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    Tax Check Cashing Program a Success

    Wal-Mart has seen "an immediate and direct benefit to sales" in categories like consumer electronics.

    Convenience store and truck store operators that sell high-end merchandise take notice.

    Wal-Mart Stores Inc. said customers were starting to use tax rebate checks to buy such items as radios and DVD players, but added it was too early to tell how much the checks will boost sales.

    "We are beginning to see some people use them (tax rebate checks)," Tom Williams, a Wal-Mart spokesman, told Reuters. "There's an interest in air conditioners and electronics. In terms of a cumulative effect on sales, it's a little too early to tell."

    The U.S. government began mailing the checks last week. The checks are expected to total about $38 billion, and many retailers, such as Wal-Mart, Kmart and Target, have initiated promotions that allow consumers to cash, and spend, their rebates at stores.

    UBS Warburg retail analyst Linda Kristiansen said in a research note that Wal-Mart, the world's largest retailer, has seen "an immediate and direct benefit to sales" in categories like consumer electronics.

    Kristiansen also said that Wal-Mart's same-store sales, a key measure of performance, are reported to be up as much as 8 percent, above the 6 percent trend, because of the tax rebate. Wal-Mart has said it expects July same-store sales, or sales at stores open at least a year, to rise 3 to 5 percent. Wal-Mart, however, told Reuters it did not release sales figures to the analyst. Wal-Mart will issue its sales trends for the week on Monday.

    The chief executive of Kmart Corp., the number-two discount chain behind Wal-Mart, said it had no way to analyze the effect of tax rebate dollars on its sales thus far.

    "We continue to feel pleased with our sales like we did last month," said Chuck Conaway, Kmart's chief executive. "[Wal-Mart] must have an incredible tracking system that we don't have because I'm not sure how you would know that tax rebates were driving your business."

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