Apr 18, 2008

Kroger offers an extra 10% on your money - should you take it?

The grocery store chain Kroger announced that it will give customers who turn their tax refund or rebate checks into store credit an additional $30, $60 or $120 (depending on whether you convert $300, $600 or $1200). The conversion program will be available beginning May 2 at all Kroger stores, including Kroger, Baker's, City Market, Dillons, Fred Meyer, Fry's, Gerbes, Hilander, Jay C, King Soopers, Owen's, Pay Less, Ralphs, Smith's and QFC.

Since my refund and rebate will be directly deposited into my bank account, I was pleased to read the following:
Customers who do not have a hard copy of their government-issued checks may still take advantage of this offer with cash, a credit card or by presenting a valid personal check to the Customer Service center.
I don't spend at lot of money at Ralphs, but I do shop there a couple of times a month - often enough to make it worthwhile to convert $300 into $330.

In deciding whether you want to take advantage of the Kroger program, consider the following:
  • How often do you shop at Kroger stores? Your gift card won't expire, but the longer you have it, the more likely it is that you'll forget about it and not use it up. (Which is probably what Kroger is counting on many people to do.)
  • How much interest would your money earn in savings? While it's unlikely your money will earn 10% interest, the longer it would be sitting in your savings account, the more interest it will earn. So this factor needs to be considered in conjunction with the first factor.
  • Do you earn rewards when you pay for your groceries? If you pay for groceries with a credit card, you may be earning rewards for your purchases. Some credit cards offer 3% cash back on grocery purchases. That diminishes your 10% return from Kroger. (But note that you can acquire your gift card by paying the refund or rebate amount with a credit card, which would make this point moot.)
  • How disciplined are you when it comes to grocery shopping and staying within your budget? The Kroger gift card won't help your finances if you use it to buy frivolous items instead of sticking to your grocery budget.
Other retailers are also offering bonuses for converting your refund or rebate to a gift card. In fact, Sears made their announcement on Tuesday.

Did I miss anything? Can you think of anything else to consider?

Via My Good Cents and The Consumerist.


Brenna said...

This is kind of off subject, but how do you know that your rebate will be direct deposited? If you had your refund DD'd, do they automatically DD your rebate? Because that's something I've been wondering about.

Chief Family Officer said...

@Brenna - Yup. Per the IRS , if you opt to get your refund via direct deposit, you'll get your rebate the same way. Even if you aren't getting a refund, if you filled in the direct deposit info on your return, you'll receive your rebate that way.

Anonymous said...

This is the first I've heard of this. We don't have Krogers stores in my area (Sears, yes). But we were planning to deposit our rebate into our IRAs because with house and kid expenses, we haven't been able to put much in the past 2 years.

Chief Family Officer said...

@Margo - Did you check the list of the entire family of Kroger stores? I had no idea there were so many different store names. It's a bummer if there isn't one near you, but keep your eyes and ears open - I wouldn't be surprised if other retailers announce a similar plan before the first rebates are issued the first week of May. (Of course, if I read about any good ones, I'll let you know!)

Anonymous said...

This would be a great deal, if only I shopped at their stores! Oh well. The more I analyze my own spending, the more I see how I could be more thrifty in my grocery shopping. I think I'd probably burn through store credit faster than cash because I can always apply the cash to my mortgage.