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Is Spending Money to Save Money a Bad Message?

While several retailers have been offering what they call bonuses for spending your entire check either exclusively at their stores or promoting special deals during the time Americans are receiving their checks, some of their competitors are criticizing them for encouraging irresponsible behavior. According to the New York Times, stores like Sears, Supervalu, and Kroger's are offering shoppers a 10 percent bonus if they buy a gift card with their checks and Domino's is offering a “recession-busting” special of three pizzas for $12, while Home Depot is encouraging customers to buy energy-efficient products to save money.

The Times points out that the disapproving companies are concerned with the oxymoronic nature of these marketing campaigns that encourage a "spend money to save money" mentality. Jean Ann Fox, director of financial services at the Consumer Federation of America said, “A lot of people probably have high-cost debt they need to pay off with this money. And if you’ve tied up your stimulus check in a card that can only be used at one store, you can’t do that.” On the other hand, the vice president for marketing services at Sears said, "We don’t think of it as locking it up, but rather giving people a choice of how to spend it.” Where do you stand?

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looseseal looseseal 8 years
Sears and etc aren't holding a gun to people's heads and making them spend. People can freely choose whether they want to take advantage of the offers. It's not Sears' fault if some stupid person decides to buy a new couch instead of paying his/her debts.Seriously, just about every time I go shopping at any time of the year, the salesperson will try to get me to spend more by offering more discounts if I buy more. But I keep a clear head and stay well aware of the fact that I don't need to buy more, so I do not buy more.Stores are not here to help us with our finances. Nor should we really expect them to.
looseseal looseseal 8 years
Sears and etc aren't holding a gun to people's heads and making them spend. People can freely choose whether they want to take advantage of the offers. It's not Sears' fault if some stupid person decides to buy a new couch instead of paying his/her debts. Seriously, just about every time I go shopping at any time of the year, the salesperson will try to get me to spend more by offering more discounts if I buy more. But I keep a clear head and stay well aware of the fact that I don't need to buy more, so I do not buy more. Stores are not here to help us with our finances. Nor should we really expect them to.
TsuKata TsuKata 8 years
Isn't it an economic stimulus check? Given that, why would it be so stupid to spend it? Spending it is the point. Otherwise, it's a stupid move by our government, right? And our government *never* does anything stupid, right? :)
mini_pixie mini_pixie 8 years
The thing you have to keep in mind, Ilanac, is that paying down debt will not boost the economy. I personally don't know anyone who is planning on using their rebate to make major purchases, we all seem to be in the same boat of the bank/ credit card co's will be getting our money, but the whole point of these checks is to get people putting money back in the economy instead of the bank. That being said, I don't think people advertising "recession sales" is any different than "no sales tax on labor day weekend" promotions. I don't like them asking for the whole check, but sales are sales no matter what the exuse is.
mini_pixie mini_pixie 8 years
The thing you have to keep in mind, Ilanac, is that paying down debt will not boost the economy. I personally don't know anyone who is planning on using their rebate to make major purchases, we all seem to be in the same boat of the bank/ credit card co's will be getting our money, but the whole point of these checks is to get people putting money back in the economy instead of the bank.That being said, I don't think people advertising "recession sales" is any different than "no sales tax on labor day weekend" promotions. I don't like them asking for the whole check, but sales are sales no matter what the exuse is.
bellaressa bellaressa 8 years
I am with ilanac13. I am just amazed that if you spend your entire check, let's say $ 600.00 all you may get for an incentive is about $40 in return; ridiculous. During this time, people are losing their homes and going into mountains of debt; not to mention losing their jobs. I say if you can spend it, if not try to save for a raining day or pay down any existing debt. On the other hand, consumers need to get more savvy and learn to by pass this type of incentives.
shanimalcracker shanimalcracker 8 years
I can't imagine taking an entire rebate check and spending it at one single store, unless it was a supermarket or some place that I absolutely HAD to spend money at. It makes perfect sense on the businesses' end, but it definitely is not the best idea in my opinion for the average consumer. This is, unless you desperately need a refrigerator or something huge that a discount would help you get to.
mondaymoos mondaymoos 8 years
In the cases of Sears and Home Depot, I agree with you, ilanac. For groceries, however, I shop exclusively at a Kroger-linked store because it's within walking distance. I KNOW that over time I'm going to spend 300+ on groceries... why not get a 10% increase and take the money you'd normally be spending on groceries and funnel it into those same credit cards/savings accounts?
mondaymoos mondaymoos 8 years
In the cases of Sears and Home Depot, I agree with you, ilanac. For groceries, however, I shop exclusively at a Kroger-linked store because it's within walking distance. I KNOW that over time I'm going to spend 300+ on groceries... why not get a 10% increase and take the money you'd normally be spending on groceries and funnel it into those same credit cards/savings accounts?
ilanac13 ilanac13 8 years
i'm glad that we're all on the same page about this one. i think that it's really irresponsible for there to be incentives to spend your entire check when there's such a mortgage and finance crisis going on. it's a shame that retailers want to boost their business soo badly that they'll stoop so low. i think that before people spend money on 'things' they should take a good look at their finances and figure that out first. my #1 priority is to pay off some of my debt with what i got back because i think that it's entirely too horrible that people are in such debt. i don't get the offer of help from the govt with my mortgage etc...so i need to be conscious about how i spend my $$
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