Everyone wants your rebate

SANDUSKY The checks are in the mail -- but for many people, they're heading right back out.
Annie Zelm
May 24, 2010

SANDUSKY

The checks are in the mail -- but for many people, they're heading right back out.

Though the economic stimulus rebate checks are intended to be spent, many local taxpayers say they're using them to catch up on bills.

Direct deposits of stimulus payments began Monday, with more than 800,000 payments being sent to bank accounts, IRS spokeswoman Jodie Reynolds said. An additional five million payments were mailed Friday, for a total of about 7.7 million payments sent in the first week. And by the end of 2008, IRS officials expect to send more than $110 billion in payments to 130 million households.

Rebate checks to the tune of $600 are expected for single filers whose adjusted gross income was no higher than $75,000 in 2007. Most married couples who made less than $150,000 in 2007 will get $1,200 rebate checks. Married or single parents will get an extra $300 for every dependent younger than 17.

Hoping to entice consumers to spend with them, some businesses are promising discounts and posting ads to "be smart and buy local" -- or at least buy something with their extra cash.

Kroger is offering free groceries through a gift card program available for customers who cash in their rebates. The program allows Kroger customers to exchange their tax refund or economic stimulus checks for a Kroger gift card with an extra $30, $60, or $120 added to it.

"Grocery bills represent a significant expenditure for the average American family," Kroger chairman and CEO David B. Dillon wrote in a statement. "In fact, the average family of four spends between $105 and $235 per week on food purchased at a store and prepared at home. Kroger's program allows our customers to stretch their grocery dollars further."

Sears and Kmart are rewarding customers with an extra 10 percent discount when they cash in their rebate checks for gift cards. Other stores, such as Home Depot, are promoting the "green" movement by encouraging people to purchase energy-efficient light bulbs and appliances so the stimulus check pays off for years to come.

Not all companies are jumping on the rebate incentive bandwagon, however.

"We're counting on our marketing and good sales to get people in the door, and the timing is certainly good for us, with checks to roll out through the back-to-school period." J.C. Penney spokesman Tim Lyons said.

Tom Ripley, general manager of Mathews Ford Lincoln Mercury, said he's still debating whether to offer some type of incentive.

"Some auto dealers are offering to double your rebate, but that's not really our style," he said. "All they're going to do is increase the price of the car ... but I'm sure we'll get a reasonable share of people who do come in and make a down payment with the rebates, and we would certainly welcome anyone who wants to spend their rebate here."

Bruce Weinberg, an associate professor of economics at The Ohio State University, said it's difficult to say whether the rebates will serve as salve to the cracking economy the way some elected officials hope.

"From a political perspective, these things are very appealing because the politician shows they're doing something about the economy, even if it's not much," Weinberg said. "Really, classic economic theory would say this wouldn't do much of anything."

Many area residents say they're planning to save their rebates or use them to pay off what they already owe.

"Pay the bills is all you can do," said Mike Hamad, 48, a father of six in Perkins Township who works as a repairman for International Jewelry. "I have to take care of the important stuff, and the kids come first."

Rachel Scoy, 27, of Sandusky, said she plans to replace the windows in her home and spend the rest of the money catching up on bills.

"We just had a baby, so we're a little behind," she said.

Others are using the extra money on home improvements or indulging in hobbies.

Darlene Armour, 60, of Sandusky, said she plans to build a deck on the side of her Wayne Street home.

Tameeka Smith, 34, said she and her husband, Johnny, plan to use their check to pay off a new boat.

"We were going to bank it, but he really wants a boat," she said, "so it's going toward that and the docking fees."

WHERE IS YOUR REBATE GOING?

Krystal Pocock, 20, Sandusky: "I spent half of it shopping and spent the other half in Canada. I bought tons of clothes, makeup ... just stuff I needed."

John Owens, 32, and Kara Owens, 26, Sandusky: "Boating accessories and birthday presents for June -- five of our family members have June birthdays. Also (Nintendo) Wii accessories; just fun stuff."

Darla Bundschuh, 35, Bellevue: "It's going to bills, especially electricity bills -- this winter killed me."

Marie Wetoskey, 52, Clyde: "Medical bills -- I have over $34,000 in bills from three days in the hospital."

Brett Ward, 38, Bellevue: "Probably to pay the bills -- that's how it is for everyone I work with."