Trading stamps
Sir: We should be grateful for the op-• portunity to correct the errors of fact included in Mr Stewart's article (July 13).
He states that "credit cards are the natural allies to trading stamps." Nothing could be further from the truth. Basically, trading stamps are given by retailers in order to encourage customers to spend more money with them and to pay cash. They cost the retailer approximately 21/2 per cent of this turnover this is also the average value of the goods which the retailer's customers can redeem for their stamps.
The credit card on the other hand is alleged to cost the retailer between 3 per cent and 5 per cent of his turnover which he agrees shall be deducted by the bank from the amount due to hjm.
There is no truth in the statement that the stamp companies are helping themselves to the consumers' money. The Consumers' Association have shown time and time again that retailers giving Green Shield trading stamps charge some of the lowest prices in the country for their groceries. With maximum petrol prices fixed by law in all garages in the country, most garages are charging exactly the same price for the grade of petrol bought, whether they are giving Green Shield Stamps or whether they are not.
Trading stamps do not turn "buyers into borrowers" Green Shield retailers will testify that 99 per cent of their business is conducted in cash and most garages are very happy to give perhaps treble or even quadruple quantities of stamps accordingly.
The price of stamps is not hidden. Stamp-giving shops give a worthwhile discount across the board on every item they sell, attract more custom than other stores and do more turnover per square foot than their competitors with the result that their overhead fixed costs are spread over a very much larger turnover and gross profit.
Prices do not need to be any higher the saving is purely and simply on the reduction in overheads per 6100 of turnover. That is how Green Shield customers can be quoted as amongst the lowest-priced stores in the High Street and still show an extremely high profit before tax.
L. G. Ablitt Corporate Services Director, Green Shield Trading Stamp Co. Ltd., Green Shield House, Station Road, Edgware, Middlesex.
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