Shop Talk

Retailers, consumers and prices

Check Out Line: The rebates are coming! The rebates are coming!

April 29, 2008

walmartt.jpgCheck out those federal rebate checks.
Tax rebates began arriving in U.S. consumers’ bank accounts this week as part of Washington’s $152 billion stimulus package.  (Direct deposits this week and paper checks next week.)

Retailers have various strategies for attracting those rebate dollars. Many of them are offering 10 percent bonuses when the checks are converted to store discounts.

Then there is Wal-Mart, which will cash the checks for free. That’s it. Cashing the checks for free. No bonus, like Kroger or Supervalu are offering. Just cashing the checks for free.

Of course, unlike other retailers, Wal-Mart will cash the checks free without requiring a purchase in the store. Obviously, if you have to put the funds from your rebate onto a Kroger or RadioShack gift card, you would spend the money in those stores.

“We’ll focus on providing real, long-term value on the items that matter and put shoppers in control of their own spending,” said John Fleming, executive vice president and chief merchandising officer, Wal-Mart Stores, U.S.

So you don’t have to spend the money at Wal-Mart. But once you cash the check there, the company is also cutting prices on everyday items like shampoo, lunch meat and cereal to coincide with the checks arriving.

Overall, Customer Growth Partners estimates that $40 billion of the rebate payments will be spent by consumers. The rest will be used for debt reduction and savings. But that, along with $15 billion in cash flow from consumers no longer paying to heat their homes as that season ends, could add $55 billion in retail spending in the coming months, the research firm said.

“One swallow does not a summer make, but our visits to the malls and the Big Boxers over the past week showed the strongest traffic of the year, now that heating bills are paid off,” Customer Growth Partners President Craig Johnson said.  “And at least at the Apple stores and some teen Apparel players — and of course at Costco and Wal-Mart — we’re seeing the biggest crowds since Christmas.”

Also in the basket:
U.N. and World Bank say to tackle food crisis
Office Depot profit down, but beats street view

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