Rebate Checks: no economic stimulus.

This Spring, consumers were excited that rebate checks would soon be landing in their mailboxes and bank accounts when a Harris Poll found that 45 percent of Americans believed these checks would help stimulate the economy. Now that summer is over and the rebate checks are cashed, attitudes have changed. More than half of Americans (52%) say spending the checks did not stimulate the economy and only 37 percent say that it did.

These are some of the results of a nationwide Harris Poll of 2,710 U.S. adults surveyed online between August 11 and 17, 2008 by Harris Interactive. Some other findings include:

* More than half of Republicans (52%) say rebate checks did stimulate the economy while three in five Democrats (61%) and over half of Independents (56%) say that it did not;
* In April, just under three-quarters (73%) of Americans predicted they would receive payment; 71 percent now say they did receive a rebate check; and,
* Seven in ten Americans with incomes of $34,999 or less and incomes of $75,000 or more (70% each) say they received a check. Greater than four in five adults with incomes of between $35,000 and $49,999 (86%) and between $50,000 and $74,999 (87%) say they received rebate checks.

How the Checks Were Spent

While the government hoped that the checks would be spent to spur the economy, the reality was a little different.

What was predicted in April:

* Americans said they would use some of the rebate to reduce their non-mortgage debt, paying off bills or credit cards (38%) or adding to their cash savings (35%).
* One in five (21%) said would spend the money on other things they wanted to buy;
* Twenty percent said they would use the rebate to take a trip for leisure purposes;
* Seventeen percent said they would spend their money on home improvements while sixteen percent said they would use the money in restaurants and for dining out;
* One in ten said they would use the money for technology devices or entertainment events.

What Happened in August:

* People primarily used their rebate checks to reduce non-mortgage debt, such as paying off bills or credit cards (36%) and to add to their cash savings (29%);
* One in five (21%) did actually spend the money on other things they wanted to buy;
* Just one in ten (11%) actually used the rebate to take a trip for leisure purposes; and,
* Americans spent their money on home improvements (14%) and in restaurants and dining out (12%);
* Only five percent said they used the money for technology devices or entertainment events.

So What?

As predicted, much of the rebate money ended up deposited in savings or being mailed to credit card issuers. Retailers did try their best to get some of the rebate money, but that did not end up occurring as much as they, and probably the White House, wanted.

The economy is still one of the most important issues facing the country – something that did not change from late spring to the end of the summer. With the economic uncertainty, Americans thought they would want to put away some cash and help reduce debt and that is exactly what they did. What seemed like a great economic fix in the earlier part of the year has not panned out and Americans are still looking for Congress and the White House to provide some relief.

With the November elections just two months away, it is unlikely that either body will be able to actually do something that will help voters before the election. How they react to that will definitely impact their voting behavior in November.

To view charts CLICK above on ‘More Images’.