TRADING STAMPS
Bulder, the Garter trading stamp man, called according to arrangement.
"_Good_ morning, Mr. Black," he said heartily, as he entered the store.
"Well, I _don't_ think we'll have much difficulty in getting this little
matter fixed up to-day. It is going to mean a _big_ thing for you, and
you can be _quite_ sure that the Garter Trading Stamp Company is going
to be at the back of you to make this thing a _big success_."
He spoke quite confidently, as if he were sure I was going to take them
up. And indeed I had been all along practically decided to adopt them.
"That's fine," I said in response to Bulder's greeting. "I want you,
however, to meet Mr. Fellows, who is waiting in my office." I saw a
faint change take place in Bulder's manner. He seemed at once to become
a little suspicious and on his guard.
"Fellows? Fellows?" he replied. "Oh, one of your men?"
"Well, yes and no," I returned with a laugh. "He is connected with the
Flaxon Advertising Agency and he does all my advertising, and I like to
get the benefits of his ideas."
"Mr. Black," said Bulder, "I am doing this business with you, and while
I am _sure_ that Mr. Fellows is a _mighty_ fine man, you could hardly
expect me to want to talk this matter over with him--at any rate, with
the idea of helping you to decide what to do; for, you see, he is an
advertising man and _naturally_ wants to spend all your appropriation
himself."
"Fellows isn't that kind," I replied, somewhat curtly.
Bulder saw that he had been tactless, so he put his hand on my shoulder,
and said, soothingly:
"_That's_ all right, Mr. Black, I was only joking. Glad to talk the
matter over with _any_ friend of yours."
I don't know why it was, but I seemed from that moment to feel a
distrust of him. I had rather liked him before. But now he seemed to me
too suave, too--oh, too fat and easy about it.
Well, we went into my little office and I introduced him to Fellows.
"Our mutual friend, Mr. Black," said Bulder with a smile, "wants me to
talk over with you both the _splendid_ possibilities of his store
through the Garter Trading Stamps. _Good idea._ It shows he is cautious
and has good judgment."
"Mr. Black is quite a busy man, you know, Mr. Bulder," Fellows replied,
"and perhaps don't have time enough always to think over every angle of
a proposition; so he very wisely believes in talking things over and
getting an outside viewpoint. Mr. Black can analyze these problems
himself just as well as you or I can; but he believes in conserving his
time and energies as much as he can."
All this preliminary by-play interested and amused me. But then the real
battle began. Imagine those two--that big, burly, good-natured, somewhat
bulldozing Bulder, and the shrewd, courteous New Englander, Fellows;
Bulder with his heavy, sledge-hammer methods,--the bludgeon method, you
might call it,--and Fellows with his keen, sharp, rapier methods.
Bulder realized at once that Fellows was strongly against the stamps,
and that it was going to be a battle of wits and logic. I had better
confess that my sporting blood was roused, and I had decided that the
fellow who won the argument would have me on his side.
"What do you know about the company?" I asked Fellows, so as to get
things started.
"Not a thing," he said, "but I am sure that that is a matter of minor
importance; for Mr. Bulder is too big a business man to connect himself
with an organization that is not thoroughly sound."
Very neatly put!--and yet I could see that, even if the trading stamp
proposition won, Bulder would still have to prove that his company was
financially and morally sound.
How I wish I could write down in full detail all that was said by both
of them, but I can't remember it all. Bulder started in with a few heavy
blows by stating that the Garter trading stamps gave the merchant who
handled them a decided advantage over his competitors; for their
splendid premium catalog, their numerous supply stations, the fact that
they would let me have a set of representative premiums for window
display, the excellent line of advertising matter which he said was part
of the service which I bought from them at the time I bought their
stamps. . . . "You _quite_ understand, Mr. Black," he said laboriously,
"that you are not buying _just_ trading stamps from us, or trading
tokens as we prefer to call them, but you are buying a merchandising
service--you are buying _all_ the selling ideas and helps which we can
give you, besides the _splendid_ backing which the name of Garter stamps
gives you.
"And," he continued to Fellows, for he knew that Fellows was the
opposition and not I, "when Mr. Black takes up our agency, _no_ other
hardware man in town will be able to get it. . . . In fact," he said,
with a sudden burst of generosity, "so that there will be absolutely no
question of full protection and no competition, we will not _even_
supply a glass and china store, a five-and-ten-cent store, a cutlery
store, or a novelty store--in fact, _any_ other store which might
compete with him in _any_ way.
"Thus, you see, I am offering you something, Mr. Black," he said with an
ingratiating smile, "which is a _wonderful_ advantage to you. It will
really put _your_ store in a class by itself."
"Fine!" broke in Fellows, before I could say anything. "A thought has
just occurred to me, however. While you promise that no other hardware
man shall have the _Garter_ stamps, can you promise that no _other_
trading stamp concern will offer stamps to any other hardware man in
Farmdale?"
Bidder replied with a deprecating smile: "What other concerns are there
of our importance and size?"
Fellows came back with the names of two concerns which were better known
to me than the Garter trading stamp.
"Why, yes," drawled Bulder, "of course, they _might_ offer stamps to
some other hardware man. But, my dear sir, think a minute--what are the
value of _their_ stamps compared to _ours_? Why, my good friend, you
_can't_ compare them! Every woman in town knows that Garter stamps have
a higher premium value than _any_ others."
"Exactly," replied Fellows. "By the way, what other stores have you in
this town at present?"
Bulder slowly turned until he was facing Fellows. Leaning his elbow on
the desk, he asked:
"Didn't I tell you that I was giving Mr. Black the opportunity to reap
the _big benefit_ of being the first with our stamps here?"
"That's funny!" I broke in impetuously, but a look from Fellows stopped
me. I had been going to say that I didn't see how his last two remarks
gibed; for in one breath he had said that every woman in town knew that
Garter trading stamps were better, and in the next he had said that I
was to reap the first big benefit of having the stamps.
Fellows had leaned forward and was saying to Bulder:
"Mr. Bulder, do you really believe it is good business to offer
something for nothing?"
"Surely," cried Bulder, "you are not going to bring up that worn-out
argument? Everybody knows that it is not something for nothing. . . .
Look here, my good friend," said he, turning to me, "if you buy some
goods and pay cash you _expect_ a discount for paying cash, don't you?"
"Yes," I replied hesitatingly.
"_Surely_ you do! And if you didn't get the discount for cash, you would
take all the credit you could, _wouldn't_ you? . . . Very well," he
continued, without waiting for a reply, "that's what our stamps will
do. They are not something for nothing. They are merely a discount for
cash. People that don't pay cash don't get the stamps. . . ."
Then he went on to tell me about some stores which had changed from a
credit basis to cash through the use of Garter stamps. In my imagination
I saw Fellows being driven into a corner by Bulder's bludgeon, his
rapier beaten down and his defenses gone.
Fellows kept trying to work a word in edgewise, but Bulder, by the
continued force of his words, beat down all Fellows' attempts to break
in. Finally Bulder leaned back and said:
"Surely you are not going to stick to your foolish idea that trading
stamps _are_ something for nothing. _All_ sensible people know that no
one can give something for nothing and live, and I trust that the
trading stamp concerns are sensible people. It is merely a cash
discount."
"Why couldn't I give a cash discount, instead?" I asked--and as soon as
I said it I was sorry I had, because I noticed a look of annoyance in
Fellows' face.
"That is a _very_ sensible question," said Bulder. "Because if you did
give the cash discount yourself it would be so _trifling_ that the
people would not realize it was of any advantage to them. If somebody
comes in and spends a dollar with you, and you give them two cents
discount, what is it to them? It is nothing at all! But if you give them
_trading stamps_, those have a _real_ value in their eyes."
"Then why couldn't I give trading stamps of my own--just have them
printed and give them out?"
"Because _every_ trading stamp concern in the country could beat you on
the value of _your_ premiums. Think of the _tremendous_ buying power
that we have. It would be _absolutely_ impossible for you to give
trading stamps of your own and have _any_ chance with competition. Now,
I don't think for a moment that you are not as keen a business man as
the next fellow, but the big concerns realize that it is
_specialization_ that means success, and we have simply specialized in
this one branch of marketing to help _you_ fellows do something which
you could do yourselves, but not _nearly_ so effectively or cheaply as
we can. Do you think the big department stores up and down the country
would have trading stamps from us if they _could_ handle them as cheaply
themselves? No, of _course_ not!"
"Well," here broke in Fellows quietly, "I may be mistaken, but I believe
that trading stamps are an outgrowth of inefficiency and laziness on the
part of retail merchants. Of course, the people who sell trading stamps
get value for their money, but the retailer and the consumer both pay
for it. The retailer pays for it by losing, let us say, three per cent.
on each turn-over of his stock investment. Suppose Mr. Black here turns
his stock over five times a year, he is really paying fifteen per cent.
of his investment to you people for something which you must admit is
not exclusively his. Do you think it is possible for a retail merchant
to continue that and live? If it is, he might spend that fifteen per
cent. in increasing the quality of his store service rather than to pay
it to an outside organization to supply a substitute for it. One thing
is sure--no merchant can pay fifteen per cent. on his investment and
stand that expenditure himself. If he handles the stamps, why, up go his
prices, wherever he can manage it, to make the consumer pay for them.
"I am sure you will agree with me that in the end it is the consumer who
pays the freight. This whole proposition looks to me like selling a man
a sack of flour, and then making him pay for the sack of flour and a
half dozen collars or a pair of suspenders besides. He doesn't want
those collars or suspenders, mind you, but they are included with the
purchase price, and, whether he takes them or not, he has to pay for
them."
Bulder leaned back with a patronizing air. "My young friend," he said to
Fellows, "you talk _very_ interestingly, but the things you say are
_mere_ generalities. You have not given a _single_ concrete fact showing
where the trading stamps would hurt our friend here, while I have
_already_ given Mr. Black a _number_ of cases, which he can easily
verify for himself, of merchants who _have_ improved their business by
trading stamps.
"My proposition to Mr. Black is that he tries the stamps for a year, and
if he does not find"--and here he tapped the table impressively with his
fingers--"if he does not find that they have _actually_ increased his
business, why then we will call the deal off. We will risk--_gladly_
risk--all the _heavy_ expenditures of working with Mr. Black. We will
risk the lost prestige to ourselves of having a dealer give up our
_splendid_ offer; and I do this, Mr. Fellows, because I _know_ from past
experience--not from mere theories--that Garter stamps will mean an
_increased profit_ to Mr. Black."
"Would you supply any other line of business in this town, Mr. Bulder?"
asked Fellows quietly.
"Certainly, my young friend. Because by doing so it would _help_ Mr.
Black. Don't you see that, if one hardware man, and one druggist, and
one dry goods store, and so on, had our stamps, _all_ those merchants
would be in a class by themselves? It would make them the _leading_
merchants in the town, for people would trade with them so that they
could collect the Garter stamps."
"I see," returned Fellows quietly. "And the man who gets stamps here
from Mr. Black would be able to buy, let us say, a hat or some china
ornaments through you people, which would, incidentally, deprive the
local men's furnishing store or china store of the sale of those
articles. And, of course, that same man might get trading stamps from
other stores, and with those stamps he could buy a pocketknife through
you people, and thus take the sale of that pocketknife away from Mr.
Black."
Bulder waved the question aside as though not worth bothering with. "My
dear man," he asserted, "the people who get things for those trading
stamps get things they would not buy otherwise. That is surely a _very_
trivial contention."
Fellows looked at me and said:
"Black, I have no reason to take any more of yours or Mr. Bulder's
valuable time, as I see nothing else to say except that I strongly
advise against the adoption of this or any other trading stamp or
profit-sharing scheme which you do not control yourself. Of course, a
few merchants in a town can get together and run this trading stamp
system, whereby your stamps are accepted for cash in other stores and
other stores' stamps are accepted for cash in your own, and by that
system there might possibly be some benefit in the trading stamps. But
I believe that any merchant who uses trading stamps--and I do not refer
to your excellent company, Mr. Bulder--is merely building up business
for some outside organization. He is merely diverting some of his own
profits into the pockets of the trading stamp concerns, which do not
really build up any business at all; because, if the stamps prove
successful for one merchant, it will not be long before other merchants
take them up and then every one is giving profits to the trading stamp
concerns without any of them getting any real benefit from it. I believe
the use of trading stamps is more or less an admission of inability to
think up plans of getting business for oneself."
Bulder smiled. He was once again the acme of courtesy.
"That argument of yours _sounds_ excellent, Mr. Fellows," he said
suavely. "Excellent! But why not apply it to _your_ business? Why not
say that if one merchant advertises, _all_ merchants will advertise and
thus the benefits of advertising are nullified?"
Fellows was once again beaten down, I thought. He was plainly stumped
for a few seconds. Then he replied:
"There is something in what you say, Mr. Bulder. But with trading stamp
competition every one is offering merely trading stamps. There is no
particular difference between them, and one offers no material advantage
over another. But advertising is different. You yourself admit that, and
appreciate the benefits of advertising, for in your own printed
matter"--and here he held some of it up--"you advise the merchant to
advertise the trading stamp proposition, 'thus'"--he quoted from a
folder--"'tying up the prestige of the Garter trading stamps with the
local merchant's own store.'
"Now, while in trading stamps there is no apparent difference, with
advertising one can express one's personality and character, which
trading stamps never do. There are so many ways in which one may
advertise: newspapers, billboards, booklets, form letters, street car
signs; and you can make your advertising such that it will be better
than your competitors'. But trading stamps are trading stamps and
nothing more. The story of advertising is as varied as language itself.
With advertising you can vary the appeal so that it always has a
freshness which trading stamps must soon lose."
Bulder was plainly perturbed.
"I claim," he said heavily, "just the _same_ distinction, that _same_
personality--why, the very _dress_ of our trading stamps is an
advertisement, just as is the design on those Kleen-Kut tools I see
displayed there. They are well-known, they are recognized by the
trademark, and that is their individuality. Our trading stamp has the
_same_ individuality--it has our peculiar design and trademark."
"I am unconvinced," said Fellows, shaking his head with finality. "Your
arguments sound excellent, but the fact remains that once a dealer takes
on trading stamps it is difficult for him to get rid of them. People
come in and ask for the stamps--"
"Good night!" I thought. Bulder was quick to respond.
"Of _course_ they come and ask for the stamps. And if we offer these
stamps to other dealers, and then people come to Mr. Black and _ask_
him for them, and find he doesn't have them, won't that _hurt_ Mr.
Black? Won't they say that Mr. Black isn't as _progressive_ as other
people? If the people _demand_ trading stamps, it is up to Mr. Black to
give them, for, if he is not progressive enough to do so, he will
_drive_ them to some other store."
"I take strong exception to your words," said Fellows evenly. "I don't
appreciate your slur on the 'progressiveness' of my--of Mr. Black."
"I _beg_ Mr. Black's pardon. I spoke hastily. But you must admit, Mr.
Black, that the unreasonableness of your friend _is_ exasperating."
Fellows ignored the last remark. Apparently to no one, he mused:
"I remember in the little town of Wakeford some of the merchants there
got this trading stamp 'bug.' First one got it, then another, and then
they were all giving trading stamps--that is, all those who did any real
business. And then one of them thought he would steal a march on the
others, and began giving double trading stamps on Saturday. In two weeks
they were all giving double trading stamps on Saturday. It has got so
now that they are giving double stamps every Friday and triple stamps on
Saturday! I suppose before long they'll be all giving double stamps
every day of the week. Pretty tough on those merchants, isn't it?"
Bulder looked at Fellows with some amazement in his face, for Fellows'
remarks were not apparently addressed to either of us; he was gazing
through the window of the door leading into the store.
"Pretty tough on those merchants," Fellows continued, "because, when
they give double trading stamps, they increase their percentage of cost
on their capital from 15 to 30 per cent. assuming they have a 5 times
turnover. Of course it's all right for the trading stamp concerns,
because the more stamps that are sold, the more profit they make.
"By the way, Mr. Bulder, do you sell stamps in Wakeford?"
"Why, yes, we do sell some," was the reluctant response.
I saw the point at once, and instantly I made up my mind that I would
not take the chance of being drawn into a war of giving trading stamps
away in competition with other stores, and I quietly told Bulder that we
were merely wasting time now, that I had definitely decided not to touch
the proposition at all.
Bulder shrugged his shoulders. "I am _sorry_ that you let this
opportunity go by. But _please_ don't come to us in a few months' time
and ask to do business with us, for we shall _unquestionably_ close with
some other hardware store before I leave town to-day."
He was once more the suave and polished man of the world. He shook hands
pleasantly with us, cracked a joke or two, and left the store,
apparently in the best of humor.
Hardly had he gone out when Fellows went to the telephone and called up
Mr. Barlow. I don't know what Barlow said, but I heard Fellows say:
"This is Fellows of the Flaxon Advertising Agency. I am at Dawson
Black's. We have just had the Garter Trading Stamp man here. You knew
that Black was thinking of taking up the trading stamp proposition.
Well, he has turned it down cold. I thought you might like to know, in
case they came to you with a different story."
There was a meeting of the Merchants' Association that evening--I didn't
tell you that I had joined sometime before. As I entered the meeting
room, Barlow came to me and told me that Bulder had been to see him, and
had told him that I was interested in his proposition but he felt that
Barlow would be the better man for them to work with.
Barlow brought the matter of trading stamps up for discussion at the
meeting, and it was decided that no member of the association should
handle them.
"What would we do if some merchants in the town, who are not members of
the association, should take them on?" I asked.
I saw a twinkle in Barlow's eye, for he knew I was thinking of Stigler,
who was not a member of the organization.
"I should think," said Wimple, who was the president, "that we had
better not try to cross that bridge until we come to it. The leading
merchants belong to the association, and I question very much whether
the fact that some small store might handle the stamps would have any
effect upon us, one way or the other."
I hoped and believed that we had killed trading stamps so far as our
town was concerned, but I determined that, if ever the question was to
come up again, through some of the others taking up stamps, I would
suggest that idea of Fellows', that we form a trading stamp organization
of our own, which the association could run. In other words, the
Merchants' Association would be the trading stamp concern, and so we
would have any benefits coming from it ourselves.