The Impact of Consumer Premiums on Marketing Efficiency

The boom in trading stamps and other consumer premiums raises some interesting questions about the social value of this form of marketing. The author indicates that consumer premiums have probably increased the social efficiency of marketing.

He shows how substantial savings have resulted from moving certain types of goods to consumers as premiums. Also premiums are an outlet for competition where quick retaliation or other factors would make price competition infeasible. Finally, premiums have often stirred up competition which has taken non-premium forms. From all indications there have been enough shrewd shoppers and enough non-premium sellers to prevent “free” premiums from serving as a camouflage for price increases.