Retailers add spin to tax-rebate checks

With many consumers about to receive tax rebates worth hundreds of dollars, a handful of retail chains are dangling discounts and promotions to try to get people to spend their checks in the companies' stores.

As consumer spending slows, these retailers have hit on a marketing pitch: We'll make your tax rebate go further.

"The trick will be to convince the consumer that the rebate check is bigger than it is," says Pat Conroy of consulting firm Deloitte & Touche.

The tax rebates — ranging from $300 to $600, or up to $1,200 for married couples who file jointly — will be available to some direct-deposit taxpayers as early as Monday, though checks by mail will take longer. Many parents will receive an additional $300 per child.

Wal-Mart, the largest U.S. retailer, says it plans to announce a tax-rebate-related program within a few days. Here's what other retailers plan:

•Supervalu, parent company of Albertsons, Jewel-Osco, Shop 'n Save and other grocery chains, says shoppers will be able to exchange tax-rebate checks for store gift cards, with an extra $30 added for every $300 in rebate checks. The offer will be valid through July 31.

•Sears will also give customers an additional return if they spend their entire rebate on a gift card, for use at Sears, Kmart or Lands' End stores. From May 14 to July 19, customers can cash in the rebates for a gift card in the amount of the check plus 10%. The gift cards carry no expiration dates or fees.

•Similarly, Kroger grocery stores will add 10% to the value of rebate checks when customers use them in $300 increments to buy Kroger gift cards. Customers with a rebate check worth more than $300 but less than $600 would get a $330 Kroger gift card and the rest of their rebate back.

•Staples is using promotions to urge small-business owners to spend their rebates. Until May 4, it's offering $50 off purchases of $500 or more and $150 off furniture costing at least $1,000. Through June 30, for purchases of more than $499 with a Staples credit card, the store will charge no interest and require no payments for six months.

•Home Depot is urging customers to use rebates to invest in the environment and cut energy bills. It'll offer discounts through July on compact fluorescent light bulbs and Energy Star appliances. That helps "take a short-term stimulus and turn it into a long-term investment," spokeswoman Jean Niemi says.

Linking the rebates to gift cards is a smart tactic, Conroy says, because shoppers typically spend more than the value of a gift card when they use one.

"The key is to get through the clutter of the media and make the offer targeted and compelling," says Ann Raider of Affinity Solutions, which develops corporate marketing programs.