Minnesota goes from paper to plastic with tax refunds on debit cards

Stateline Midwest ~ March 2013

Starting next year, Minnesota will begin issuing individual income-tax refunds via debit cards instead of paper checks. While most refunds are deposited directly into checking accounts, the state has still been printing 1 million paper checks each year, according to the Minneapolis Star Tribune.
Money on the new debit cards can be spent at stores or withdrawn at banks.
State officials say the transition to plastic will save about $400,000, reduce check fraud, and deliver refunds to taxpayers a month earlier (paper checks have had to pass through three state agencies). The change in state policy is also expected to help individuals who don’t use banks and, as a result, have had to incur check-cashing fees.
Minnesota is the first state in the Midwest to move from paper to plastic, according to the Federation of Tax Administrators. Georgia was the first state to issue debit cards, in 2011, and five other states followed suit last year. The FTA reports that states have seen savings when issuing banks take on the cost of printing and mailing the cards.
Critics point out, however, that debit cards can include fees. And some people, such as the elderly, are not accustomed to the technology.