Wal-Mart "Banking" On Your Stimulus Rebate Check - Holiday Central

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It's a make-it or break it time for retailers. The holiday selling season is always a critical time for retailers, but this year this may be even more true. With several retailers already falling victim to a drop in consumer spending, and filing for bankruptcy, retailers will be navigating through some tricky waters. Consumers are strapped for cash due to high energy and food prices, and unemployment is rising. The recent credit crunch has made it more challenging for retailers and consumers to borrow.

This blog will look at the winners and losers in the retail space. Who has the right strategy to capture consumer dollars? It also will look for trends in consumer spending and how that will impact the economy.

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Apr.29

9:17 AM ET

Tuesday, 29 Apr 2008

Wal-Mart "Banking" On Your Stimulus Rebate Check

Posted By:Margaret Brennan

Topics:Consumers | Retail Sales

Sectors:Personal and Household Goods | Food and Beverage | Retail

Companies:Kroger Co | Supervalu Inc | Sears Holdings Corp | Wal-Mart Stores Inc

Wal-Mart
Wal-Mart
Wal-Mart is doing what none of its competitors can do to gain its share of the $106 billion in economic stimulus check rebates that Americans will be receiving over the next few weeks.

The world's biggest retailer Wal-Mart [WMT Loading... () ] will:

1) Cash rebate checks free of charge.
2) Allow customers to redeem checks for Moneycards free of charge.
3) Cut prices on key food items including meat, pasta, frozen food, shampoo, juice and other consumables.

Why act like a bank? None of its competitors can. Sears/Kmart [SHLD Loading... () ] , Kroger [KR Loading... () ] and Supervalu [SVU Loading... () ] require customers to spend their checks as gift cards in store. While those retailers are offering "free bonus money" to customers, Wal-Mart is negating that by flexing its pricing power as the world's biggest grocer and undercutting prices on basic food items.

Wal-Mart already cashes a million checks a week, so prepare for that number to grow. It's an interesting way for the store to expand its "mindshare" in financial services. And stay tuned for more cuts in the months to come.

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