I should like to come back to a point made by Senator Molony on Second Stage regarding the actual operation of trading stamps schemes. While I realise the Senator would like to know more on the subject, I should explain that while certain factors are common to all schemes each one operating here has its own special features. I should also point out that the Bill merely lays down a general statutory framework in which trading stamp schemes may operate. It does not set out to regulate their financial affairs.
In general terms, however, there are three schemes of which we are aware operating in Ireland at present which would fall within the scope of the Bill. Broadly speaking, the profit to the promoter of a trading stamps scheme arises out of the difference between the cost of the stamps to the retailer and the cost in turn to the promoter of redeeming those stamps, plus printing and promotional outlays on the stamps themselves. There is, of course, also a hidden profit on the stamps that may not be redeemed at all by customers.
Regarding the benefit to the retailer, his profit would essentially materialise from the difference between the increased turnover generated by the use of stamps as a promotional device and the cost of the stamps to him. I should add that the Department have seen no evidence to suggest that trading stamps have been other than a profitable promotional device for retailers.
Finally, from the consumers' point of view, trading stamps could be said to amount to a discount on purchases of various products in selective retail outlets. Although it could be argued that this discount is theoretical in so far as prices in general in franchised outlets might be higher than those elsewhere, the findings of the Department and other independent consultants would not appear to bear out this argument. It can be seen, therefore, that trading stamps will appear to be acceptable to all interested concerns. Therefore, the course taken in this Bill—to regulate rather than prohibit trading stamps—is the right and entirely justifiable one.
