Free Gifts for Investors

Last week, I was lamenting the demise of shareholder perks. So many companies that once rewarded their investors with gifts and discounts have been getting awfully stingy these days. To an outsider, this may seem like a petty grievance. Why should a company be sending out T-shirts or packs of gum to its shareowners, when that money could be better spent on improving its bottom line?

Well, that's pretty much the point. Giving investors a little something-something often makes them gratefully loyal and willing to spread the word. If someone has ever commissioned a study to show the near-term or long-term impact of a company discontinuing its shareholder benefits, I'd love to see it.

I wrote about perks not once, but twice, during the late 1990s. In revisiting this theme last week, I was initially saddened to see that so many prolific bennies had been abandoned. I called out for feedback from anyone still receiving shareholder perks, and I was pleasantly surprised by the feedback.

Capital gains through kindness
The most popular response came from Starbucks (Nasdaq: SBUX) investors. Every year, the company sends out a holiday gift card to its investors. There may not be much on the card -- just enough to cover a double latte -- but it's a special shareholder-edition card that may wind up winning a double take from your local, friendly barista.

Starbucks isn't the only company giving back to java junkies. GreenMountainCoffee (Nasdaq: GMCR) is more than just a good corporate citizen. The coffee maker offers its shareholders a 10% discount on related purchases all year long.

Still hungry for more? Did somebody say McDonald's (NYSE: MCD)? In the past, the world's largest fast-food chain has sent out vouchers for things like free fries. Now that the menu has gone a bit more leafy and upscale, investors are also getting an upgrade. The last annual report came with a voucher for one of the priciest items on the Mickey D's menu: a premium chicken salad, gratis.

And even though they're not free, gift baskets can be had "at a nominal price" for the holidays from companies like Kimberly Clark and General Mills. You can then send the baskets to family and friends, which is probably a perfect way to get them hooked on brand loyalty, too.

Writing up the markdowns
Some of the more common perks involve price breaks on a company's products. Green Mountain isn't the only one that knows giving its owners a better deal can help stir up more business. Someone else wrote in to share that Constellation Brands gives a 30% discount on its California wines. WillametteValleyVineyards (Nasdaq: WVVI) supposedly also marks down its wines for its shareholders.

If you'd rather be sailing as you sip that discounted wine, Carnival (NYSE: CCL) and Royal Caribbean (NYSE: RCL) offer their investors shipboard credit when they book a cruise. The credit can range from $50 to $250, depending on the length of the sailing. One reader had just come back from saving $100 on a seven-day Caribbean cruise on Royal Caribbean.

It may not seem like much, but consumer-brand conglomerates like Procter & Gamble also reward their investors by wedging generous coupons into their shareholder mailings.

Anatomy of a feel-good perk
With all of the love in this article, it seems kind of absurd that so many companies are ending their ritualistic perks, instead of capitalizing on favorable impression those perks can make with their shareholders at vulnerable moments like board-member election time.

One of the better stories I got came from a reader named Nell, who was surprised that peripherals specialist Logitech (Nasdaq: LOGI) hit her with an unexpected freebie.

"Our jaws dropped when Logitech mailed us a BEA-U-TI-FUL gift box at proxy time," she wrote. "It was folded in very complicated and compact ways that created compartments, had silver ribbons, and contained a way-cool T-shirt."

When you've got a brand that folks are looking forward to wearing on their chests, you can't be doing too badly. As far as I know, Enron never sent out complimentary keychains or bumper stickers.

So let's hope that this is not the end of shareholder perks. If I missed any this time, by all means, do drop me a line, and I'll try to mention it the next time I broach the subject. Let's hope it doesn't take another seven years this time.

Be kind, companies. Be kind.

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Longtime Fool contributor Rick Munarriz isn't just scrounging for cheap stuff. He believes that rewarding investors will pay off many times over in the long run. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.