Wal-Mart to cash rebate checks for free, shares rise

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.