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.