Hand Over Those Tax Rebate Dollars Please

Few catalogers expect a lift from consumer tax rebates

As consumers began receiving their tax rebate checks this summer, retail giants such as Home Depot and Wal-Mart cranked up their marketing efforts in hopes of capturing their attention — and dollars. But few catalogers are expecting to see much of a sales uptick from the rebates.

As part of President Bush’s tax-reform plan, from July through September single taxpayers are receiving a rebate of up to $300, while married couples receive up to $600. Hoping to entice people to spend their tax rebates in their stores, mass-market retailers such as K-Mart and Lowe’s are even offering to cash the checks for consumers.

Catalogers can’t compete with such check-cashing services, of course. Another advantage that retailers have over catalogers: their ability to quickly turn around sales promotions. “We do not have the lead time to do a tax-refund promotion in our catalog,” notes Jim Feinson, president of Burlington, VT-based Gardener’s Supply Co.

But the key reason most mailers aren’t excited about a trickle-down of rebate dollars is that most catalogers target upper-income consumers. Few feel that the rebate checks will jump-start catalog shopping among these buyers. “While increased discretionary income is generally good for catalogers, $300 or $600 is not life-changing and won’t change the buying attitudes of consumers,” says Scarsdale, NY-based marketing consultant Michael I. Grant.

Indeed, Allen Abbott, vice president of marketing for Fleetwood, PA-based Paul Fredrick Shirt Co., said the upscale men’s apparel cataloger was not expecting a boost in sales as a result of the rebates: “The amount coming back won’t drive a tremendous amount of decision making for our men’s apparel.”

San Francisco-based gadgets marketer The Sharper Image does not anticipate a noticeable increase in sales from the rebates either, says spokesperson Kathryn Grant. Nor does Fort Lee, NJ-based ToysRUs.com. “We’re not expecting any big lift from the rebates,” says Greg Ahearn, vice president of business development. “I think marketers that sell back-to-school apparel and home decor will benefit first.”

But the mailers contacted by Catalog Age that sell children’s products, such as Children’s Wear Digest, or that target lower- to middle-income consumers, such as Fingerhut and J.C. Penney, aren’t expecting much business from the rebate checks either.

Contrarian optimists

A few specialty gifts catalogers do expect a bounce, however. In its summer books, North Adams, MA-based gifts cataloger eZiba offered more items at lower price points, such as jewelry and tabletop items, to appeal to rebate recipients, says CEO Bill Miller. The marketer is also e-mailing promotions about new products — and at the same time reminding recipients about their rebate funds — in August and September. “We think we’ll get a lift from the rebates,” Miller says. “We’re cautiously optimistic.”

Los Angeles-based ceramics marketer Cottura also expects some customers to spend the refund on gifts, says president/co-owner Jim Zimmerman. Cottura mailed 37,000 catalogs in mid-July with a dot whack declaring “Annual Thank You Sale 20% Off” in hopes of enticing rebate recipients. “We didn’t want to be tacky or too obvious by saying ‘Spend your tax refund dollars with Cottura!’” Zimmerman says.

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