It's not clear what exactly is causing the boost in Wal-Mart's (NYSE: WMT) share price today, but shares started climbing right around the time Wal-Mart announced that it will cash rebate checks from Uncle Sam for free. As of 3:15, shares are up about $1.17 or 2% to $58.52.This is a pretty good plan for Wal-Mart. Tax rebates are being sent to over 130 million households this spring, for a total of about $100 billion. And while no purchase is necessary to cash the checks without the usual $3 fee at Wal-Mart, prices at the store are being cut on basics like juice and shampoo to entice rebate recipients to spend a little time in the aisles picking up a few items. As any retailer knows, there's nothing like a customer with a pocket full of extra cash to create a few extra sales.
Wal-Mart is not alone in using this tactic. Sears (NASDAQ: SHLD) and Kroger (NYSE: KR) are offering extra discounts to shoppers armed with rebate checks, but only if customers spend all of their checks at their stores. It sounds like Wal-Mart is offering the better deal. And if Wal-Mart could capture just 1% of the rebate checks flooding the country right now, it could generate an extra billion dollars in sales.
Maybe Bush's questionable stimulus plan should be called the Enrich Wal-Mart Investors Act of 2008.
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Reader Comments (Page 1 of 1)
4-29-2008 @ 5:46PM
roudy11z said...
It has taken to long for Wal-Mart stock to go up but I've stayed the course(John Bogle-Vanguard) after 27 years of owning it. I still plan on being able to leave some of it to my children and grandchildren. I still think there is room for "new blood" at top management(Lee Scott) and on the board(Rob Walton). They sure haven't suffered much like us "little" people from some of these WMT missteps. RoudMan