Wal-Mart to cash tax rebate checks for free

NEW YORK (Reuters) - Wal-Mart Stores Inc unveiled plans on Tuesday to entice U.S. shoppers to spend their tax rebates in its discount stores, offering to cash the checks for free as it announced price cuts on staple goods such as cereal and lunch meat.

While other retailers are requiring consumers to spend some or all of their rebate checks in their stores to be eligible to receive special deals or discounts, Wal-Mart said no purchase was necessary to cash the checks at its stores.

“If you want to cash the check at Wal-Mart and go spend it at a competitor, that’s fine with us,” said Eduardo Castro-Wright, head of Wal-Mart’s U.S. operations, speaking at a Lehman Bros retail conference broadcast over the Internet.

He said Wal-Mart hoped that once customers cashed their checks at its stores, they would shop there as well.

Wal-Mart has cut prices on basic items like shampoo, juice and sports drinks to coincide with distribution of the rebates. It plans to announce more price cuts in coming weeks.

Tax rebates began arriving in U.S. consumers’ bank accounts on Monday. They are part of Washington’s $152 billion 2008 economic stimulus package, and rebates totaling more than $100 billion should be in consumers’ hands by the end of June.

Retailers are eyeing the rebates as a way of boosting business, and many have plans to get shoppers to spend the cash in their stores.

Sears Holdings Corp is offering a 10 percent bonus if customers convert their entire stimulus check into a Sears or Kmart gift card. For example, if the check is $600, Sears will give consumers gift cards for $660.

Retail food chains Kroger and Supervalu Inc will allow customers to exchange checks for a store gift card of a higher value.

Some retailers were less enthusiastic about what benefits they expect to see from the rebate.

At the retail conference, a Macy’s Inc executive said the company did not expect much benefit from the rebate. Chief Financial Officer Karen Hoguet said she expected most of the money to go to food and gasoline bills.

Wal-Mart also said it would refund the purchase fee on its Wal-Mart MoneyCard when any portion of the stimulus check is loaded onto the card.

The Wal-Mart MoneyCard is a reloadable prepaid Visa the retailer launched nationally last year.

Wal-Mart shares closed up $1.26, or 2.2 percent, at $58.61 on the New York Stock Exchange, a new 52-week high. The shares closed as low as $42.09 in the past year.

Additional reporting by Karen Jacobs in Atlanta; editing by Maureen Bavdek, Toni Reinhold and Gunna Dickson