This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Wal-Mart, Home Depot Roll Out Red Carpet for Tax-Cut Crowd

Facing a sagging consumer economy, two big retailers find themselves in a frenzy to cash in on the Bush tax cut.

For months, investors and analysts have chirped that this year's $38 billion tax rebate could jumpstart lagging retail sales. Now that checks are due to start hitting mailboxes in coming weeks, Home Depot (HD) and Wal-Mart (WMT) are offering to cash those checks free of charge. In doing so, they hope to grab a bigger share of consumers' windfall.

In a statement issued Wednesday, Wal-Mart, the world's largest retailer, said, "We're providing this service for the convenience of our customer." Of course, the company wouldn't mind if customers dropped some benjamins while they're at it, by converting the rebates into shopping cards or simply using the proceeds to buy merchandise.

Home Depot, meanwhile, recently launched an advertising campaign offering consumers a similar service. This follows a study the company conducted that claimed 30% of the nation's homeowners are preparing to invest their rebates in home improvement.

Home Depot and Wal-Mart were already widely seen as beneficiaries of the tax rebates, which are considered likely to boost spending by lower- and middle-income Americans. Yet the companies' latest efforts suggest they are taking nothing for granted, especially as retail sales continue to disappoint and hopes for a second-half recovery in consumer spending dim.

The tax rebate is the first since 1975. It will put about $300 in the pockets of most single people and give $600 to married couples. If history is a guide, Wal-Mart and other discount retailers could see a boost to their sales and stock prices from the rebates. The 1975 rebate resulted in a sharp spike in consumer spending, driving a 157% spike in Wal-Mart's share price in the first half of that year.

This year Wal-Mart shares are off about 7.5%. They lately traded up $1.18 at $48.68, while Home Depot shares were up 40 cents at $45.40. Home Depot shares are flat for the year.

One of Wal-Mart's chief competitors, Target (TGT), won't match the company's offer. Douglas Kline, Target's spokesman, said the company doesn't need to offer consumers anything other than its already low prices.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,804.71 -238.19 -1.40%
S&P 500 1,946.16 -26.13 -1.32%
NASDAQ 4,422.0850 -71.3050 -1.59%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs