May 16th, based on the last two digits of your Social Security number.With any luck, you filed a 2007 tax return and your household will be one of the 130 million recipients of an economic stimulus check. The government began distributing the checks on April 28th to those who opted for a direct deposit and snail mail checks go out starting
And if you’re just not sure what to spend it on, corporate America will gladly step in and offer some ideas.
The retailer Sears Holdings (SHLD), which owns Sears, Kmart, and Land’s End, will convert the amount on an economic stimulus check into a Sears Holdings gift card and add an additional 10% the amount of your check. But there’s a catch: The customer must convert the entire amount of their stimulus check into a gift card to be eligible for the bonus.
Customers only have from May 14th to July 19th to take advantage of the offer, the gift cards have no expiration date by which they must purchase their fleece or their Martha Stewart Everyday cookie baking sheets. “You could spend it on your holiday shopping,” suggested Kirsten Whipple, spokeswoman for Sears Holdings.
Wal-mart (WMT) and its Sam’s Club warehouses will not charge their check cashing fee – usually up to $3 – when cashing customer’s stimulus checks. Customers can load their stimulus checks for free onto Wal-Mart Money Cards, which are backed by Visa (V), functions as a debit card, and can be used wherever a Visa card is accepted.
Radio Shack (RSH) is offering 10% off purchases of $50 more at their store when the customer spends their stimulus check between May 4th and July 12th. But Radio Shacks’ deal similar to Sears’ in that if the customer uses their stimulus check to pay for any item, the customer must then place the entire contents of their stimulus (up to $2,500) onto a prepaid MasterCard (MA), explained spokeswoman Wendy Dominguez. The card can be used wherever MasterCard is accepted and on which normal ATM withdrawal fees will apply.
The grocery stores owned by Kroger (KG) is also offering a deal, promising free groceries for customers who fork over their stimulus checks to put on a Kroger gift card. Customers will receive an extra $30 for $300 check, an extra $60 for a $600 check and $120 for a $1,200 check. If the amount of the stimulus check is an amount different from the figures above (for example, $375), Kroger will provide the gift card in the nearest possible amount (for example, $300 with the $30 bonus) and return the remaining amount ($75) to the customer. This offer is valid from May 2 until July 31st.
SHOP ‘N SAVE
Another grocery store, Shop ‘n Save, owned by Supervalu (SVU), offers a similar deal. For each stimulus check in an increment of $300 that is converted into a gift card at a store’s customer service center, Shop ‘n Save will add $30. This offer extends between May 1 and July 31st.
Despite the fact the stimulus checks are designed to ostensibly revive economy, retailers' call to shopping garnered some criticism from financial planners.
"I'm not initially comfortable with these offers," writes Tina Anders of Anders Financial Planning of Petaluma, CA, in an email. "Most people who qualify to receive stimulus checks are middle-income earners who may be better served to put the money into an emergency account, pay off a credit card debt, or invest in their futures by putting the money in an IRA. Spending the money in the retail market smacks of perpetuating what many folks need to steer away from -- spending on 'stuff.'"
Kevin Brosious, a financial planner and president of Wealth Management, Inc., in Pennsylvania, agrees that he’d advise clients with extra cash to pay down their credit card debt before hitting the stores. But, Brosious also sees the stimulus checks from the point of view of the retailers.
“As the economy’s going down, the retailers are certainly hurt and they want people to come in,” he says. “I understand the purpose of it is to stimulate the economy.”
If you enjoyed this piece, you may also be interested in reading “Don’t Fall Victim to a Stimulus Check Scam”.