Walmart to enable tax refunds to be collected at its stores

Walmart is tempting consumers with a novel deal to get their tax refund money on the spot at its stores instead of chasing refund cheques, Detroit Free Press reported.

According to commentators the tax-time gimmick called Walmart Direct2Cash could prove popular with tax payers who did not have bank accounts and paid hefty fees to cash tax refund cheques.

Walmart would obviously stand to gain if customers could be enticed to spend a part of their tax refund cash on the spot when they picked up their money at one of their stores.

The idea, however, would seem risky to people who did not like walking around with a lot of cash, but many consumers who did not have bank accounts would prefer cash in their hands.

The first-of-its-kind service would work on lines similar to the tax refund process that used direct deposit.

The direct-cash option would be offered when consumers got their taxes done at select tax preparation sites.

The fee would vary depending on the tax preparer but could range from being a free option to one that cost an extra $7.

The Walmart Direct2Cash option was expected to be available at 25,000 tax preparer locations, including at some Wal-Mart stores that had tax preparation services. Wal-Mart spokeswoman Molly Blakeman said preparers would include some Liberty Tax Service, Packson Hewitt and other independent tax preparers.

Sterne Agee analyst Thomas McCrohan told journal.com the service would appeal most to customers without a bank account who would otherwise pay a higher fee to convert a tax-refund check into cash.

Wal-Mart launched a money transfer service in April, taking on Western Union Co and MoneyGram, in a bid to broaden the financial services it offered to low-income customers.

Meanwhile, Forbes reported Daniel Eckert, senior vice president of services for Walmart US as saying that customers would not only save time, but also keep some extra cash in their pockets – two things Americans could always use more of.

However, timing was everything and when refund cheques were slowed in 2013, Walmart had a ''terrible'' February, the report noted.

Bill Simon, Walmart US president and chief executive officer, said at the time, February sales started slower than planned, largely due to the delay in income tax refunds.

He added, the retailer started seeing increased tax refund cheque activity late last week in its stores, resulting in a more normalised weekly sales pattern for this time of the year.