Opinion ID: 1854339
Heading Depth: 1
Heading Rank: 4

Heading: Trading Stamps as an Item of Cost.

Text: When one of defendant's patrons elects to purchase $4 worth of gasoline without a concomitant purchase of a loss-leader item such as mixed nuts, toilet tissue or work gloves, he is given trading stamps by defendant having a value of 12 cents. On the other hand, if the customer elects to purchase one of the loss-leader items, he receives no trading stamps in connection with the $4 gasoline purchase, thereby saving defendant an out-of-pocket expenditure of 12 cents. Defendant contends the 12-cent saving should be deducted from the cost of the loss-leader item of the combination sale. The effect of such deduction would be to reduce the cost of any of the three loss-leader items to a figure that would result in each being sold at a profit. The computation of cost for the purposes of determining whether an item is sold at a loss is strictly prescribed by sub. (2) (a) of sec. 100.30, Stats. The only statutory language of sub. (2) (a) which conceivably could cover such a deduction is less all trade discounts except customary discounts for cash. The same contention was advanced by defendant in the circuit court and rejected. The court's memorandum decision stated: [This] Court is unable to recognize such transposition as a trade discount. It is well-established that a trade discount is a credit which the vendor, usually a wholesaler, gives to a vendee, who is usually a retailer, the most common form of which occurs in the adjustment of catalog prices. Such transposition as the defendant urges is pure fiction. Transposition is an apt characterization of defendant's argument with respect to the 12-cent value of trading stamps because the stamps, if given, are in connection with the sale of the gasoline. This 12-cent saving is not a trade discount in computing the cost of a loss-leader item sold by defendant in a combination sale with $4 worth of gasoline. In 26A C. J. S., Discount, p. 974, trade discount is defined as: . . . the difference between the seller's list price and the price at which he actually sells goods to the trade; . . . Webster's Third New International Dictionary defines trade discount as: a percentage deduction from the list price of goods allowed by a manufacturer or wholesaler to customers engaged in trade. Similarly, The Random House Dictionary defines trade discount as: a deduction from the list price of goods, granted by a manufacturer or wholesaler to a retailer. The foregoing definitions, particularly the latter two, make it abundantly clear that a trade discount is given by a wholesaler or manufacturer to the retailer, not by the retailer to a customer or patron, as defendant would have this court hold. Therefore, defendant is not entitled to a deduction equal to the value of the trading stamps to be applied against the cost of a loss-leader item of a combination sale with gasoline. By the Court. Judgment affirmed. HANSEN, J., took no part.