By Archi Sarkar- Medill News Service
That’s right! This is exactly what retailers are saying to consumers this month. Tax rebate checks totaling up to $105.7 billion are now in, and retailers are fervently hoping for all that extra money to come right through their stores.
The hope is still on…
According to a survey by the National Retail Federation (NRF), consumers plan to spend nearly 40 percent of their tax rebates, pumping at least $42 billion back into the economy. Though this is a 2 percent decline from the estimated $43 billion according to NRF’s February survey, consumers will still be investing on necessities like gas and food instead of electronics and apparel.
The survey estimates that 17.2 million people will use some of their tax rebate checks to pay for inflated gasoline prices, while 21.2 million people will spend a portion of their checks on food.
“For many consumers, struggling with rising bills and lowering home values, economic stimulus checks could not come at a better time,” said NRF President and CEO Tracy Mullin.
It is expected that consumers will spend a total of $28.1 billion to pay down debt. It is also expected that consumers will save a total of $20.1 billion; invest a total of $3.4 billion for future gains, and pay medical bills totaling up to $4.9 billion.
Thereby, only 2.7 million people are expected to spend their checks on furniture, while 2.4 million people spend on purchasing a vehicle and 2.9 million invest in the service sector, like for a trip to the salon or spa. In terms of consumer spending, the amount equals to spending for major holidays like Valentine’s Day or Mother’s Day, according to the NRF.
“Some retailers are helping customers stretch the value of their rebate check further by tacking on an additional ten percent to gift cards purchased or holding special in-store promotions,” said Phil Rist, vice- president of strategy for BIGresearch, a consumer market intelligence firm that provides consumer insights.
And in case you are still wondering about how any of this is going to affect you, simply check your mail box for tones of glossy paper that read: “buy two get two free” or “extra 20 percent off with free shipping”. Retailers, especially those dealing in consumer durables are also accepting competitors’ coupons. Retailers are desperate to improve sales and lure consumers into spending rebate checks at their stores.
“Retailers are aware that the tax rebate checks will only affect sales temporarily. So, they are trying their best to attract consumers at this time,” said Jharonne Martis, retail analyst with Thomson Financial.
Most consumers also seem to agree with Martis that the economic stimulus package may not exactly work as a long-term relief for the economy. In an online consumer poll by CNNMoney.com nearly half of them said that they would use the money to pay off bills, while 22 percent of them said that they would put the money straight in a bank account, instead of spending on a new dress or an electronic item.
So, now all you have to do is decide which retailer you wish to support to stimulate the economy. Will you spend on food and gas or a new dress or an iPhone or will you finally buy that new eco-friendly refrigerator you’ve always wanted? Or will you simply support banking retail and save all you’ve got?
If you are still undecided, I’d recommend: Asking the Expert!