Rebate Checks: No Economic Stimulus

ROCHESTER, N.Y. – September 10, 2008 – 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.

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

• 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.

• 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.

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.

"The U.S. Congress and President Bush recently signed into law the Economic Stimulus Act of 2008 which provided direct payments to qualifying individuals and households. Please indicate the extent to which you agree or disagree with the following statement – Spending my tax rebate helped stimulate the economy."

Base: All Adults

Note: Percentages may not add up exactly to 100% due to rounding.

Note: In April, the question was worded "The U.S. Congress and President Bush recently signed into law the Economic Stimulus Act of 2008 which may provide direct payments to qualifying individuals and households. Please indicate the extent to which you agree or disagree with the following statement – Spending my tax rebate will help stimulate the economy."

"About how much do you anticipate you will receive from this program?"

Base: All Adults

Note: Percentages may not add up exactly to 100% due to rounding.

Note: In April, the question was worded, "About how much do you anticipate you will receive from this program?"

"You said you received [$300, $600, $900, $1,200, $1,500, $1,500+], how much money (in dollars) did you use for the following?"

Base: Received payment

Note: Percentages may not add up exactly to 100% due to rounding.

Note: Dollar amount was recalculated as a percentage of overall spend

Note: * indicates less than 0.5% and "-" indicates no response

"You said you received [$300, $600, $900, $1,200, $1,500, $1,500+], how much money (in dollars) did you use for the following?"

Base: Received payment

Note: Percentages may not add up exactly to 100% due to rounding.

Note: Dollar amount was recalculated as a percentage of overall spend

Note: In April, question was worded, "Assuming that you receive a payment for [$300, $600, $900, $1,200, $1,500, $1,500+], how much money (in dollars) do you think you will use for the following?"

This Harris Poll^® was conducted online within the United States between August 11 and 17, 2008, among 2,710 adults (aged 18 and over). Figures for age, sex, race, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online.

All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Interactive avoids the words "margin of error" as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100% response rates. These are only theoretical because no published polls come close to this ideal.

Respondents for this survey were selected from among those who have agreed to participate in Harris Interactive surveys. The data have been weighted to reflect the composition of the adult population. Because the sample is based on those who agreed to participate in the Harris Interactive panel, no estimates of theoretical sampling error can be calculated.

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