Taxpayers Split on Refunds

Retail group says 25% of consumers will use their refund checks to splurge.

by staff writer
- Feb 24, 2011

While a fair number Americans will opt to put this year's tax refunds away in their savings accounts, about a quarter of those who get a check from Uncle Sam will use the money to treat themselves.

About 41.9 percent of U.S. consumers who receive a tax refund this year will use the money to lessen their debt. The rest will opt to spend the money on big-ticket items like new TVs or furniture (13.2 percent) and vacations (11.9 percent), or simply to cover everyday expenses (29.7 percent), the National Retail Federation reports.

This could mean a boost in sales for retailers in the coming months as 66.2 percent of Americans are expected to file their taxes by the end of February—meaning they'll soon have their refunds in their hands. But retailers could benefit right up to April and beyond, with 21 percent of Americans expected to file taxes in March and 15 percent expected to wait until April, according to the NRF.

"Many Americans have spent the last few years paying down debt with their tax refunds, but for some, it's the perfect time to buy something nice for a change," says Phil Rist, executive vice president of Strategic Initiatives at BIGresearch. "Others are looking to the future, though, by putting their 'free money' in a savings account, with the recession serving as a perfect reminder of the need to be prepared."

And it appears that some consumers are still cautious about the economic climate as the number of people who will put their refund money into savings is up by 2 percent compared to last year, the NRF adds.

Still, "Americans receiving a tax refund this year seem eager to plough this money back into the economy," adds Matthew Shay, NRF's president and CEO.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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