Many of the US’s biggest retailers are offering promotional incentives for customers to trade in tax rebate cheques, as the first payments from President Bush’s US$100 billion (£50.21 billion) tax giveaway arrived in bank accounts and through the post on Monday.

About 130 million US households with single incomes below US$87,000 (£43,665) or joint incomes below US$175,000 (£87,835) are expected to receive rebates ranging from US$300 to US$1,200 (£150 to£600), as part of the US government’s effort to stimulate the country’s ailing economy.

With economic uncertainty prompting many to say they will save rather than spend the windfall, US retailers are going all out to promote consumer spending.

Wal-Mart was set to unveil its plans for a tax rebate-related programme late this week. It is believed to be considering offering to cash rebate cheques at no charge.

At Supervalu – the parent company of Albertsons, Jewel-Osco, Shop ’n Save and other grocery chains – shoppers will be able to exchange tax rebate cheques for store gift cards, with an extra US$30 (£15) added for every US$300 in rebate cheques.

Sears will also give customers an additional return of 10 per cent if they spend their entire rebate on a gift card for use at Sears, Kmart or Lands’ End stores, as will grocer Kroger.

Staples is using promotions to urge small business owners to spend their rebates and, until June 30, purchases of more than US$499 (£250) made with a Staples credit card will attract no interest and require no payments for six months.

MHE Retail chairman Edward Whitefield said: “With consumer confidence in the US so low, most of this money will be used to reduce consumer credit or put into savings. I can see no more than 25 per cent of it going to retail sales. That may be enough to keep retail sales flat, but it will not do anything for retail growth.”

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