Will Rebate Checks Help Retailers?

A tax rebate this year that President Bush recently approved would put between $600 and $1,200 in the hands of most taxpayers. And according to this article, many retail executives seem to think that this money will potentially end up in their stores.

“Wal-Mart and Circuit City are putting together strategies to draw in customers for what retailers say will be a bigger payoff than Valentine’s Day and Mother’s Day,” the article says. Mike Ullman, the chairman at J. C. Penney, says stores “would obviously compete vigorously” for shares of this money.

However, other reports say that most Americans will pay bills or save these funds. And at least one blog is encouraging consumers not to spend their money at Wal-Mart and other chains.

What is the most likely scenario? Will debt-heavy consumers try to use their checks to ease that weight, or are those flat-screen televisions too alluring? What are you spending your rebate on?


8 Responses to “Will Rebate Checks Help Retailers?”

  1. 1 Brad March 18, 2008 at 8:40 am

    This tax rebate is hatched from the brain of either a very sly fox or a two year old. Retail will most likely not benefit…..

    A few hundred dollars will go right into the fuel tanks of most peoples cars. It will stimulate oil consumption, do little for retail and does nothing to address real economic issues. In addition, the “give ’em something now” political nonsense just means that everyone pays later in the form of more taxes plus more interest. Since this administration has been spending money like a drunken sailor since day one, why not spend some more??? Part of the problem we have with credit and available money for borrowing is that the US is sporting a 9+ trillion dollar debt. It’s the FED that is using up available credit!!! It’s going to take 20 years to recover from this administrations multiple abuses of the system.

  2. 2 Alan March 18, 2008 at 9:28 am

    Some interesting thoughts from Brad. I don’t necessarily think a $1200 rebate check will go into the gas tank. But clearly some of it will. Some people WILL pay bills or put the check in their savings. But for a lot of people, $1200 will be too much temptation…they’ll want to pay bills, but a new HDTV is too easy to buy with fresh cash in the pocket. My bet is most of the money will end up in the retail market. Our Government has taught us to spend whether we have the money or not. Just look at what they’ve done!

  3. 3 Lady March 18, 2008 at 7:26 pm

    In Indiana, we are *supposed* to recieve $600+, but it’s according to home much you make, blah blah blah… I only had a short period of work last year, and, while I can file for taxes, I don’t get any money from this.

    Now, for the people in my community that are like me and don’t magically make enough money to recieve this benifit, it isn’t going to help and a lot of those people are the ones that need it..

    But, in the same turn, I know a lot of them would just spend it on cancer sticks.

  4. 4 Husky Fan In New York March 19, 2008 at 8:41 am

    Brad, keep in mind that the Democrats wanted a stimulus plan exceeding $200 billion. I’m not a big fan of the Bush administration, but you’re blaming the wrong side on this one. This stimulus was all about politics and the Democrats wanted to appear like they were doing the most to help the “little people” in an election year.

  5. 5 HB March 19, 2008 at 9:48 am

    The government is desperate.
    They need to stimulate the economy, and they need to do something to counteract the negativism
    that the public has on the current administration. Since they do not know the meaning of savings, they are certain that this money will be put back into the economy. However, we will be paying for it in the long run. The funding for this has got to come from somewhere. Government mentality is to do it now and pay for it later. Or, do it now and let the next administration, deal with the cost later.

  6. 6 Chris March 19, 2008 at 11:47 am

    This is a band-aid. In stead of throwing money at a large segment of the population that is already terrible with their spending habits…why not help educate people to prioritize spending. Hmmm. Instead of getting that new cell phone, or getting that new car or getting into a mortgage that is unrealistic. Why not put money aside and build ones Net Worth. This money will disappear as quickly as it was received and things will return to…well hard times. Normally I am more optimistic but this (stimulation) is pointless.

  7. 7 deal junkie March 19, 2008 at 7:52 pm

    In America, spending money=patriotism

  8. 8 Nancy Hamel March 21, 2008 at 11:21 am

    Let’s see…you overspent and got yourself into a huge mess with credit card debt, a mortgage you can’t afford, car payments that are way over your head, and rather than slap your hands and say “shame on you” the government says “here’s a couple bucks.” When you hand your pocket change to a homeless person, do you think they are putting it in savings so they can improve their life-style, or is it going towards the next bottle of Ripple so they can “numb” their brains to the situation they are actually in? These tax rebates will end up in the pocket of Sam Wall so he can open a few more stores and wipe out a few more businesses, and so the consumer can sit on his packing crate chair in his house that is being foreclosed on and feel happy for a few minutes watching his HD TV (until Cox turns off his cable).

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