Wikipedia: "During the 1960s, the [S&H Green Stamps] rewards catalog printed by the company was the largest publication in the United States and the company issued three times as many stamps as the U.S. Postal Service."
Looking back, it was so inefficient. Economists, and many other groups hated them.
The merchant bought stamps and gave one away with every dime of purchase. The customer took the stamps home and pasted them in books. When the book was full, the customer would take the books to a "redemption center" where each was worth about $2.50 credit toward the purchase of various items, often home or kitchen appliances.
In some cases, stamps could be redeemed for products at the retailer's stores. Issuers included gas stations, department stores, small shops and supermarkets.
What killed trading stamps? For one thing, the gas embargoes of the 70s meant service stations no longer had to aggressively compete for business. Prior to about '74 gas stations gave away stamps and premiums such as drinking glasses with purchases.
Trading stamps were always controversial and many states attempted to legislate stamp policy:
Are we on the verge of a similar mania with web coupons as the new "currency?"