Field Notes Inside an Integrated Communications Agency

An economic stimulus only stimulates if injected directly back into the stream of free market capitalism. If you've not yet received your stimulus check from Uncle Sam - or if you have received but have not yet paid down your credit card balance with your stimulus check - hold the phone! Kroger wants to cut you a deal.

When news of the proposed economic stimulus package first broke some months ago, every armchair economist in the country fumbled over themselves in a rush to condemn or commend. There seemed to be very little middle ground. On paper, the idea of injecting cash back into the pockets of consumers seemed promising; central to nearly every point of criticism was the notion that things just do not behave the same in action as on paper. Debt-burdened, cash-strapped consumers, said the naysayers, would hoard this extra cash as an emergency buffer, or use it to pay down high-interest debt. In true capitalist fashion, some retailers are coming to the government's rescue, if only through their own self-service.

Kroger, my local grocery store, is now offering a gift card bonus program. Beginning May 2, significant cash incentives are being rewarded to customers who choose to turn their tax refunds or economic stimulus checks directly into Kroger gift cards. Other necessity-based retailers are tending to follow Kroger's lead, while more discretionary retailers - restaurants, apparel, etc. - are clinging to hopes that a consumer and his money are soon parted.

Why is this great?

Well, it gives the stimulus plan a shot at not being a complete failure. I can practically hear the whooshing sound of my sweet grandmother rushing to Kroger, check in hand, to convert to gift cards for my sister in order to help her feed my niece and nephew.

Is this doomed to fail?

Well, maybe not. But for discretionary retailers holding their breath for better business in the form of extra cash in consumers' pockets, they should prepare their contingencies. The fact is, the price of a gallon of gas has risen by nearly a dollar since the inception of the economic stimulus plan a few short months ago. This has created inflation-busting food and retail prices across the country. Most middle class consumers, by the time they receive their stimulus checks, will have already fed and fueled their financial holes deeper than any stimulus could ever begin to fill back in. The money is spent, and then some.