The practice started in the 1890s, at first given only to customers who paid for purchases in cash, to reward those who did not purchase on credit. It grew with the spread of chain gasoline stations in the early 1910s and then the new industry of chain supermarkets in the 1920s, and merchants found it more profitable to award them to all customers. Trading stamps were at their most popular from the 1930s through the 1960s.
An example of the value of trading stamps would be during the 1970s and 1980s where the typical rate issued by a merchant was one stamp for each 10¢ of merchandise purchased. A typical book took approximately 1200 stamps to fill, or the equivalent of US $120.00 in purchases.
In the United States, the most popular brand of trading stamps was "S&H Green Stamps", sometimes informally simply known as "Green stamps". Other larger brands included "Top Value Stamps", "Gold Bond Stamps", "Plaid Stamps", "Blue Chip Stamps", and "Gold Strike Stamps." "Texas Gold Stamps" were given away in their namesake state mainly by the HEB grocery store chain, and Mahalo stamps in Hawaii.
Merchants would pay a stamp company for the stamps, and then would advertise that they gave away stamps with purchases. The intent of this was to get customers to be loyal to the merchant, so that they would continue shopping there in order to get enough stamps to redeem it for merchandise.
Often customers would fill books with stamps, and take filled books to a stamp company store to redeem it for items. Books could also be sent to the stamp company in exchange for merchandise via mail order.
At the start of the 1960s, the S&H Green Stamps company boasted that it printed more of its stamps each year than the number of postage stamps printed by the US government.
By the 1960s, trading stamps had spread to other countries. Entrepreneur Richard Tompkins established Green Shield Stamps in the United Kingdom (independent of S&H Green Stamps, but with a similar trademark,) selling stamps at filling stations, and signing up Tesco supermarkets to the franchise in 1963. By 1965, the British co-operative movement was offering trading stamps as a new means of allocating patronage dividends to its consumer members.
It is generally presumed as a result of serious inflation starting in the 1970s trading stamps became less common as merchants discontinued offering them as a means to cut costs. Their role has been subsumed by rewards programs offered by credit card companies and other loyalty programs, such as grocery "Preferred Customer" cards.
The musical parodist Allan Sherman had a song "Green Stamps" (to the tune of "Green Eyes," on his album Allan in Wonderland, 1964) in which the singer describes buying immense quantities of unneeded groceries in the desire to collect trading stamps.
An episode of the sitcom Everybody Hates Chris centers in part around Chris' father running to redeem the trading stamps before the Trading Stamp Company closes.
An episode of The Simpsons Television show (Season 8 - Homer Phobia) features a "Johnny Reb" figure that Marge cherishes as a family heirloom. The family visits an antique store to sell the figure. The clerk (Voiced by John Waters) informs the family that it is not an antique, but a novelty liquor bottle, "two books of green stamps, if I'm not mistaken."