Company scrip is a form of promissory note that a company paid to its workers in lieu of the legal tender of the country.
In many cases, companies paid the scrip as a kind of credit against anticipated wages. Therefore, when payday arrived for the person who had been paid in company scrip, the amount of scrip he or she had already used was deducted from the pay.
The scrip was only good with the company who paid it, which meant for many working families, they were forced to buy goods and food at the company store. These stores, operated by the company, often inflated prices an enormous amount. Since the workers had to shop there, workers lost money twice.
This practice was largely put into place by logging and mining businesses, who made their employees completely dependent upon the company, and usually in debt to the company as well. This enforced loyalty and ensured workers never left, despite difficult and dangerous working conditions.
Workers at such companies were rarely paid in cash, and few other merchants would accept the scrip as payment. If they did accept company scrip, it would not be at a 1:1 exchange rate, since the prices at the company stores were inflated.
Although the practice of company scrip was largely eliminated in the early 1950s, the system persisted for many years.
The practice does continue, but in other forms such as gift cards. Some companies will give a discount on a gift card, or accept a gift card in lieu of payment in cash. Some websites allow users to trade, buy or sell gift cards.
Many Multi-player Online Games also use a form of scrip as a currency.
Both of these current examples of scrip are different than the traditional understanding of company scrip known to miners and loggers for many years.