Pssst. Hey buddy, wanna buy some 22-cent postage stamps for 17 cents each? An illegal offer, right? Or bait in a US Postal Service undercover operation?
No. It's an ingenious advertising ploy. A Houston-based company actually plans to sell 22-cent first-class US stamps at almost a 23 percent discount.
To cover the nickel loss, American Discount Stamps (ADS) plans to sell advertising on a 2-by-3-inch sticker that consumers can slap on an envelope. A regulation postage stamp will already be affixed to the upper right-hand corner of the sticker.
If all goes according to plans, ADS will make the stamps available beginning in December through retail chains such as convenience stores, supermarkets, and fast-food outlets. These stores will also pay ADS to distribute the stamps, which are sold in packages of 20.
``This is the first new advertising medium to come along since television,'' ADS marketing director Wendell Lewis exclaims. ``We're essentially selling $1 bills at 24 percent off.''
But is it legal? Kenneth Youngchild, a printer who is a backer of the ADS venture, says he and other investors have consulted lawyers and postal officials. ``There is nothing in the postal regulations that says you can't do it. Believe me, we did a lot of research before making this investment.'' Mr. Youngchild has invested more than $1 million in security systems (for safeguarding the postage stamps) and special printing machinery.
To prove their claim, at a recent press conference here ADS officials displayed envelopes bearing canceled stamps from 50 states. Ralph Stewart, a spokesman for the US Postal Service, agreed there was no regulation specifically against what ADS plans. But he added there has been ``no official ruling one way or another'' on the ADS stamps.
For consumers, the stamps will offer savings not only in cost but perhaps in time. ``Post office lines are long and their hours are too short,'' says one ADS director. And if advertisers use their space to display a coupon instead of a product or corporate logo, the consumer reaps even greater savings. The stamp's peel-off backing can also be printed on for use as a coupon or ad. Finally, the self-adhesive stamp eliminates licking.
ADS officials say they have an agreement in principle with the Southland Corporation to distribute the stamps. Southland owns 7,500 7-Eleven convenience stores. Southland's corporate purchasing agent, Larry Norwood, says, ``We do not have a commitment [with ADS], but it looks very good at this point.''
Mr. Norwood expects the stamps would help bring more female customers to 7-Eleven stores; this is now a weak market segment for Southland, he says.
For advertisers, the stamps guarantee at least two people will see their ad: the sender and the receiver of a letter. The stamps are not cheap for advertisers. A minimum order of 500,000 stamps costs $85,000.
But ADS officials and advertising consultants say price isn't the obstacle to this product's success.
``The challenge is to figure out the best way to use [this new medium],'' says Robert Lorsch , president of a Los Angeles sales promotion and public relations firm.
He suggests one possibility is to pair a grocery store chain (as distributor) with a packaged food processor (as advertiser). For instance, Beatrice could advertise a variety of the foods it produces and Safeway could be the stamp distributor. Theoretically, both Safeway and Beatrice would increase sales with the stamps.