Before Loyalty Cards There were Coupons
Plastic loyalty cards where consumers collect points and “cash” them in for various rewards or goods are ubiquitous these days. Loyalty programs, also known as rewards program or points programs are marketing strategies that are designed to encourage repeated customer interactions with a product, store, or brand. Typically, the more often a customer patronizes the merchant—and the more they spend—the greater their rewards. Loyalty programs are not new, as various efforts to encourage consumer loyalty have been traced to early Egyptian times where wooden tokens shaped like a loaf of bread or a jug of beer were used as an exchange type system in lieu of another currency[i]. Two Canadian researchers from Carleton University[ii] in tracing the evolution of loyalty programs in North America identified six variations:
- Tokens – when customers are rewarded with a voucher that could be exchanged or redeemed for goods or services (wooden or copper) was evident in North America in the late 1700s.
- Coupons – similar to the tokens only paper certificates or cardboard tickets (e.g., printed on the package or box tops) that could be redeemed for premiums or rewards or discounts.
- Credit extension – merchants extending credit to customers as a way to ensure their loyalty
- Trading stamps – Trading stamps were first introduced in Canada at the end of the 19th century. These were sold by third parties to retailers, who would give them to customers based on how much they spent. The customer pasted them into booklets and eventually exchanging a specified number of filled booklets for merchandise. The intent was to get customers to be loyal to the merchant. The merchant benefited by generating additional revenue from which they could cover the cost of the stamps, and consumers obtained additional goods at no extra cost to them. However, non-participating retailers lobbied for laws that prohibited the distribution of these third-party stamps, and in 1905 Parliament passed the Trading Stamps Act, which effectively shut down all such programs for decades. It wasn’t until 2018 that the provision against trading stamps was deleted from the Criminal Code[iii].
- Proprietary currency – a cash bonus coupon program. The most recognizable example of this is Canadian Tire money.
- Loyalty programs – became common in the late 20th century and are very common today ranging from frequent flyer programs and supermarket discount cards to retail points cards.
In the 1900s probably the most common of all of these was coupons.
Nabob Coupons
One BC company, Nabob,[iv] had a long tradition of including coupons in their products which could then be used toward the purchase of household items. I was reminded of this recently when I received a 1953 Nabob Premium Catalogue from my sister-in-law. She found it in her mother’s “recipe clipping box.”
The booklet is 12 pages, printed back-to-back with 9 pages of items that can be redeemed and one page of directions.
Front and Back Cover of Nabob Premium Catalogue
The catalogue included mainly household items such as Pyrex ware, pots and pans, kitchen tools, cutlery, canning lids, and dish towels. But there were also items such as an alarm clock, softball ball, dolls, mens’ socks and nylon stockings.
Examples of Pages from the catalogue
This was a mail-order catalogue and to redeem coupons consumers had to follow these directions:
If the customer wanted to order the Pyrex pie plate (100d) they would need to have 50 coupons and include 20 cents for postage. If you look closely at the coupons you will notice that they have different values – some were worth “one coupon”, others “half coupon” and “two coupons.” The coupons would have to add up to 50 for the pie plate.
The Nabob Coffee Company was established in Vancouver in 1896. The company mainly processed and packaged coffee, along with various teas, spices and extracts. The factory and brand were founded and operated by Robert Kelly and Frank Douglas of Kelly, Douglas and Company[v]. The Nabob brand was started in 1904 and officially registered in 1906 and about the same time they adopted the coupon program.
They may have got the idea from a similar program in the United States. The Grand Union Tea Company formed in 1872 in Pennsylvania sold their products door-to-door and rewarded customers with ‘tickets’ which could be collected and redeemed for a wide selection of products from the company’s Catalogue of Premiums[vi].
Nabob was purchased by Jacobs Suchard in 1976, and then by Kraft Foods in 1994., which continues to sell and manufacture the coffee brand[vii]. It was after Kraft took over that the premium catalogue was terminated. The use of premium programs and mail-in catalogues became less common across the consumer goods industry as companies shifted towards other forms of promotion, such as in-store discounts, contests, digital marketing and loyalty points cards.
The coupons are now considered collector’s items and are often found for sale on sites such as eBay and Etsy.
[i] deZwart, M.L. (2022). Supply Chains. https://bcfoodhistory.ca/food-supply-chains/
[ii] https://loyaltyrewardco.com/the-true-history-of-loyalty-programs/
[iii] http://www.nabob.ca/en/the-nabob-story/history
[iv] https://loyaltyrewardco.com/the-true-history-of-loyalty-programs/
[v] Elnahla, N., & Neilson, L. (2021, June). The History of Retail Loyalty Programs: How Customer Loyalty Turned into a Privacy Paradox. In Proceedings of the Conference on Historical Analysis and Research in Marketing (Vol. 20, pp. 92-95)
[vi] Londo, J. R. (2000, 2013). The Trading Stamp Story (or: When Trading Stamps Stuck) http://www.studioz7.com/stamps.html; Morris, J., Manne, G. A., Lee, I., & Zywicki, T. J. (2017). Punishing Rewards. Macdonald-Laurier Institute Publication. https://www.macdonaldlaurier.ca/files/pdf/MLI-PaymentCardRegulationPaper10-17web.pdf
[vii] For further information about Nabob, see de Zwart, M. (2021), Nabob Foods. https://bcfoodhistory.ca/nabob-foods/ ; deZwart, M. (2021), Nabob Foods Home Service, https://bcfoodhistory.ca/nabob-foods-home-service/
