Walmart recently announced a service that allows consumers who use certain participating tax preparers to pick up their refunds at a Walmart store. The program already has one high-profile detractor in the form of Connecticut Commissioner of Revenue Services Kevin Sullivan who says he believes the program is intended to get consumers to spend their refunds at Walmart.

In a statement yesterday, Sullivan described the Direct2Cash program as “just a way to lure taxpayers into spending at Walmart the minute they get their hard-earned refunds.”

He has called on his staff to look at how the nation’s largest retailer is implementing the service in Connecticut. He may also seek the assistance of the state’s Attorney General as well as the Department of Banking and Department of Consumer Protection in investigating the service.

In addition to the fee paid to tax-preparation partners — like the 3,000 or so Jackson Hewitt preparers that will be in Walmart stores offering $50 Walmart gift cards for customers who e-file — there is a $7 fee for getting your refund through Direct2Cash.

The refunds themselves end up going to a Walmart banking partner, but Walmart will remit the refund to Direct2Cash users when they show up at the store with their redemption code.

If the code isn’t redeemed within a given period of time — as little as two weeks in some cases — the customer must return to the tax preparer and arrange another way to get their refund.

The requirement of going to a Walmart store for your refund appears to concern Sullivan the most.

“It’s welcome to Wal-Mart and good-bye refund,” he explains. “While pretending to help otherwise bankless taxpayers, Walmart is really just helping itself to turn tax refunds into immediate store sales.”

Walmart has not yet responded to our request for comment on Commissioner Sullivan’s statements.

The $7 fee for getting a refund in cash is likely less expensive than taking it to a check-cashing store. However, the requirement that customers use a participating tax preparer may be a legitimate cause for concern.

As we’ve warned readers repeatedly, only a few states have any sort of regulation or certification requirements for paid tax-prepares, meaning you may be paying for advice that you don’t need and which may be inaccurate or wholly incorrect.

Meanwhile there are services, like the IRS’s VITA program, which provides free tax-prep assistance for people earning $53,000 or less, and the agency’s Tax Counseling for the Elderly (TCE) program assists those 60 years of age or older. Or the AARP’s free Tax Aide program to low/moderate-income individuals, with a focus on those 60 years of age and older.

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