Rebate Checks Being Used for School Purchases

About 20 percent of parents nationwide have set aside a portion of their stimulus check for back-to-school purchases, according to a National Retail Federation survey.

The average family with school-aged children will spend $594.24 on back-to-school purchases, compared to $563.49 last year. Total back-to-school spending for Kindergarten through 12th grade this year is estimated to reach $20.1 billion.

Electronics spending will continue to rise as many parents plan to spend some of their tax rebate check on household electronics like computers and cell phones, according to the NRF 2008 Back to School Consumer Intentions and Actions Survey, conducted by BIGresearch of 8,361 respondents. This year, parents will spend $151.61 on electronics purchases during the back-to-school timeframe, up from $129.24 last year. Spending on clothing ($234.51 vs. $231.80 last year), shoes ($109.75 vs. $108.42) and school supplies ($98.47 vs. $94.02 last year) will see more moderate increases.

“Strong promotions and must-have brands will help retailers stand out in the crowd as shoppers look for the best bang for their buck on back-to-school purchases this year,” said Tracy Mullin, NRF president and chief executive officer. “While cost will be the deciding factor, some families will use rebate checks to soften the blow, taking advantage of promotions and deals when they can.”

This year, more parents (46.4% vs. 45.2% in 2007) will begin shopping at least three weeks before school starts.

A large majority of consumers will head to discount stores (73%) for back to school purchases this year. Others will head to department stores (56.6%), clothing stores (47.8%), electronic stores (21.4%), office supply stores (41.8%) and drug stores (18.2%). As comparison shopping becomes more popular among consumers looking for the best deals and gas prices continue to rise, 24.8 percent of back-to-school shoppers will buy online, compared to 21.4 percent last year.

Back-to-college spending, which has helped buoy retail sales for the past five years, will drop seven percent this year, from an average of $641.56 per person last year to $599.38 this year, according to the survey. With total back-to-college spending expected to reach $31.26 billion, 2008 back-to-college and back-to-school spending combined will total $51.4 billion.

“College students are learning a hard lesson that when economic times are tough, fun purchases take a back seat,” Mullin said. “While students will still be buying school supplies, they will scale back spending on clothing, electronics, and dorm furnishings.”

While students will still allocate the largest portion of their budget to electronics, spending will fall to $211.89 per person from $258.43 last year. Spending on clothing ($134.40 vs. $149.85 last year) and dorm furnishings ($90.90 vs. $109.85 last year) will also drop, while spending on shoes will remain flat ($58.46 vs. $59.90 last year). Only one category—school supplies—will experience a notable increase, from $63.52 last year to $68.47 this year. Spending on collegiate gear, a new category, will average $35.26 per person.