It started with a problem.
Thomas Sperry encountered a stamp-based customer incentive at a Milwaukee department store in the early 1890s. Customers received stamps when they paid in cash, which they could collect and redeem for goods. Sperry saw a business in providing this service to retailers. In 1896, he founded the Sperry and Hutchinson Company with investor Shelley Byron Hutchinson, issuing the first S&H Green Stamps at stores in Jackson, Michigan. Merchants purchased stamps from S&H and gave them to customers proportionally to the amount spent — one stamp for every ten cents. Customers pasted stamps into booklets and redeemed them for merchandise at S&H showrooms.
Historical sources below ↓Then something changed.
Smithsonian Magazine's account of Green Stamps describes how the program grew to dominate American retail. By the 1960s, S&H was distributing more than 32 million catalog copies per year and operating around 800 redemption centers, with over 100,000 participating businesses. The program gave retailers a way to reward loyalty without cutting prices publicly and gave customers a reason to concentrate purchases at participating stores. When retailers began creating their own programs in the mid-1970s — as inflation and competition changed the economics — S&H lost its role as intermediary. The modern airline frequent-flyer program and the supermarket loyalty card descend from the same logic.
What a builder can learn.
Our interpretation: loyalty programs work by making accumulation visible. The stamp book made progress concrete. Customers who could see their progress were more likely to continue. This is a design principle, not just a marketing trick. Many businesses have loyal customers who receive no signal that their loyalty is recognized. The question is not whether to reward loyalty — most businesses already benefit from it — but whether customers can see that their continued engagement is noticed and valued.
A door still open.
A hypothesis worth testing: if a small business introduced one explicit acknowledgment of repeat customers — a milestone, a thank-you, a visible record of their history — would customers who received that signal show higher return rates than those who did not, even without a monetary reward?
Does your most loyal customer know they are your most loyal customer — and do they feel that you know it too?
Follow the evidence.
History is sourced below. Business lessons are editorial interpretations; future possibilities are questions to test, not predictions.
Prepared from primary-source histories. First edition: 25 Sept 2026.