Motion Picture Herald (Oct-Dec 1956)

Trading Stamps Win Attention of Exhibitors as a Business -Getter by WALTER BROOKS Director, Managers’ Round Table A timely topic at the recent TOA convention was a discussion of the potential value of trading stamps as a business stimulant at the box office. A confidential report was submitted, but no decisions were handed down. Since then, the New York Times has had a business story, ‘Trading Stamps: Who Foots the Bill,” and the Reader’s Digest for October carries a special report to consumers with the title “Trading Stamps — Bonus or Bunkum?” Currently, Dr. Persia Campbell, consumer counsel to the State of New York, has ordered an inquiry to collect facts on the controversial fad. We can quote Dr. Campbell, who says, “Just mention trading stamps, and you’ll get a quick, fiery argument among merchants. And wide disagreement on the facts.” Oates Far Back The distribution of trading stamps dates back more than 60 years and among the very first were Thomas H. Sperry and Shelley B. Hutchinson, who launched their “S & H Green Trading Stamps” in Bridgeport, Conn., in 1896. They reasoned that since the manufacturers, wholesalers and retailers got discounts when they paid their bills in cash, the housewife should have the same benefit. Currently, “S & H” Green Trading Stamps are advertised with a color-spread in the Saturday Evening Post in which they boast that over 20,000,000 smart women save their stamps, which they receive in over 60,000 stores and redeem for their choice of over 1500 costly items “that don’t cost a penny.” That’s one of the matters in disagreement, because it is quite obvious that trading stamps do cost something more than two per cent, consequently such great food chains as the A & P won’t give stamps on a profit margin which they claim is less than one per cent of volume sales. Some investigations have shown that saving women have paid as much as over eight per cent over the lowest prices to get a two per cent benefit in trading stamps. A merchant who charged 98 cents for an item was accused of “a sneaky plan of cheating us out of an extra stamp!” Many independent store owners contend the stamps are an unusual expense but housewives generally think they are “just dandy.” It is estimated that six out of 10 families in the United States save stamps. The cause of this fever is apparently the desire to get something for nothing. One St. Louis store is reported as having offered 50 extra stamps on any purchase of $1 or more — and this was advertised just once in a newspaper with 65,000 circulation. But the next morning, women from all over the city were massed 10 deep waiting for the store to open. And before they closed, more than 32,000 women had obtained this “bargain” — which was worth exactly 12Vz cents, as the actual value of the bonus given. Other stories are told, of the little boy who coveted an official football in a store window, and his mother bought it with stamps, so it cost nothing. But, the story goes, over 6,500 mothers in the same trading area bought the same football for the same reason and with the same currency. Redemption Problem The matter of redemption is a moot question — for the opponents of trading stamps, who are legion, say the rate runs as low as 30 per cent. But Sperry & Hutchinson say it is actually 97.487 per cent, according to their tax study over the past 15 years. S & H say their nationwide network of 450 redemption stores lift their average above the others. There are more than 20 different stamp concerns who operate in the State of New York, and in the 1956 legislature two antistamp bills were introduced, both of which died in committee. These would have ordered regulation as to the value and disposition of unredeemed stamps — in the manner of unpaid mutuel tickets at the race track. Trading stamp operators are not licensed, so there’s no official record of their business. But., across the country, 50 anti-stamp bills were introduced in 28 state legislatures, and laws were passed in Kansas, North Dakota and Utah, but some statutes held in abeyance. Pertinent to Theatres Dr. Campbell says the New York state inquiry into the trading stamp situation is because “we had so many complaints from merchants.” The state hopes to find the answer to these questions: Do stamps raise consumer prices? What percentage of stamps given are actually redeemed? How large are the reserves now in the hands of stamp companies operating in the state? Do trading stamps accentuate a trend from small to big business? Is the stated value of premiums comparable to prevailing prices? How do the stamps affect consumer habits? All of this is particularly pertinent to the motion picture industry, and the giving of trading stamps at the box office. Here the differences in opinion are probably greater than among retail merchants. It would amount to a slight reduction in admission prices — it might result in a tremendous urge to “go out to the movies” in order to fill stamp books. Some theatre men accomplish a quite similar result by issuing their own version of trading stamps, which pay off in free admissions. Report to TOA At the TOA convention, a report was given to committee member Walter L. Morris, of the Pike theatre, Knoxville, Tenn., by the distributors of “Prudential” and “Gold Arrow” stamps and a survey was ordered, in Fresno, California, as to the results obtained. This company does business in 44 States their stamps are redeemable for nationally advertised premium merchandise. But they do suggest a “stamp book” — the cover of which is worth 50 cents as admission to any theatre in their plan, and the book must contain 420 stamps, which are distributed through retail stores on the basis of one stamp for each 10 cents purchased. If the admission price is less than 50 cents change is given; if more, an added difference is charged in cash. Experiment Is Cited This plan is prospective, and depending on the outcome of the Fresno experiment. TOA and the committee members are waiting for the results to show favorably for national adaptation. Other theatre men have gone far issuing their own stamps which do not involve premiums or awards beyond free admissions. Some monthly program calendars — put out by small theatres and drive-ins, are good for two admissions when stamped to show attendance four times in any month, as a reward for regular weekly attendance. It is unusual for any family to actually “go to the movies” four times a month. The Independent Theatre Owners of Ohio, in their service bulletin of October 8, cite the TOA variation as an experiment, but say frankly, “the ordinary giveaway of stamps means little to theatres” because stamps do not attract new patrons. They suggest that theatre owners inquire about the kind of stamps most common in their areas — and that in Columbus there are S & H, TV stamps, Buckeye and a few smaller outfits now distributing stamps.. There could be a lot of confusion where many kinds of stamps were in local circulation, and the retailers were obviously interested in furthering their own brands, rather than joining big chains. Even the supermarkets are finding that the stamp fever subsides when their com( Continued on page 18) 16 MOTION PICTURE HERALD. OCTOBER 20, 1956