Tax rebate checks are in the mail and some of the rebate cash has already made its way to consumers’ wallets. But will this cash infusion give the economy (and struggling retailers) a boost?

According to interviews Reuters conducted with consumers across the United States over the past week, the answer seems to be that most of the extra money will be heading toward the basics — like food, fuel and credit card payments — with just a little left over for splurges.

Here are some comments we rounded up:

• “I will almost certainly save it,” Courtney Hancock said outside a shopping center in the Buckhead section of Atlanta. “At this point there isn’t anything that I’ve been waiting to buy.” Her expected $600 rebate check will likely be used for a bigger purchase later. 
• Lisa Hasson, 39, free-lance pianist and mother of twin, 2-year-old boys in Cincinnati. “I’m probably just putting it in a savings account — holding onto it for the summer. Lean living for lean times.” 
• Ava Lee, 34, has been out of work in Los Angeles since December and says she’ll use her rebate check to pay for “necessary expenses” like food and gas. ”I’d use mine for everyday spending. I would not go out and say, ‘Ooh! I have extra money’,” said Lee, who has turned off her heat and air conditioning to keep expenses down. 
• Sarah Ortiz of Houston said she decided early on to use the tax rebate to pay debt. “I’m trying to get down to one credit card. They say we’re in a credit-crunch,” she said. 
• Daniel Pillow of Houston said he planned to use his rebate to pay his American Express bill, but admitted he’d already used the card to buy some extra clothes in anticipation of getting a check. “I may have spent a little bit, knowing that I was going to get a check,” said Pillow, an employee of the Houston Public Library system. 
• Morgan Lawson, 58, works at the Time-Life Building in New York supervising newspaper deliveries. ”The likelihood of saving it is slim,” he said, adding that prices seem to be rising across the board. He thinks he will have to spend it on necessities, like food and higher energy prices and clothes for his children. ”It sure doesn’t hurt,” to get the extra cash, he said, “But, it’s not a huge boost.” 
• Sergio Rivas, a computer network administrator from Hialeah, Florida, said he would put his rebate toward a deposit on a new apartment.  He said he’s looking for “something a little bit bigger, hopefully with some kind of patio.” 
• Paula Goehe, 61, retired administrative assistant in Indiana: “I’m sorry to tell you I’m not going to spend it. We need the money for retirement. We’ve been retired four or five years and we spent a lot to put our children through college, so we’ll be saving it — even though there is no interest at all.” 
• Dana Bulan, a teacher who lives in Chicago, said she will use her $300 rebate check to pay for her regular tennis lessons and won’t bother trying to save it. ”It’s such a small amount of money, it’s not worth, I think, trying to put it someplace else,” Bulan said.
• John Barker, 57, who installs swimming pools for the “super-rich” in the St. Louis area, said that although his business had not been affected by slowing economic growth, spiraling costs meant he had few plans for his rebate check. ”I’ll put it into my checking account and no doubt it will go for gas or food,” he said in the parking lot of a branch of Bank of America on the outskirts of St Louis. “Looking at the price of oil, I think I’ll need it to fill up my truck.” 

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(Photo: Reuters)

Check 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.”

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