Tax Time: The Retail Opportunity
It’s that time of year again when Americans all over the country sit down by themselves or with the assistance of a professional to see if they’ve got a tax refund coming their way. It’s become an annual rite for retailers — vying to grab a greater share of those checks from Uncle Sam. But according to the National Retail Federation, merchants may find it a tough go this year as more consumers plan to save rather than spend their refunds.
According to a survey conducted by BIGinsight for NRF, roughly two-thirds of taxpayers expect to get a refund this year. That’s the same number as last year. Of those, 43.8 percent plan to put some of their refund into savings. That percentage is the highest NRF has seen in the nine years it has been doing this particular survey.
Other findings include:
- Just over 30 percent will use some of the money to pay down debt;
- Nearly 29 percent will use refunds to pay for everyday expenses.
“After a rocky few years, consumers are now more vigilant about how they spend their money and the importance of preparing for future financial stability,” said Matthew Shay, president and CEO of NRF, in a statement. “Increased consumer savings proves extremely beneficial to shoppers and businesses in the long run, allowing future opportunities to invest in a large household item or even take advantage of a well-deserved family vacation.”
According to NRF, 12.3 percent of tax refund recipients plan to purchase a new television while 11.3 percent will use the money toward a vacation.
Consumers are looking to file early this year with nearly 65 percent planning to do so before the end of February. That’s the highest percentage since 2006. Only 14.3 percent plan to wait until the filing deadline in April.
“For some, tax season is a way to reward themselves, for others it is the perfect opportunity to get ahead on their bills or other expenses,” said Pam Goodfellow, consumer insights director, BIGinsight. “Whatever the decision, many consumers this year are looking forward to taking back some of their hard-earned money from Uncle Sam.”
- More Americans Serious About Saving Tax Returns This Year, According to NRF Survey – National Retail Federation
Discussion Questions: What are the most effective ways for retailers to grab share of tax refunds this year? Are there any merchants that you think have done a particularly good job of this in past years?