Walmart Hopes To Increase Traffic By Offering Cash Tax Refunds

By Christine Kern, contributing writer

Service allows customers to get tax refunds in-store in cash

In yet another move designed to increase traffic in stores and appeal to the “unbanked,” Walmart has announced that it will be offering a service that allows customers to get cash tax refunds in-store.

In October, Walmart and Green Dot Corp unveiled the national rollout of GoBank, a checking account product available exclusively at Walmart, as Integrated Solutions for Retailers reported.  It is an FDIC-insured checking account with low fees for qualified direct deposits and a linked MasterCard, and it was aimed at the “unbanked,” or “underbanked” segment of the customer segment. 

The retailer has been on a push to provide financial services to its core low-income shoppers, many of whom are outside of the traditional banking system. Last year, Wal-Mart started a U.S. money-transfer service. It also offers check-cashing and bill-paying services, among others.

Now, Walmart is expanding its attention to the “underbanked with their new offering.  The new tax refund service allows customers to “skip the check” and pick up their tax refunds in cash (up to $7500) via the Walmart Direct2Cash program.  A press release stated that the service is now available nationwide, “and will help customers save time and money when compared to traditional tax refund options.” 

A 2011 survey by the Federal Deposit Insurance Corp discovered that 8.2 percent of U.S. households are “unbanked” while an additional 20.1 percent are “underbanked,” Fortune reported.

Walmart is working with Tax Products Group (TPG), a Greed Dot Company, and Republic Bank & Trust Company, member FDIC, in the program.  Both companies are leading providers of tax-related financial products and services.

There are over 25,000 tax preparation locations using software with the Walmart Direct2Cash option, and they can provide the service from anywhere from $0 to $7 at the time of filing.  Walmart does not charge a fee when refunds are claimed in a store. “Walmart Direct2Cash is a secure, one-stop cash pickup transaction that reduces the potential for a variety of check-related problems,” states the release.

“We know tax refunds can be one of the largest financial payouts of the year for many of our customers, and the last thing they want is to wait for their refund check to arrive and then spend money on unnecessary fees – in many cases upwards of $70 – to cash it,” explained Daniel Eckert, senior vice president of services for Walmart U.S.  “by skipping the check and choosing this new service, customers will not only save time, but also keep some extra cash in their pockets – two things Americans can always use more of.”

And, of course, those customers will also be inside of a Walmart store when they score the extra cash – something that Walmart officials are hoping will encourage some extra shopping. The Wall Street Journal reported that Daniel Eckert, senior vice president of services for Wal-Mart U.S., told reporters on a conference call that “It’s always a good thing for us to have customers in our stores that have jingle in their purses and their wallets.”  

The service works like this:  when customers choose Walmart Direct2Cash, they will receive a confirmation code for their federal and/or state tax return through an email from TPG or Republic Bank as soon as their refund is ready to be picked up. Customers will then go to the Walmart MoneyCenter or customer service desk at their local Walmart store, show their confirmation code, confirm their identity, and then receive their refund in cash.