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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.

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Big Questions
Are There Number 1 Pencils?
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Almost every syllabus, teacher, and standardized test points to the ubiquitous No. 2 pencil, but are there other choices out there?

Of course! Pencil makers manufacture No. 1, 2, 2.5, 3, and 4 pencils—and sometimes other intermediate numbers. The higher the number, the harder the core and lighter the markings. (No. 1 pencils produce darker markings, which are sometimes preferred by people working in publishing.)

The current style of production is profiled after pencils developed in 1794 by Nicolas-Jacques Conté. Before Conté, pencil hardness varied from location to location and maker to maker. The earliest pencils were made by filling a wood shaft with raw graphite, leading to the need for a trade-wide recognized method of production.

Conté’s method involved mixing powdered graphite with finely ground clay; that mixture was shaped into a long cylinder and then baked in an oven. The proportion of clay versus graphite added to a mixture determines the hardness of the lead. Although the method may be agreed upon, the way various companies categorize and label pencils isn't.

Today, many U.S.  companies use a numbering system for general-purpose, writing pencils that specifies how hard the lead is. For graphic and artist pencils and for companies outside the U.S., systems get a little complicated, using a combination of numbers and letters known as the HB Graphite Scale.

"H" indicates hardness and "B" indicates blackness. Lowest on the scale is 9H, indicating a pencil with extremely hard lead that produces a light mark. On the opposite end of the scale, 9B represents a pencil with extremely soft lead that produces a dark mark. ("F" also indicates a pencil that sharpens to a fine point.) The middle of the scale shows the letters and numbers that correspond to everyday writing utensils: B = No. 1 pencils, HB = No. 2, F = No. 2½, H = No. 3, and 2H = No. 4 (although exact conversions depend on the brand).

So why are testing centers such sticklers about using only No. 2 pencils? They cooperate better with technology because early machines used the electrical conductivity of the lead to read the pencil marks. Early scanning-and-scoring machines couldn't detect marks made by harder pencils, so No. 3 and No. 4 pencils usually resulted in erroneous results. Softer pencils like No. 1s smudge, so they're just impractical to use. So No. 2 pencils became the industry standard.

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Big Questions
What Are Curlers Yelling About?
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Curling is a sport that prides itself on civility—in fact, one of its key tenets is known as the “Spirit of Curling,” a term that illustrates the respect that the athletes have for both their own teammates and their opponents. But if you’re one of the millions of people who get absorbed by the sport once every four years, you probably noticed one quirk that is decidedly uncivilized: the yelling.

Watch any curling match and you’ll hear skips—or captains—on both sides barking and shouting as the 42-pound stone rumbles down the ice. This isn’t trash talk; it’s strategy. And, of course, curlers have their own jargon, so while their screams won’t make a whole lot of sense to the uninitiated, they could decide whether or not a team will have a spot on the podium once these Olympics are over.

For instance, when you hear a skip shouting “Whoa!” it means he or she needs their teammates to stop sweeping. Shouting “Hard!” means the others need to start sweeping faster. If that’s still not getting the job done, yelling “Hurry hard!” will likely drive the point home: pick up the intensity and sweep with downward pressure. A "Clean!" yell means put a brush on the ice but apply no pressure. This will clear the ice so the stone can glide more easily.

There's no regulation for the shouts, though—curler Erika Brown says she shouts “Right off!” and “Whoa!” to get her teammates to stop sweeping. And when it's time for the team to start sweeping, you might hear "Yes!" or "Sweep!" or "Get on it!" The actual terminology isn't as important as how the phrase is shouted. Curling is a sport predicated on feel, and it’s often the volume and urgency in the skip’s voice (and what shade of red they’re turning) that’s the most important aspect of the shouting.

If you need any more reason to make curling your favorite winter sport, once all that yelling is over and a winner is declared, it's not uncommon for both teams to go out for a round of drinks afterwards (with the winners picking up the tab, obviously). Find out how you can pick up a brush and learn the ins and outs of curling with our beginner's guide.

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

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