Who Really Benefits From Stamp Savings Books?

An examination of a popular budgeting tool in Namibia reveals that while households gain spending discipline, retailers capture the larger financial advantage.

Across Namibia, stamp savings books offered by major retailers are widely used to prepare for groceries, school expenses, and year-end spending.

For many households, they are seen as a practical way to “save”.

From a financial perspective, however, stamp savings books function less like savings instruments and more like advance payment systems – and tend to benefit retailers more than consumers.

Stamp savings books are a form of prepaid consumption. When customers buy stamps, they are effectively:

• • Paying the retailer in advance
• • Allowing the retailer to hold their cash
• • Committing future spending to a specific store

The funds do not earn interest and do not grow over time. They simply remain dormant until exchanged for goods later.

HOW RETAILERS BENEFIT

• Immediate access to cash: Once stamps are bought, retailers receive cash upfront at no cost. This becomes part of their working capital and can be used to pay suppliers, manage daily operations, improve liquidity, or earn interest while held in bank accounts.
• Guaranteed future customers: Stamp savings books create customer loyalty. Because funds are already committed, customers are less likely to shop around or compare prices elsewhere, ensuring future sales for the retailer.
• Inflation advantage: Food prices tend to rise over time due to inflation. When retailers receive stamp payments early, they hold cash while prices increase.

By the time customers redeem their stamps, the same amount of money often buys fewer goods, reducing the customer’s real buying power while the retailer has already benefited from early cash flow.

• • Scale amplifies impact: While individual contributions may be small – N$50 or N$100 at a time – thousands of customers participating simultaneously can generate millions of dollars in interest-free liquidity for large retail chains.

WHAT DO CUSTOMERS GAIN?

Stamp savings books can help households:

• Budget more consistently

• Control spending

• Reduce the temptation to use money elsewhere

However, they do not:

• • Earn interest
• • Protect against inflation
• • Build wealth over time

In contrast to savings or investment accounts, stamp books preserve nominal value only, not real value.

THE BOTTOM LINE

Stamp savings books are effective budgeting tools, but they are not savings or investment products.

Customers benefit from structure and discipline, while retailers benefit from early cash access, customer loyalty and improved financial flexibility.

For consumers aiming beyond short-term budgeting toward long-term financial security, alternatives such as interest-bearing savings accounts, investments, and other wealth-building instruments offer stronger protection against inflation and greater potential for growth.

• Keshia !Hoa-Khaos is a registered financial planner.

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