areas on the grounds that the stamps themselves represented below-cost pricing. His legal staff drew up anti-stamp bills for presentation in state legislatures.

Finally, Warren turned up at Sperry & Hutchinson's offices in Manhattan and offered a deal to chairman Edwin J. Beinecke: stay out of Safeway's marketing areas and he'll call off his legal bloodhounds, or, if Beinecke preferred, Safeway would buy S&H from him. Beinecke promptly showed Warren the door. His parting words were "Then I'll break you." Shortly after the meeting, Warren was ousted as Safeway president and the chain began giving Gold Bond stamps in some of its stores.

The A&P was another chain that tried with all its might to resist stamps. "These stamps are a drag on civilization", remarked A&P president Ralph W. Burger in Fortune. He conceded, however that the company would be forced to use them "if it becomes necessary and desirable and if they produce the results." The chain ended up giving Blue Chip stamps in California and Plaid stamps in its East Coast stores.

As had been the case in the past, some of the most outspoken opponents of stamps were the retail trade associations. At a convention of the Associated Food Retailers of Chicago, the executive secretary proclaimed "Chicago stands today as an island surrounded by a sea of trading stamps; and if someone moves all hell will break loose because this association will do everything in its power to smash the movement as it begins and we won't care who gets hurt." The tense and angry gathering of grocers shouted and applauded loudly.

When something as unprecedented as the popularity of trading stamps effects the business world as much as it had, organized attempts to seek government control are inevitable. Through the 1950s. legislatures in more than half of the states in the Union were introducing anti-stamp bills.

In 1955, fifty bills were introduced in 24 states attempting to penalize stamps in one way or another. Stamps were banned altogether in the District of Columbia and Kansas and the city council in Casper, Wyoming passed an anti-stamp ordinance and ordered the companies to get out of town by the end of the month. Washington levied taxes that made doing business in the state prohibitive but when North Dakota passed a law calling for a $6,000 annual fee from merchants handling stamps, residents protested and collected enough signatures to force the law into referendum. North Dakotans voted two to one to kill the law.

New Jersey attempted to collect $7.6 million from S&H in estimated cash value of stamps issued in the state that were never redeemed, under the state's escheat laws, which provided that unclaimed property can be taken over by the state. The suit was battled for five years until the New Jersey Supreme Court ruled in favor of S&H in 1960.

When Tennessee attempted to double the $300 privilege tax on stamps and levy a two percent gross receipt tax on merchants that gave them, S&H fought back by recruiting women's civic clubs to lobby the state legislature against the proposal. The women picketed on the steps of the state capitol and bombarded the legislators with 2,500 pieces of mail daily. In return, S&H made generous contributions to the clubs' treasuries.

But their efforts failed as the bill overwhelmingly passed and was signed by Governor Frank G. Clement, who sympathized somewhat with the stamp lobby but was annoyed by their tactics. The law was challenged up to the state Supreme Court, which upheld a previous ruling throwing out the gross receipts tax but increased the privilege tax.

Even the Federal Trade Commission investigated the industry and ruled in 1957 that trading stamp plans were in and of themselves not illegal but promised to watch individual companies for violations. Interestingly, Consumer Reports magazine cautiously endorsed trading stamps in the October, 1956 issue, saying that they were a benefit as long as the consumer redeemed them. The Better Business Bureau was also generally favorable to the stamp industry.

PART 3 - THE TRADING STAMP CULTURE,
AND THE DEMISE OF STAMPS

©2005 STUDIO Z•7 PUBLISHING