Retailers Launch Their Own Stimulus Packages

Michael Golata had been watching his spending carefully. As a contractor in Louisville, Ky., for United Parcel Service, he drives emergency medical equipment to hospitals when M.R.I. or CT scan machines break down.

When he asked U.P.S. if more routes were available, the company told him there was so much work that he should bring on as many drivers as he could afford. There was just one problem: Mr. Golata owned one truck, and he was driving it all the time. Online, he had found a used white Dodge Sprinter for $12,500.

With just a few thousand dollars in cash, he tried to get a bank loan but was denied by two local banks because the truck was too old and had too much mileage. He decided an S.B.A. loan would be too much trouble, and he rejected as absurd a loan from a commercial finance company with a 21 percent interest rate and payments of $450 a month.

About a month ago, Mr. Golata, a Sam’s Club member, clicked through the retailer’s Web site and found a page describing S.B.A. loans offered by the retailer. He filled out an online application, and, by the next day, got a phone call from Superior Financial telling him he was approved for a $10,000 loan, with an interest rate of 7.25 percent over 10 years.

“It made the payment, like, $118 a month. I thought I was dreaming,” Mr. Golata said. Mr. Golata immediately bought the Dodge, and hired three drivers. He went from billing U.P.S. $3,000 a week to $8,000, he said.

A little under half of Sam’s members are small-business customers, and they account for a little more than half of the revenue at the retailer. As its net sales began to slip last fall, Sam’s surveyed small-business customers and found that tight credit was partly to blame.

In the survey, said Catherine Corley, vice president for member services at Sam’s, a division of Wal-Mart, “fully one-third said ‘I didn’t buy what I needed to buy at Sam’s Club because I didn’t have the money.’ It really motivated us to say, ‘We’ve got to find some solutions.’ ”

Sam’s has done only a small test of the S.B.A. loans, and so far about 200 people have applied, with about 45 percent being approved, said Tim Jochner, chief executive and founder of Superior Financial. Sam’s is considering offering other financial products through third parties to help ease customers’ finances, like working-capital loans or peer-to-peer loans, said Hiren Patel, director for financial services at Sam’s.

Retailers Offering Stimulus

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“We’re not necessarily trying to be a bank, we’re just trying to bring to them, much as we do with products, the things they need,” Ms. Corley said.

Other retailers are taking slightly different routes to economic recovery. Beginning in the fall, Target will offer its holders of its Target-branded credit and debit cards 5 percent off every purchase. Target expects that it will add a percentage point to comparable-store sales in the fourth quarter.

Toys “R” Us is asking consumers to create a sort of grown-up piggy bank, and put money into a holiday fund that can be spent only at the toy store. Toys “R” Us will add 3 percent to the account’s balance in mid-October.

And Office Depot is giving away products. Trying to lure back-to-school shoppers, it will soon sell some supplies, like glue sticks and scissors, for less than $1. It also will give away other items, like markers, free, even without a purchase.

Staples, meanwhile, is offering several products for a nickel or a penny, and when shoppers buy a backpack during the back-to-school period, Staples will give them a gift card equal to the cost of the backpack.

“On that particular one we probably don’t make money, but in general what we’re hoping to do is get customers into our stores,” said Demos Parneros, president of United States stores for Staples, “and then buy everything else that they need.”

Of course, smart shoppers can take advantage of these programs without necessarily improving the stores’ revenues.

Mr. Golata, the truck driver, said he was delighted with the loan program. But if the point of it was to free up his cash at Sam’s, it didn’t quite work.

He is saving again — so he can get another Sam’s Club loan in six months and buy another delivery vehicle. “It’s not like it made me spend more than I normally would,” he said.