World Library  
Flag as Inappropriate
Email this Article

Blue Chip Stamps

A sheet of Blue Chip Stamps

Blue Chip Stamps started as a trading stamps company called "Blue Chip Stamp Co." They were a competitor to S&H Green Stamps. Blue Chip stamps were a loyalty program for customers, similar to discount cards issued by pharmacies and grocery stores in the digital era. A customer making a purchase at a participating store (typically grocery stores, gasoline stations, and pharmacy chains) would be given stamps in proportion to the size of the purchase. The stamps would be issued by machines next to the cash register. The customer would paste the stamps (which could be licked or moistened with a sponge, like postage stamps) into books. Pasting a large number of stamps into books could be time consuming. The books could then be taken to a special redemption store and redeemed for merchandise, such as lawn furniture, dining tables, table ware, and many other items. The redemption stores did not keep a full inventory of items, but would order from a catalog on behalf of the customer.

The loyalty program was paid for through the overall pricing of goods in the participating stores. When the recession of 1980 hit, cost cutting caused the program to lose popularity, and the growth of credit card transactions competed for retail margins. As computerization developed, less cumbersome loyalty programs were developed. These programs required less of a customer's time and also had lower operational costs: they did not require retail outlets for the redemption of stamps, and the discounts often were restricted to the products offered by the participating stores, i.e., the participating stores were discounting merchandise that they would keep in stock even without the reward program.


  • History and background 1
  • Acquisitions 2
  • See also 3
  • References 4
  • External links 5

History and background

In 1963, the United States government began an antitrust action against Blue Chip Stamp. In 1967, the parties agreed to a consent decree which led to the creation of a new company "Blue Chip Stamps".

In 1975, a lawsuit filed by Blue Chip Stamps was decided by the Supreme Court in the opinion Blue Chip Stamps v. Manor Drug Stores.[1] This ruling helped establish the precedent that only buyers or sellers of securities can file suit for damages due to deceptive practices.

Berkshire Hathaway, the investment vehicle of Warren Buffett, began investing in Blue Chip Stamps in 1970. Berkshire's investment in Blue Chip went from 36.5% in 1977, to 60% in 1979, and finally merged in a stock swap in 1983.[2]

According to Buffett's 2006 letter to Berkshire shareholders, Blue Chip had 1970 sales of $126 million as about 60 billion of "stamps were licked by savers, pasted into books, and taken to Blue Chip redemption stores." He also said, "When I was told that even certain brothels and mortuaries gave stamps to their patrons, I felt I had finally found a sure thing." Sales dropped to $19.4 million in 1980 and $1.5 million in 1990. In 2006, revenues came in at $25,920.[3]


On January 3, 1972, Blue Chip obtained a controlling interest in See's Candy Shops. Blue Chip later acquired 100% of See's for an overall price of $25 million.

Wesco Financial Corporation was an 80.1% owned subsidiary of Blue Chip Stamps until its complete merger into Berkshire Hathaway in 2011.

See also


  1. ^ Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723 (1975).
  2. ^  
  3. ^  

External links

  • William J Kozersky Stamp Company commercial site with pictures of Blue Chip Stamps, and much information
This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.
Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.
By using this site, you agree to the Terms of Use and Privacy Policy. World Heritage Encyclopedia™ is a registered trademark of the World Public Library Association, a non-profit organization.

Copyright © World Library Foundation. All rights reserved. eBooks from Project Gutenberg are sponsored by the World Library Foundation,
a 501c(4) Member's Support Non-Profit Organization, and is NOT affiliated with any governmental agency or department.