The Green Shield Stamp Story

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0:54Thanks for listening to A Long Time in Finance with Jonathan Ford and Neil Collins.

1:03Hello and welcome back to A Long Time in Finance. Now, we've been musing over the many similarities between our present situation and the 1970s. And just this week, we're recording this in late August, there's even talk of Rachel Wees having to go to the IMF for a bailout, just like Dennis Healy did in 1976, a story we covered earlier this year in our episode, The Year Britain Went Bust. So we're thinking about the most 1970s story we could possibly come up with. And what we came up with was Greenshield stamps. Now you remember them, Neil.

1:40Jonathan: I'm afraid I do, only too well. You probably have a glass tumbler or two in your kitchen that came from a Greenshield catalogue. Or a half-filled book rotting away in the back of a drawer somewhere. Now, of course, if you're under 50, you've probably never even heard of Greenshield stamps, as they pretty much disappeared in the 1980s. But there's actually a fascinating retail story about them, which we thought we'd try to tell. And to do so, we're joined by Lee Sparks, Professor of Retail Studies at the University of Stirling. Welcome. Good to have you. Good to be here. So I had these incredibly strong memories of Greenshield stamps as a child and how my parents collected them, I think mainly from petrol stations, and then swapped them for sort of things like glass tumblers and other whatnot.

2:27But let's start by setting the scene. When did they start and where did the whole idea come from? The idea of Greenshield Stamps in the UK came from a guy called Richard Tompkins. Richard Tompkins had visited the United States in the late 50s and launched Greenshield Stamps, copying a Sperry and Hutchinson operation from the United States. He launched it in the UK in 1958. And Greenshield Stamps developed from that through the 1960s and went on through the 1970s. And as you said, in the 1970s and early 1980s, that's when it finally failed. So an operation that really at its peak was probably 63 through to about 77.

3:13But a few years either side of that is as the company started and then as the company got wound down. So that was the golden age. But tell us a bit about Mr. Tompkins. He's not by background a retailer, is he? He's a printer. Yeah, he seems to. I was born in London in 1918 and was a printmaker. His father was a chauffeur for a manufacturing operation. So not from any great background or any great retail background, but he seems to have visited the States, say, in the 1950s, been impressed by a few operations that he saw in the United States. He used perhaps some of his printmaking contacts and operations to think how you might use stamps and use things to develop the Green Shield stamp business.

3:59An interesting character who then went on to a very interesting career in a number of different ways, as I'm sure. Yeah, we'll come to that. I mean, he went into the printing trade. It struck me that maybe when he went to the United States and he saw these stamps, I think it was in Chicago, he might have thought, no, I wouldn't mind printing a few of those. That must be a good business to be in. Yeah, and stamps in the United States had been around for quite a long while. And Sperry and Hutchison were big operations. There were others as well. So he saw an operation that we had little bits of in the UK, certainly in the interwar period, but nothing anything on the scale.

4:38And we have to think about the time, I think. If we think about the 1950s in the UK, Then the British government was very keen to, as we came out of the post-war situation, was very keen to improve productivity, very keen to bring modernisation to a whole series of sectors across the UK. Okay, so let's explain how Green Shield stamps worked and what drove them. Because they're really, if you like, a loyalty scheme, which is designed to appeal to retailers because it's a way of luring customers through the door. Yeah, again, the context of the 1950s is probably worthwhile thinking about. So manufacturers primarily set the price of products, and retailers couldn't compete on the basis of price.

5:22It's not true because all products were over large segments of that. And that was something that some of the retailers and the entrepreneurs in particular really rebelled against in many ways. And we're trying to find ways of competing, not on the manufacturer's terms, but on their own terms. So it's a very restrictive operation in many ways. And Greenshield Stamps fit into that because what they're offering is an opportunity to try and build loyalty for the retailer. So it attracts customers because they're getting something for nothing as one of the adverts. said. So some sort of reward. So you would spend money in the retailer.

6:00You would get Green Shield stamps. You'd stick these Green Shield stamps into a book. And once you'd got enough books, you'd go along to the Green Shield stamp redemption center and you'd trade your books in for a product. And that product could vary from a small piece of cutlery, local gadgets for the kitchen, through to television, speedboats and Ford Cortinas, if you could get enough books. We'll come to that. Several lifetimes required. You need a library of Greenshell stamps to get a Ford Cortina. Yeah, and that's one of the issues around them is that they give a reason for consumers to come back to retailers.

6:36So retailers began to like that as a way of driving a differentiation point. And in the catalogues with the 1 ,200 or so items that Greenshell stamps had in the catalog, some of those are everyday items, and that's what people mostly redeem their books for. But there are aspirational items in there as well. There's also a sense, isn't there, that they are things that you wouldn't necessarily go into a shop and buy for yourself. It's that something for nothing thing. You feel, oh, I've collected my thousand books of Green Shield stamps and I'll now get a colour television. Now I've got these Green Shield stamps, I can get something which I wouldn't otherwise have been able to buy or would have wanted to spend the money on.

7:16Yeah, again, we're at a period where credit cards are not a common way of doing things. Money is very much weekly basis for weekly pay systems. Affluence is growing and consumer goods are growing, but it's not at the level of consumer society we see in the 1980s and onwards. And so there is that sense of if you wanted something, you had to save up to it. And this was an opportunity to save up using stamps rather than using money. I think it fits into that changing period and that changing times that we've got in the 60s and 70s.

7:49Jonathan: It was fantastic for the issuer of the stamps, of course, because they were terribly fiddly little things. Even if you didn't lose the books that you put them in, it was a real pain trying to stick them in and making sure that you'd done it properly and there were no blank pages. And the thing really looked at in retrospect was asking for the consumer essentially to waste the reward because it was so difficult to keep up, especially if you were going to do anything of any size. If you think about how the Greensfield stamps would have made money, then they make money through the printing and sale of the stamps.

8:31So clearly that's one way of doing it. In terms of the products that consumers get, because there's a relatively limited range, they can buy in bulk and therefore they can get a margin on the products they've got. But as you rightly say, because a lot of the stamps are not redeemed, the retailers have paid for them, but the stamps don't get redeemed. They make that margin in that area as well. And because they get cash up front and they don't have to pay for the products until they're actually redeemed, they actually can invest that money as well. So from our stamp operation and from Greensfield Stamps, there's various ways of making money as a part of that business.

9:09From a retailer point of view, it's all about driving that return business, repeat business and loyalty that comes through. I did a bit of work to look at a worked example of how the scheme operated. And so I've taken the 1965 catalogue. You've got a stamp, obviously, for every sixpence, which is two and a half P in decimal money you spent. So technically you had to spend£32 to get a book full on groceries, petrol, whatever. which is a lot in the mid-60s, I'd have thought. That doesn't happen overnight. And in 1965, the top gifts included a region tone 19-inch television set for which you required 88 books, which if you do the£32 calculation means you had to spend£2 ,816 on stuff to get the stamps to get the television.

10:02Now,£2 ,816, you will know better than me, Neil, is considerably more, I think, than the average income in 1965 in the UK.

10:09Jonathan: Oh yes, an enormous sum of money. And the televisions were very exotic, expensive devices in those days, and pretty ghastly too. The programmes were better. Well, I looked up how much a region-tone 19-inch television set would have cost you if you'd just gone into the shop in 1965, and it would have cost you about £100. So that£2 ,800 that you are spending on goods to get a£100 television set gives you a sense of the kind of multiple you have to spend in order to get the chance to redeem them. And as you yourself pointed out, Lee, no doubt our friends at Greenshield Stamps are not paying£100 for the television set.

10:50They were paying considerably less because they were buying a heap of them. But the one I particularly liked was the Silver Cloud motorboat, which you could also get in 1965, for which he required 170 books, which is 217 ,600 stamps, representing a spend of£5 ,440 on groceries and petrol, which apparently was the cost of a very large detached house at the time.

11:17Jonathan: And certainly a good deal more than the annual average wage. I'd be fascinated to know how many silver cloud motorboats were ever redeemed in a Greenshield shop. I don't think we need to concern ourselves about that. I think we all know the answer. So, Green Shield Stamps, they're going into local grocer's shops and little kind of multiple retailers, newsagents, as well as bigger stores. Is that right? If you look at the history of Grainschial Stamps, starting in 1958, it's independent businesses that really dominate the business for quite a while. And it's only in 1963 that you see Tesco coming on board and changing the operation really for Grainschial Stamps and becoming their big client business.

12:00And also, obviously, we had the petrol stations. Indeed. And again, a lot more independent petrol stations, of course, at that point, in the same way as have independence of the chains of petrol stations coming, but not to where we think of them now. Tompkins' business does incredibly well, obviously. It picks up lots of custom by 1963. It's not just local stores, it's Tesco's who are issuing them. And unsurprisingly, other people who are interested in this sort of business, notably the people who nicked the idea off from the United States, Sperry and Hutchison, start to think, damn, we missed a trick here.

12:31We should have gone to the UK. So they do. So there's a bit of competition that starts to come in. Stamps were around. People knew the American model. And the multiple retailers, the larger retailers, the Boots, the M &S, the Sainsbury's, the Tesco's, Finefair of the world, got together in what seems to be about early 60 and said, we're going to have a collective decision. We're not going to have stamps. Self-defying ordinance, we will not do it. Lots of rumours swore around during this period, around will someone break it, won't someone break it, and Finefair broke it and said they were going to break it by going with Spurrier and Hutchinson.

13:10But of course, Spurrier and Hutchinson, who had green stamps in the States, couldn't have green stamps in the UK because green seal stamps had got there with green stamps in the UK. So that's where you get the pink Spurrier and Hutchinson stamps. And when they said they were going to break the ordinance, Tesco moved in very quickly. And that really broke the dam of the restriction. So other retailers followed. But equally, other retailers reacted very badly to it. Sainsbury's in particular, seeing it very much as a dishonest gimmick. That was their phrase about stamps, seeing it as a bribe to consumers.

13:45And they fought long and hard to stop stamps coming to the UK, which led us to the Trading Stamps Act of 1964, which put some restraints on trading stamps operations.

13:56Jonathan: The thing that I think you mentioned a moment ago, resale price maintenance. One of the few good things that Ted Heath did when he was in charge was to force the abolition of resale price maintenance against a huge vested interest. And I suspect that was the thing that essentially hold Green Shield stamps below the waterline, even though they carried on for some time afterwards. If you look at the early 1970s, the abolition of resale price maintenance earlier than that allowed more price competition. It took a long while to come through. It wasn't quite as straightforward as perhaps Ted Heath had thought it might be, but it worked through that way.

14:44But when you get to the early 70s, you've got the Arab-Israeli war, you've got the OPEC oil embargoes, you've got the three-day week, you've got the miner strikes, you've got inflation rising quite quickly. And price becomes much more of a driver for customers. And once you start getting price as the driver, collecting stamps, and as inflation goes on, you've got to have more stamps. So you get double stamp days, triple stamp days, quadruple stamp days. the value on the stamp has to be 40 times. Like the Weimar stamp. Well, yeah. How much time am I spending sticking these things into these books and remembering to do it becomes a bit more important as opposed to the price of the product.

15:26And I think that begins to set the seal for the decline of green shield stamps. But before we get to the decline, I mean, the interesting thing to me is that they found different uses. And you can see why this might have worked in the 1970s. so in his book heroes of the high street john timpson i think former chairman of timpson's shoe shops he points out that in the 1960s timpson shops offered sperry and hutchinson pink stamps to their employees as a bonus scheme basically instead of using cash incentives because there was apparently a little bit of a tax wheeze they would issue them with green or pink stamps in this case.

16:04And he says, rather tragically, the management team couldn't do the maths right. So they gave away so many stamps that the Timpson employees ended up furnishing half their houses with pink shield stamps. And Timpson ended up with an enormous bill from Sperry and Hutchinson. From a green shield stamp or from Sperry and Hutchinson operation, the more channels you can get stamps into customers' hands, the better for them. And therefore you can imagine why they might do the business-to-business as well as the business-to-consumer demands. So let's turn to the 70s when things start to go south. Partly, I suppose, you know, inflation, setting aside the need for more and more stamps and even larger libraries of books to buy anything.

16:49Jonathan: Of course, the ones that you had would be getting progressively less and less useful. The Weimar period of greenfield stamps, I think they'll have to call this. When people are stamping extra zeros, it's also basically a time of a huge consumer squeeze because prices are going up faster than wages some of the time there are also all sorts of energy costs are rocketing borrowing costs are incredibly high so presumably the kind of gross margin that had allowed the retailers to decide it was a fantastic deal to spend whatever it was they were spending to buy stamps for their customers to have, they couldn't really afford it.

17:28Yeah, indeed. Retailers were looking at their operations and were looking at what customers wanted as well. And Tesco were really the key part of Green Shield Stamps. Figures vary, but a big percentage part of their business. So the Tesco operation was important to Green Shield. And Tesco were in a bit of turmoil in the late 60s, early 70s. Very acquisitive, buying chains, putting them together. a new management team as well as the old management team thinking about things. And they decided to trial a couple of small supermarkets that didn't operate Green Shield Stamps but actually did price discounts and prove to themselves that that was a better way of doing things than having the Green Shield Stamps operation.

18:12And that set the scene for Tesco considering whether or not Green Shield Stamps should be continued or not be continued, which ended up with a major boardroom battle in the 1970s. 77, which led to Operation Checkout, which I still think is probably the most important grocery retail-ish event in the late 20th century. Before we get to that, what about credit cards? How do they change things? Credit cards and the use of plastic. So the first cash point is what, 1967? So you've got the ability for consumers who were becoming more affluent over the period, despite the general cycles we have, access to money in different ways becomes easier.

18:56It's not having to have higher purchase, which was the early 60s. You've got the credit card operation. So that becomes more common. So people could buy stuff on credit more easily than they could do before. And then they've got access to cash in different ways. So cash and credit and money begin to become more important than collecting stuff. And so it frees into that, I think. Green Shield Stamps is part of a kind of mentality which says you have to save for things in order to get them. So you expect to spend a year saving up for your region tone 19 inch television set. But with a credit card, you don't have to bother with the waiting and anticipation.

19:34You can just go in and borrow the money and get the set straight away. Yeah, that period is the beginning of that immediate consumption that we now lived through over the last few decades. It's the beginning of that process. And I think we see that change happening. Now, we should come to Operation Checkout, which, as you say, is a watershed moment, not only for British retailing, but it's definitely a watershed for poor old Richard Tompkins and Greenshield Stamps. Because, as you say, this is their biggest customer. And in 1977, Ian McLaurin, you remember him, don't you? He was the new managing director of Tesco.

20:10He decides to spend four days shutting the stores at the height of the jubilee in order to basically go around removing, pulling out the Green Shield stamp machines or whatever they were and putting price discounts throughout the store. So end of Green Shield stamps in with price competition. Now, as you say, Lee, tell us a bit about the ructions within the board of Tesco about this decision. Green Shield Stamps had been pretty successful for Tesco in terms of publicity, in terms of the business. But as the company wasn't in the best shape, it had lots of different bits. It was trying to pull them together.

20:48The old guard with Jack Cohen and Cora, the family, were wedded to operations and being entrepreneurial. The new team, Ian McLaurin being the leader of that new team, was very much about systematizing the business, being much more structured around the business. and the proposal went to the board to get rid of Greenshield stamps. It was coming up for renewal. Would they renew it? Wouldn't they renew it? And McLaurin led an operation to say we should get rid of it. And at the board meeting, it originally tied 5-5 in the vote to get rid of them. But then McLaurin pulled out of his pocket a proxy vote from an absentee member of the board of directors.

21:27And the comment in the vote was, I can't stand the sticky little things, get rid of them. And so McLaurin and the New Guard won the battle and that led to the Operation Checker, operation which you described a minute ago. As history will show, it didn't go wrong, though quite how well it went right, I think, is in moot point. But Greenshield Stamps at that point lost their best customer. And for Greenshield Stamps and that sort of collecting of stamps, that staggered on for a few years, but disappeared. 83. They finally suspended sales, revived it in 87 for reasons that are not clear, and then shut up for good in 1991.

22:05Sad end to that particular venture, if you're a green shield man, but basically not the end of the story, because there is a postscript. This is the second part, I suppose, of the Richard Tompkins story is that he finds a new use for these shops in the early 70s, when they're beginning to drop down from their peak. Tell us a bit about the second coming of Richard Tompkins and his other brilliant idea. The interesting thing about Richard Tompkins is that if you were looking at a retail hall of fame in the UK, he'd have two entries. Because he'd have an entry for Greenshield Stamps, as we've just been talking about, but he'd have a second entry for the Argos operation.

22:45Argos began with Richard Tompkins in 72, and then in 73 launching an Argos catalogue and launching a catalogue showroom that we know all about in terms of Argos in 73. And using some of the Greenshield stamp sites for some of the early Argos stores and having a mix and match approach, they would eventually in the first five years or so of Argos take Greenshield stamp books into the Argos things. You could redeem them for cash in those. But he set up the Argos business and ran that through to 1979 when he sold out. But it's, again, if Greenshield stamps are an iconic element in the psyche of customers.

23:26Argos has this enormous brand in the UK that has transferred through the catalogue operation, the catalogue showrooms, into the online business. And again, Argos, a tremendous legacy for Richard Tompkins. But once again, another brilliant idea he has on holiday. I don't know, he's obviously, does a lot of his thinking on the beach.

23:47Jonathan: Wonderful excuse to take another holiday, I suppose. Argos is the place he was staying in Greece. Yeah, I do wonder about that because he'd been to the States a few times and he'd seen catalogue showrooms operating in the States. So I wonder whether the name came from while he was lying on a beach in Greece. I don't know, but it's a nice background story for it. Clearly, the fact he got the thinking right and then developed it is testimony to his return. And unlike Green Shield Stamps, I mean, I think it's worth saying Argos is an enduring legacy of Tompkins in that you mentioned he sold it to BAT in 1979 for£35 million, which is around£175 million in today's money.

24:29So he had a nice retirement. Argos is still going, inflated on the stock market in the 1990s and was bought by Sainsbury's, the people who didn't like green shield stamps, for£1.4 billion in 2016. So the story has a happy ending for him. But sadly, he died in 1991. But I think you found that he established a trust which gives a lot of money to health charities, which is still going pretty strong now. After he'd sold out of the Argos business, he set up the Tompkins Foundation. His wife was involved in that as well, as is one of the trustees. And they invested into that a chunk of the money they'd made and shares that they had.

25:09And that has been a very successful charitable trust over that period of 40 odd years. So he's had a tremendous legacy of using his money for good. Greenshield Stamps obviously doesn't survive beyond 1983. I'm interested in your views both on its own sort of impact during its life, but more importantly, you know, the concept of loyalty cards and incentives and what have you hasn't gone away. And to what extent, if you think about the Tesco Club card or the Nectar card, to what extent was Greenshield Stamps kind of, you know, the progenitor of these ideas? I think collecting things has been a longstanding operation.

25:54Cigarette cards. I know of grocers who gave away other cards about cakes and recipes and things like that in the very early part of the 1900s through to 1940 or so on. I think Greenshield stamps made a difference because it tended to nationally make that statement as opposed to lots of things that are quite local. And it's the first time we see a retailer that's really heavily involved in that if you exclude the cooperative dividend. And therefore, it is directly tied in with that idea of loyalty. And when we see the modernization of loyalty concept, I think there is a link back to that. Tesco in the early 1990s set up Club Card as part of a massive innovation wave, really, which has driven them to the market dominance they have now.

26:42The Tesco Club Card was perceived by Sainsbury's at the time as just being a gimmick again and being electronic green shield stamps. And I think that tells you something about the attitudes of those two businesses. They got it wrong, I think, with trading stamps in the 60s, but were still getting it wrong in the 90s because they hadn't really seen what loyalty can do. Now, the difference between club card and green shield stamps is you don't get much information about the consumer about a green shield stamps. They get them from anywhere, they redeem the book. With a club card, you get that information about the customer, you get that knowledge.

27:18And if you can use that knowledge to change your business, you've then got a fabulous resource. And then you can start personalizing the rewards, which is what we see from the loyalty schemes now. So there is a link between there about loyalty. And in one sense, whilst they disparaged Clubcard as electronic Greenshield stamps, there's an element of truth to it. It's that idea of collecting stuff and collecting points, so being rewarded for it. The difference is the electronic part is where the retailers can really leverage that knowledge and use that knowledge. I gather, by the way, that you have a full set of all the Argos catalogues ever issued.

27:55Yes, we got donated some and we then built up the, filled in the gaps and added to them. So I have all of them in a drawer. It's the only collection outside the company in the UK, I believe.

28:10Jonathan: So it's a treasure trove, really, of British social mores. Exactly. And if I try and think what a Tesco store was like in the 70s, what you generally get are a couple of photographs and a few odd bits a piece you don't know what the products are you don't know the pricing you don't do any of the detail with Argos you know all of that and you know how it's changed over time so they are interesting social artifacts they tell us about the cultural history of the UK the social history of the UK and the retail history of the UK and I find that fascinating a few years ago I did employ a student to do some work on a particular sets of products within there to look at changing prices and she came to me and said, I really don't understand what this is.

28:53And it was an electronic product. And it said, comes with a plug. And I can remember when products didn't have a plug and you had to wire the product. And when I explained that to her, it was, you have got to be joking. People actually did this. And I think that's a good example of the way in which the world has changed in all sorts of different directions.

29:24Jonathan: Comes with a plug. I love it. If you were ranking Richard Tompkins in his impact, where would you put him in the pantheon of British retailers? I think he's really important. The fact that people still recall that Greenshield element, and it did change a lot of behaviours, but the Dargos is still enduring. So he's well up there in terms of people who have changed retail. His name is hardly known. Even at the time, it wasn't popular. So why do you think that is? He seems to have been quite an unassuming man. He doesn't seem to have been publicity-seeking, and therefore he isn't known, as you say.

30:00And yet the businesses were really, really important. Well, I like to think that on this podcast we've done something to rehabilitate his name in the mind of the British public.

30:15Jonathan: That was Long Time in Finance with Jonathan Ford and Neil Collins. Production and editing by Nick Hilton. Please rate and review it on your podcast app.