Excerpts from the report Preface: Food prices reached a near-record level in the third quarter of 1956. This advance was part of a broad increase in living expenses which reached a new high. Public opinion was focused on the increase and consumers want to know why food costs so much. Studies by the U. S. Department of Agriculture show that more than half of the retail price of food goes for processing and distribution. Because of this, any changes that may result in further increase in costs come in for close attention. In recent years a number of competitive practices have developed or been expanded at the retail level which may affect the cost of retailing. One of the most striking of these is the phenomenal expansion in use of food trading stamps. Because of the importance of these developments the Agricultural Marketing Service has undertaken a study of the effects of the use of food trading stamps and associated practices on marketing organization, costs, and efficiency. This first report seeks only to explain the basic characteristics of trading stamp plans, to review and discuss available information relating to the development and use of the stamps, and to consider some of the relevant issues and economic problems facing retailers and consumers as a result of the widespread use of these stamps.