Stores make rebates easy to spend

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Retailers are banking on consumers to turn their tax rebates into sales at the register.

Industry giants like Wal-Mart, Home Depot and Lowe's are offering cash-checking services to make the decision a little easier -- a gimmick that worked two years ago when consumers received the Bush administration's first tax rebate.

Retailers are advertising the free cash-checking service in hopes shoppers will spend the money in their stores.

"The public knows exactly what's going on," says John Simley, a spokesman for Home Depot. "If they are going to use the money on a home-improvement project, we'll save them the trip to the bank."

It worked in 2001 when taxpayers received $100 billion in rebate checks, but retailers wouldn't disclose how much it boosted their sales.

"It was a good idea then and it's a good idea now," Mr. Simley said.

The Internal Revenue Service on Friday began mailing checks of up to $400 per child. After the last batch of rebate checks is sent in August, 25 million U.S. families will have received a total of $12 billion.

The checks come at a crucial time for the retail industry. Sales in the first half of the year were sluggish as consumers, worried about job security, kept a tight hold on their money.

Some retail analysts say consumers are still nervous about spending and the tax rebates likely will go to savings or paying off debt.