How will you spend your stimulus rebate?

March 21, 2008 7:04:59 PM PDT
Retailers are licking their chops, anticipating the money from the economic stimulus check you'll get in May will be burning a hole in your pocket. One major electronics chain is already dangling the carrot.

Pity the consumer who bought an HD-DVD player instead of a Blu-ray player. Well, maybe not. Best Buy is sending out $50 gift cards to customers who bought the now discontinued HD-DVD units.

"You can come in the store, you can pick up whatever you like here at Best Buy," says Jeremy Clay of Best Buy.

Clay says the $50 gift card is like a jump start on the anticipated spending spree after those stimulus checks arrive.

"I've seen an increased number of people coming in, doing that extra research, make sure when they come in and when they get that check, they get the right purchase," says Clay.

A national survey says 4.4 percent will spend their checks on consumer electronics, 4.8 percent on clothing and 6.7 percent on travel.

Dan Johnson: "I'm looking for a plasma."

David Louie: "How big?"

Johnson: "Probably a 50-incher."

Louie: "That's going to be a big chunk of change."

Johnson: "Yeah, but the stimulus is going to help a little bit for me."

If the projection is accurate, that would amount to almost $5 billion in sales just for consumer electronics.

Louie: "Are you going to go out and buy now, knowing the check's in the mail or are you going to wait?"

Scott Parra: "I'm going to wait until it comes in just so I don't get ahead of myself and spend all the money."

Louie: "How big of a TV are you going to get?"

Parra: "50-inch."

The stimulus checks may be an unexpected boon for 50-inch screens. Some of the Japanese manufacturers have shifted production to smaller screens, fearing that a U.S. recession might dampen demand for the 50-inchers.

However, the biggest competition for those stimulus checks may be debt and savings.

The same survey noted 20.7 percent plan to pay bills with the money and 22 percent plan to put it in savings.

Lugina Rogers: "I'm actually going to save my stimulus check. I'm not going to spend it at all."

Louie: "And why is that?"

Rogers: "'Cause I need a little bit of a cushion right now."

Betty Cho: "In this economic climate, I'm going to put it right back into savings and save up for a rainy day."

That means retailers may have to come up with sales and promotions to get their share of the consumer windfall.

The stakes are high for retailers. Californians will be getting almost $12.5 billion in stimulus checks, more than any other state.

In a survey from the Consumer Electronics Association, 16.4 percent plan to use the stimulus checks for necessities like food. However, 53 percent plan to spend their check on computers, 39 percent on televisions and 23 percent on mobile phones.