TRADING STAMPS: A Hidden Charge in the Grocery Bill

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IN their race for the consumer's dollar, U.S. retailers have turned the old trading-stamp gimmick into the hottest sales idea of the postwar decade. By playing on the housewife's weakness for giveaways, supermarkets and department stores have rung up astonishing records at the cash register. After Detroit's Big Bear chain of 33 supermarkets introduced Gold Bell Gift Stamps last March, gross sales jumped 40%; Miller's supermarkets in Denver increased their business about 30% by plugging trading stamps. From Los Angeles to Boston, filling-station operators, dry cleaners, used-car dealers and beauty parlors have signed up for stamp plans. Well over 100,000 U.S. retailers are using some form of stamps to boost sales, and the U.S. Department of Commerce estimates that stamp savers are redeeming their books for more than $1 billion worth of premiums yearly.

The grassfire spread of trading stamps has also touched off a hot argument among retailers. Many an independent merchant swears by stamps as the best answer to chain-store com petition. Says San Francisco Grocer Wayne Bingham: "They're like a snowball, once you get the thing rolling. Let one customer get his first premium, and the whole community is going to hear about it. For us, that's better than any ad over television." But the stamp plan's biggest foe, giant Safeway, calls it nothing but "a shell game to distract the consumer from the fact that she is paying higher prices." Because Safeway met stamp competition by slashing prices, the U.S. Justice Department slapped an antitrust suit against the chain, charged it with selling goods below cost (TIME, July 18).

While merchants argue among themselves, U.S. housewives seem in solid agreement that stamps are dandy. In one busy day a West Coast grocer ran a check on his 1,700 shoppers, found that only one failed to ask for stamps. Grand Union President Lansing Shield has a simple explanation for the stamps' popularity: "Getting something for nothing and the squirrel instinct -some people even save string." For the budget-strapped housewife who needs a new toaster or set of dishes, and can get them simply by collecting stamps for money she had to spend anyway, the plan is irresistible. One Dallas matron considers the stamp plan "a sort of painless savings account."

By collecting stamps, she points out, "I don't have to ask my husband for the money."

The Stanford Research Institute conducted a study of the Denver area, found that almost two out of every three shoppers believed that the stamps meant they were getting something for nothing. Though few had any idea of the actual worth of the stamps, four out of five customers saved them, partly because of "inner satisfactions from saving the stamps," partly because "redeeming the completed book gives a feeling of thriftiness."

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