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Retailers offer deals, competing for rebate dollars

By Mark Albright, Times Staff Writer
In print: Tuesday, May 13, 2008

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Several retailers are dialing up discounts to win some of the $40-billion consumers are expected to spend from $110-billion in economic stimulus checks over the next four months.

Stores such as Wal-Mart are waiving check-cashing fees for the government checks, hoping shoppers will spend some of that money on the same trip. Others, like Sweetbay Supermarket, Radio Shack, Sears and Kmart, are offering 5 to 10 percent "bonuses" to shoppers who spend their rebate money there. Winn-Dixie is putting a $5 coupon in its ad circular this week and promoting one item a week at an "unusually special value" in a "Stretch Your Check" promotion that runs through summer.

The federal $110-billion economic stimulus package is putting an average of $1,000 in the pockets of 90 percent of households by July 11, according to an analysis by Citigroup. Individual taxpayers get about $600; couples get $1,200, plus $300 per child. The first 800,000 checks totaling $27-billion were distributed April 28.

That $110-billion is almost three times the cash the Bush Administration passed out in the last rebate in 2001. About 40 percent of that money ended up spent on clothing, Citigroup said.

But this time research suggests that up to two-thirds of shoppers will to use the cash to pay down debt or stash into savings. So most chains decided to do nothing beyond promotional sales events to win more of the stimulus money their trade groups lobbied to get from Congress and the White House to perk up a leaden economy.

Chains ranging from Family Dollar to JCPenney plan to shape some of their spring promotional activity around the rebates.

But the combination of modest discounts and the fact that banks are turning up the heat on chronic late-payers and credit card holders with big balances prompted some experts to figure retailer promotions wouldn't do much good, anyway. There may be more urgency to pay the bank.

"I don't think many shoppers will be motivated by these deals," said Britt Beemer, an Orlando retail research consultant.

About 58 percent of the IRS rebate checks will be direct deposited in bank accounts. So most of the retail rebate action is directed at the one in five households with no banking relationship. They typically must pay fees to cash a big check.

Deals such as those at Kmart, Sears and Sweetbay are aimed at getting shoppers to spend most — if not all — of the rebate check while in their stores. Radio Shack requires a purchase to cash the government rebate check, then hands over the change in the form of a money card good anywhere that accepts MasterCard. Wal-Mart waives the check-cashing fee and pays cash or puts the balance on a Wal-Mart MoneyCard that's good at places that accept Visa. Wal-Mart waives the $8 to $9 MoneyCard fee.

Sweetbay waives the check-cashing fee, plus offers a 10 percent bonus to those who agree to spend all the rebate there. It's a 5 percent bonus if they agree to spend half of the funds there. It's a form of discounting aimed at selling more groceries at a reduced price.

"We wanted an option for shoppers who want to spend some of their rebate somewhere else," said Nicole LeBeau, Sweetbay spokeswoman.

Mark Albright can be reached at albright@sptimes.com or

(727) 893-8252.