New members should be allowed to wear letters. They should be encouraged to wear letters. We should buy them several sets of letters and encourage them to wear them every day, all day long.
When I was a founding father of my chapter (back when The Facts of Life was a hit show), everything that active, initiated members were allowed to do, new members were allowed to do. We treated them as members who had a bunch to learn, not as people who had to earn membership. It's a philosophy I still encourage, 20 years later.
The one extended battle I had with my founding brothers had to do with the letters. I see it frequently, today. "They don't know what the letters mean, so they shouldn't wear them until they are initiated," the argument goes.
I am a marketer, so I don't understand why groups don't want their new members advertising their chapter all over campus. Give a new member letters and he will wear them constantly. He will interact with other young students on campus and recruit them.
"They don't know what the letters mean!" you say. So what? That argument doesn't carry water. Next time you see a kid wearing a Hollister t-shirt, ask him if he can state the company's mission statement. Yet, Hollister doesn't seem to mind that kid wearing and advertising their brand.
Go to any fraternity or sorority convention and see how many of the members over age 30 remember what the letters mean. Should we take away their badges? It cracks me up at my convention when I have to lead almost every alumnus (including most of our national board members) through that little ritualistic activity.
I usually comes down to active, initiated members wanting something to withhold from new members. It's a power thing, plain and simple. As an initiated member, you want something obvious that makes you something greater than a new member.
We have the badges, they have the new member pins. We have lifetime membership, they have probationary membership. You would think that would be sufficient.
It comes down to deciding which is more important: the egos of your active members, or the marketing of your organization.
Back at Indiana, we made a compromise. New members couldn't wear the Greek letters for our fraternity, but they could wear the words spelled out. I thought it was a goofy compromise, but it served my purposes, so I ran with it. It actually turned out pretty well, because we were trying to get known on campus. Our new members lived in shirts with the words "Pi Kappa Phi" spelled out, and it worked out better for us than if they had worn the letters.
Update: I just found out that Alpha Epsilon Phi Sorority has a national rule against pre-initiates wearing the "Phi" letter. I found this interesting. If there are any other groups out there with similar rules, I'd enjoy hearing about it, and I'd appreciate hearing what kind of discussions and justifications have been made within the organization for the rule. I'll do a follow up at some point if I get any new information. Thanks.