CLOSE

Why Are Coupons Worth 1/100th of a Cent?

The next time a coupon shows up in your mail, take a look at the fine print. There’s a pretty good chance it will read something to the effect of “Cash Value 1/100th of a cent.” Why in the world is that writing on there? And are 10,000 copies of this coupon really worth a whole dollar? Let’s take a look at this coupon quirk.

Putting a Stamp on Customer Loyalty

Before we can answer the coupon-value question, we need to take a peek into a seemingly unrelated footnote in the history of commerce. Let’s talk about the mostly forgotten practice of businesses handing out trading stamps with purchases.

Trading stamps first found their way into merchants’ registers in the 1890s. When customers made a purchase, stores would given them stamps that reflected how much they had spent; a common exchange rate was one stamp for every dime spent on merchandise. Once a customer had saved up enough stamps – often over a thousand – they could swap them for something from the stamp company’s catalog, like a toaster or a clock.

The trading stamps were a runaway success. Supermarkets, gas stations, and department stores would advertise that they gave away a certain brand of stamps to help lure customers in, and the customers could then lick and paste their saved stamps to get “free” merchandise. Everyone was happy, and the system flourished. At one point in the 1960s, S&H Green Stamps printed more stamps each year than the Postal Service did. The circulation of the company’s catalog topped 30 million. The big stamp makers like S&H even built brick-and-mortar “redemption center” stores around the country.

As any economist worth his cost function can tell you, though, the toasters and vacuum cleaners that customers got weren’t free at all. Merchants had to pay for the stamps they gave away, and the cost of the stamp obviously got passed along to the customer in the form of higher prices.

Even in the early days, it didn’t take long for customers to figure out that the system wasn’t quite as rosy as merchants made it out to be. By 1904 New York had enacted laws that forced stamp makers to put a cash face value on each stamp that would enable consumers to bypass catalog redemptions and get money back for their stamps. Other states followed suit.

As one might guess, the individual stamps didn’t get princely face values. A 1904 New York Times piece noted that most stamp makers were given the value of “one mill,” or 1/10th of a cent. That valuation meant that a customer with a full book of 1,000 stamps could redeem it for a dollar. The same piece noted, though, that a customer who used the stamp makers’ catalogs could probably get an item worth three or four dollars for the same number of stamps, so the cash-redemption idea never really took off with most shoppers.

What happened to trading stamps? Their popularity peaked in the 1960s when nearly 80 percent of American households saved stamps, but within a decade the craze had died. Manufacturer coupons that shaved money off of items’ prices became more popular as inducements to get shoppers into stores, and the fuel crisis of the early 1970s sapped away the stamps’ large market at gas stations.

So What Does All This Have to Do With Coupons?

At first glance, coupons and trade stamps wouldn’t seem to have all that much in common. After all, coupons lower the price of an item, while the beef with trade stamps was that they passed a hidden (and often unwanted) cost along to consumers. But some states legally lump trade stamps and coupons in together, so coupons distributed in these states have to bear some printed cash redemption value.

According to the Association of Coupon Professions, only three states require this declaration of redemption value: Indiana, Utah, and Washington. Since many coupons are designed for national distribution, though, the redemption value ends up printed on all of them. As with the old trade stamps, it doesn’t really matter how infinitesimal the stated value is as long as it’s not zero. Thus, you see coupons that are worth 1/10th, 1/20th, or 1/100th of a cent.

So Can I Round Up 20 Coupons and Get a Penny?

In theory, yes. It’s hard to find reliable, concrete examples of someone schlepping in a hundred coupons to swap them out for a penny, but the web is full of anecdotes in which people “test the fine print” by trading in a giant stack of coupons for their face value at the supermarket. In all likelihood, though, you’d need to mail the coupons to the issuing company, which is a pretty lousy financial proposition given the price of stamps.

If you’re sitting on a big pile of Shake N Bake coupons, you might as well give it a try; your supermarket will probably gladly surrender a penny to ensure you don’t make a scene.

nextArticle.image_alt|e
CHRIS JACKSON, AFP/Getty Images
arrow
Big Questions
Why Does the Queen Have Two Birthdays?
CHRIS JACKSON, AFP/Getty Images
CHRIS JACKSON, AFP/Getty Images

On April 21, Her Majesty Queen Elizabeth II will turn 92 years old. To mark the occasion, there are usually a series of gun salutes around London: a 41 gun salute in Hyde Park, a 21 gun salute in Windsor Great Park, and a 62 gun salute at the Tower of London. For the most part, the monarch celebrates her big day privately. But on June 9, 2018, Her Majesty will parade through London as part of an opulent birthday celebration known as Trooping the Colour.

Queen Elizabeth, like many British monarchs before her, has two birthdays: the actual anniversary of the day she was born, and a separate day that is labeled her "official" birthday (usually the second Saturday in June). Why? Because April 21 is usually too cold for a proper parade.

The tradition started in 1748, with King George II, who had the misfortune of being born in chilly November. Rather than have his subjects risk catching colds, he combined his birthday celebration with the Trooping the Colour.

The parade itself had been part of British culture for almost a century by that time. At first it was strictly a military event, at which regiments displayed their flags—or "colours"—so that soldiers could familiarize themselves. But George was known as a formidable general after having led troops at the Battle of Dettingen in 1743, so the military celebration seemed a fitting occasion onto which to graft his warm-weather birthday. Edward VII, who also had a November birthday, was the first to standardize the June Trooping the Colour and launched a tradition of a monarchical review of the troops that drew crowds of onlookers.

Even now, the date of the "official" birthday varies year to year. For the first seven years of her reign, Elizabeth II held her official birthday on a Thursday but has since switched over to Saturdays. And while the date is tied to the Trooping the Colour in the UK, Commonwealth nations around the world have their own criteria, which generally involve recognizing it as a public holiday.

Australia started recognizing an official birthday back in 1788, and all the provinces (save one) observe the Queen's Birthday on the second Monday in June, with Western Australia holding its celebrations on the last Monday of September or the first Monday of October.

In Canada, the official birthday has been set to align with the actual birth date of Queen Victoria—May 24, 1819—since 1845, and as such they celebrate so-called Victoria Day on May 24 or the Monday before.

In New Zealand, it's the first Monday in June, and in the Falkland Islands the actual day of the Queen's birth is celebrated publicly.

All in all, just another reason it's great to be Queen.

Have you got a Big Question you'd like us to answer? If so, let us know by emailing us at bigquestions@mentalfloss.com.

nextArticle.image_alt|e
iStock
arrow
Big Questions
What Is the Meaning Behind "420"?
iStock
iStock

Whether or not you’re a marijuana enthusiast, you’re probably aware that today is an unofficial holiday for those who are. April 20—4/20—is a day when pot smokers around the world come together to, well, smoke pot. Others use the day to push for legalization, holding marches and rallies.

But why the code 420? There are a lot of theories as to why that particular number was chosen, but most of them are wrong. You may have heard that 420 is police code for possession, or maybe it’s the penal code for marijuana use. Both are false. There is a California Senate Bill 420 that refers to the use of medical marijuana, but the bill was named for the code, not the other way around.

As far as anyone can tell, the phrase started with a bunch of high school students. Back in 1971, a group of kids at San Rafael High School in San Rafael, California, got in the habit of meeting at 4:20 to smoke after school. When they’d see each other in the hallways during the day, their shorthand was “420 Louis,” meaning, “Let’s meet at the Louis Pasteur statue at 4:20 to smoke.”

Somehow, the phrase caught on—and when the Grateful Dead eventually picked it up, "420" spread through the greater community like wildfire. What began as a silly code passed between classes is now a worldwide event for smokers and legalization activists everywhere—not a bad accomplishment for a bunch of high school stoners.

Have you got a Big Question you'd like us to answer? If so, let us know by emailing us at bigquestions@mentalfloss.com.

SECTIONS

arrow
LIVE SMARTER
More from mental floss studios