Retailers are eyeing the rebate checks that started arriving in American bank accounts this week, hoping to entice shoppers with big deals and discounts.
Stores from Wal-Mart to high-end Restoration Hardware are offering incentives for shoppers to spend their rebate checks.
The rebate checks are part of a $168 billion economic stimulus plan passed by Congress. The checks — which range up to $600 for individuals and $1,200 for married couples, plus $300 per dependent child — are expected to land in the bank accounts and mailboxes of 130 million Americans.
People who chose direct deposit on their 2007 federal tax returns could get their check as early as this week. Paper checks will go out beginning May 9.
Wal-Mart announced today that it will cash rebate checks for free and has cut prices on groceries. Restoration Hardware is offering $100 off orders of $750 or more under its own "economic stimulus plan."
Grocers such as Kroger and SuperValu Inc. are also offering shoppers discounts when they exchange all or part of their rebate checks for gift cards.
The National Retail Federation expects consumers to spend 40.6 percent of their rebate checks, pay down debt with 28.4 percent and save or invest 22.7 percent, according to a February study.
The rebate checks may have already had a psychological impact.
Sales at chain stores last week rose 0.9 percent from the week before, according to the International Council of Shopping Centers. The New York trade group attributed the increase to shoppers anticipating their rebate checks.
"Consumers continue to face very difficult economic conditions with record high gasoline prices curbing discretionary spending," said Michael P. Niemira, chief economist and director of research at the ICSC. "But the one bright spot is the federal tax rebates — which are just now beginning to flow to consumers — should help to stem some of the weakness seen earlier this year."
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