Posted on: Friday, August 8, 2003
Tax credit checks fuels spending spree
By Theresa Howard
USA Today
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| Wal-Mart and other retailers have been running ads linking child tax credit checks and back-to-school shopping. The checks and an overall upswing in spending have combined to boost retail sales by 14 percent, ShopperTrak said.
Associated Press |
The IRS mails out a third and final wave of rebate checks today. And the
$180 billion retail industry, in the throes of back-to-school sales, is hankering for an even bigger share of the estimated $14 billion in checks.
About 24 million families will get an average $583, the IRS says. It's the result of a $350 billion tax package signed into law in May. Those dollars, along with an overall uptick in retail spending, is helping recharge the industry and could portend a robust holiday shopping season, retail's most critical period.
"Put a little money in people's pockets, and we'll spend. We're Americans," says Tad Shepperd, president of ShopperTrak, a company that measures general merchandise, apparel and furniture sales. The company said retail sales jumped 14 percent last week from the week before.
Retailers typically rack up about $14 billion in back-to-school sales. But they're looking to cash in even more:
• Home Depot: National TV ads promote home improvement projects for kids as a way to get parents into stores. Among the suggestions: upgrade a bedroom or expand the garage to make room for a kid's first car.
"It's the first time we've done an ad like this," says David Sandor, Home Depot spokesman. It's working, he says. Consumers are coming in to cash checks with or without a purchase.
• Sears: The department store giant is making the most pointed drive for back to school with radio ads and in-store signs that encourage shoppers to bring in their rebate checks for deals, especially on apparel.
"Our back-to-school sales are strong," says Lee Antonio, spokeswoman for Sears, whose slight decline in July same-store sales was better than expected. "It's a smart strategy to tie the tax credit with back-to-school purchases because back-to-school is a key thing right now." The only hitch: Purchase is required to cash checks.
• Wal-Mart: The world's biggest retailer is seeing the same success it saw when it offered free check-cashing with IRS rebate checks two years ago. About 15 percent of the check is spent in-store, Wal-Mart says. That helped contribute to a better-than-expected 4.6 percent jump in July same-store sales.
"Being able to offer services like this goes a long way to making Wal-Mart one of the places people want to shop," says Tom Williams, Wal-Mart spokesman. "And that's our goal."
