Neatorama is proud to bring you a guest post from Ernie Smith, the editor of Tedium, a twice-weekly newsletter that hunts for the end of the long tail. In another life, he ran ShortFormBlog.
From coupons to Zimbabwean dollars, sometimes currency turns out to be worth a lot less than it initially seems.
If you’re watching the right digital substation, the message is hard to ignore. Ron Paul says we’re facing a catastrophic financial crisis that could leave you screwed. That’s a weird message to hear from any former politician, even one with the libertarian bonafides of Ron Paul. (His son Rand must be psyched that this is how he’s spending his retirement.) But the paid ads, which are designed to get you to buy some financial services you don’t need, nonetheless offer a funhouse mirror from which to consider the market forces that cause currency to lose its value. Today, we talk about worthless currency. (Image credit: Flickr user Sandor Weisz)
Why Coupons Always Tell You They Have a Nearly Worthless Cash Value
You have to be really hard up to try to exchange 100 coupons for Fancy Feast for the penny in cash value you can get in return. You’d probably have more luck finding a penny on the street than finding 100 coupons for cat food, yet it’s still theoretically possible. But why?
According to Mental Floss, two factors are at play. First off, manufacturer’s coupons haven’t been around forever—only since the 1890s, in fact, when C.W. Post started putting the coupons on packages of Grape Nuts—and they didn’t achieve true widespread popularity until the 1970s, due to the popularity of a coupon variant called trading stamps. Trading stamps were the 1930s version of reward cards—except, instead of saving the value on a piece of secure plastic, you filled an entire book up with stamps, and those stamps could be used to buy stuff in catalogs.
(Image credit: Flickr user frankieleon)
As a result, trading stamps had nominal value, which led states to pass laws requiring those stamps to list their exchange prices.
Today, these stamps are largely a thing of the past, though their spirit remains alive as a part of programs like Labels for Education, which give the eventual rewards to local schools that can collect large numbers of labels en masse.
But as a result of this weird past, a few states still have rules requiring coupons to list their actual monetary value, which mean we all know how much a coupon is technically worth when transferred to real money.