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September 11, 2012

Why free stuff has always been so irrationally exciting

Loyalty points, frequent-flier miles, corporate-branded umbrellas, tote bags, stress balls and other trifles: All are contemporary versions of an old and very effective marketing strategy. We have always been suckers for free stuff.

Many of us remember pulverizing dry cereal to dust in an attempt to retrieve a free prize at the bottom of the box. Older generations were drawn to the miniature books, plastic charms and base-metal tokens inside boxes of Cracker Jack, with caramel-coated popcorn and peanuts often an afterthought.

That strategy was hugely successful, but it wasn't new. Rueckheim Bros. & Eckstein, the maker of Cracker Jack, was probably inspired by American confectioners of the 1870s, who targeted young customers by selling "prize packages" containing cash, jewelry and prints. Plus candy.

Confectionery supplier John H. Miller & Son, for example, offered 21 different prize packages in its 1876 promotional flier, including the Great Watch Novelty, which guaranteed that one out of every two boxes contained a new silver coin, and one in 100 held a new watch. Other candy- filled prize packages contained marbles, charms, puzzles, whistles, pop guns and assorted other gimcracks, the manufacture of which was a lucrative business in its own right.

W.C. Smith of Buffalo, for example, specialized in confectioners' toys for "penny goods," and Chicago's Dowst Brothers, which would later produce the TootsieToy line of cast-metal cars and airplanes, began their business producing thimble-sized tokens in the shape of rabbits, boots, flowers, horseshoes and boats for candy boxes.

Confectioners, in turn, may have been inspired to offer incentives by the publishers of children's serials, who in the 1870s began encouraging young readers to "canvass" — that is, to solicit subscriptions from their friends — acting, in effect, as cheaply paid agents. Successful canvassers were promised remuneration in the form of choice prizes. The magazine St. Nicholas promised a pair of ice skates (five subscribers), a telegraph (10 subscribers), a tool chest (15 subscribers), a piano (300 subscribers), or free tuition to "any school or academy in the U.S." (500 subscribers).

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