Adding 10% to Your “Economic Stimulus” Rebate
A reader named Elizabeth recently left a comment about Kroger’s tax rebate promotion.
For those of you that are unaware, Kroger (KR) is a large grocery chain based out of Cincinnati, with nearly 2,500 stores spread across multiple states.
Starting May 2nd, Kroger will allow customers to exchange their “economic stimulus” rebate check for store gift cards with an extra 10% added to it. So your $300 rebate is good for $330 at Kroger, $600 = $660, and so on. But wait! It gets better…
According to an e-mail from Kroger Corporate Communications, you don’t actually have to show them your check, thereby allowing anyone to take advantage of this offer:
Customers who do not have a hard copy of their government-issued checks may still take advantage of this offer with cash, a credit card or by presenting a valid personal check to the Customer Service center. Kroger Gift cards do not expire. Bonus amounts cannot be used toward the purchase of alcohol, lottery tickets, pharmaceuticals or tobacco products.
Amounts that differ from those outlined above will be turned into gift cards in $300.00, $600.00 or $1,200.00 increments with the bonus amounts added on and the remainder returned to the customer. For example, if a customer has a tax refund or stimulus check of $415.50, the customer will receive a Kroger gift card valued at $330.00 and the remaining $115.50 will be returned to the customer.
Apparently, once this program starts, anyone can walk in off the street and take advantage of the 10% bonus. You can even use a reward credit card to wring a few more bucks out of this deal – details here. Just don’t lose that gift card once you buy it!
Apparently Sears is offering a similar promotion, though you have to actually present your check to participate.
Disclaimer: Discover is a paid advertiser of this site.
Reasonable efforts are made to maintain accurate information. See the Discover online credit card application for full terms and conditions on offers and rewards.
Modified on July 26th, 2008 - 13 Comments
Filed under: Frugality, Taxes
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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13 Responses to “Adding 10% to Your “Economic Stimulus” Rebate”
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April 23rd, 2008 at 11:16 am
Great Post! I hadn’t heard about Kroger’s, but there are several retailers that are doing the same thing. One that I know of is Best Buy. So check around this may be used by other retailers and if you are in the market could save you some money.
April 23rd, 2008 at 11:43 am
Ahh, a sign of desperation by retailers? A 10% discount by a grocery chain is significant since grocery margins tend to be quite thin. Although I suppose they expect this gambit to increase inventory turnover, so they may yet come out ahead.
April 23rd, 2008 at 1:10 pm
I’m a faithful Kroger’s shopper, so I’ll probably take advantage of this. I suppose they’re banking on some people forgetting about or losing their cards.
April 23rd, 2008 at 6:05 pm
Mo Money: Do you have a link regarding Best Buy doing this 10% bonus? I can’t find anything on the internet regarding it.
April 24th, 2008 at 8:44 am
Cool, I had been wondering what they would do if you did not have a check, but direct deposit. I don’t buy that many groceries, but it is the only store I go to, I might go straight for the $660 card. Hard to pass up a free 60 bucks, and if I can put it on my rewards card all the better!
April 24th, 2008 at 7:38 pm
Nationally, the redemption rate on gift cards is about 85% over the life of the card, so this is probably still a revenue-positive move for Krogers.
April 24th, 2008 at 9:12 pm
That is a great statistic Derscheid, but there are so many reasons that gift cards would not get used that don’t apply in this case that I don’t believe they will benefit from non-use of the cards.
Just assuming here, but many gift cards that don’t get used are probably for places that you don’t go and don’t spend money at often. Most cards are given as gifts to people, not purchased for your own consumption.
I believe these two reasons alone would make up most of that 15% that don’t get used.
April 25th, 2008 at 12:36 pm
I think that this is a great idea for those who will use it. BUT, in response to Kyle, grocery chains margins are NOT thin!! If you use the card for the stores weekly loss leaders, you will be getting a deal – the profit margin on the regular priced stuff is very high indeed! I have the hard earned benefit of being able to use the military commissaries where the prices are marked at 5% above cost by law, and the difference is striking! In Colorado anyway, the Kroger owned stores being the highest! If you’re dilligent about your groceries, get the Kroger card – if not, go with the Sears/KMart/Land’s End one.
April 27th, 2008 at 8:48 am
This is also being done at Albertsons.
As for grocery store margins, it really depends on the product. In the fresh departments, it roughly follows that the margin is higher with how much work goes into the product. Some things come in pre-done, and the margin is much lower than the products that require much more work. Of course, margin isn’t everything, because that doesn’t consider how much the workers are getting paid.
April 27th, 2008 at 4:44 pm
My wife just told me that Meijer (another grocery store) is also doing this.
Norm
April 28th, 2008 at 3:10 pm
^
Can you find a link to where Meijer announced this? I just want to be sure. Thanks.
April 30th, 2008 at 11:31 am
I can add 16% to my economic stimulus check… by paying off my last high rate credit card!
Sadly this does nothing to stimulate the economy but in the year to come it will help my bottom line and is an important milestone for me.
April 30th, 2008 at 5:36 pm
My friend got some Fred Meyer’s cards (a Kroger store) and used them to buy Visa Gift Cards, there by freeing up the money to be spent at any store.
I guess it comes down to your sense of ethics on whether you could take the 10% and run. I couldn’t.