Under President Bush's economic stimulus act, signed earlier this year, rebate checks of up to $600 for individuals and $1,200 for married couples are being distributed as a way to prop up the faltering economy.

Whether the stimulus plan will work is anyone's guess. A flurry of recent surveys indicates that consumers intend to use much of the money to pay down debt or save it for an even rainier economic day.

Yet marketing experts agree that good intentions often fall by the wayside when a tax rebate or refund is in hand.

"Consumers say they intend to pay down debt, use the money for necessities and maybe save a little - that they will be the good consumer," said George Belch, chairman of the marketing department at San Diego State University. "But that doesn't mean they will act that way once they see reductions on flat-screen TVs or other items on their wish lists."

Retailers are betting that the good consumer will be bad, and several have launched marketing programs aimed at helping shoppers stretch their rebate dollars - or spend them in one big splurge.

The National Retail Federation predicts consumers will spend about $43 billion, or 40 percent, of their tax rebate, with the rest going toward savings or paying down debt and medical bills.

Even that 40 percent, if spent on consumer goods, would make the tax rebate the third-biggest retail event after Christmas and back-to-school spending, according to the Washington, D.C.-based retail trade group.

So far, history and Americans' spending habits are on the retailers' side. When the federal government sent out rebate checks during the last recession, in 2001, some studies found that consumers expressed an intention to save but instead spent the tax rebates of $300 to $600.

One analysis of credit-card accounts at the time found that shoppers initially saved some of the 2001 rebate by paying down credit-card debt, according to a study by the National Bureau of Economic Research. But credit-card spending climbed right back up soon afterward, with purchases rising most among consumers with the most debt.

This time around, retailers may capitalize on Americans' spendthrift ways by pitching gift-card or discount programs geared toward stretching dollars for necessities, some retail experts said.

This week, Kroger announced that it plans to give out bonus gift cards to people who turn in their stimulus checks at its stores. Sears and its Kmart subsidiary also said they will convert tax-rebate checks into gift cards, and tack on an additional 10 percent.

And Wal-Mart, the nation's largest retailer, also plans to cash tax-rebate checks at its stores and run promotions to encourage spending there.

"While most people say they plan to pay down debt, we know a portion of rebate checks may go to everyday items and special wants," Wal-Mart spokeswoman Ashley Hardie said. "We're listening to customers about their plans so that we can be ready to provide savings where it makes a difference on the items they need this summer - to make those additional dollars go further."

Marketing experts predict that some companies will take an "indulge yourself" approach to getting a piece of the rebate checks.

"The way consumers often view a tax refund is that it's like winning the lottery," said Priya Raghubir, a professor of marketing at the Haas School of Business at the University of California Berkeley. "And if you treat it like a windfall, you are much more likely to spend it."

Raghubir said young adults are more likely than other age groups to consider the tax rebate "play money," so companies such as Apple and Best Buy will offer promotions around iPhones, DVD players and other items.

The leisure industry is also expected to get a piece of the action, particularly since the rebate checks' arrival corresponds with the summer vacation season.

On April 1, Internet travel site Expedia announced that it will "stimulate the U.S. economic stimulus package" with an exclusive $200 coupon off special vacation packages.

The online travel-booking site also assembled dozens of vacation packages across the United States, priced to fit the size of rebate checks.

"We know people want to travel, but just don't think they can afford it, when in fact $600 provides a lot of vacation options - particularly in the U.S.," said Paul Brown, president of Expedia North America. "Adding our exclusive trip offers and instant coupon multiplies the possibilities Americans have for a tax-rebate getaway this spring."

While most experts agree that consumers will spend at least a portion of their rebate checks, many are dubious that it will achieve the goal of kick-starting the economy.

"The rebates are a political gift. I don't think they will do much for Wal-Mart or the economy," said George Whalin of Retail Management Consultants in Carlsbad, Calif. "We may see a burst for six weeks or so, but it won't be big enough to create a turnaround."

And, while Americans speedily spent their rebates in 2001, the mood is more somber today and they may be more cautious.

"Consumer confidence is at a five-year low; housing prices are down; prices for milk, eggs and other necessities are rising; and gas prices are killing everyone," Belch said. "So we have a little different set of circumstances than the last time we saw rebate checks come out.

"Ultimately, the consumer will decide what they want to do and how much they are willing to go out there and spend this money. The rebates will get people spending on some things, putting money back into the economy, but this is not a panacea."

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