Valassis researchers polled 1,000 US residents about their plans for tax refunds this year. About 15% say they'll spend their refund on home improvements, including furniture, while about 12% say they'll put part of their refund toward a vacation or event. Just over half (53%) say they'll try to save at leas a portion of their tax refund.
"Tax season presents a unique opportunity for marketers to motivate consumers with high purchase intent, or those who are unsure how they'll spend their refund and can be readily influenced," said Curtis Tingle, Chief Marketing Officer, Valassis. "Having extra cash on-hand can encourage consumers to spend more freely on experiences like dining out or high-consideration areas like home improvement projects. Retailers can capture a portion of this spend throughout tax season and beyond by placing relevant deals in front of consumers."
Other interesting findings from the Valassis report include:
▪ 40% of those saving part of their refund say it will go toward an emergency fund
▪ 19% of those saving part of their refund say some of the money could go to home improvements
▪ 15% say part of their refund savings could go toward a vacation
Some (20%) say they are undecided about what they'll do with their tax refund.
Whether saving or spending or undecided, though, tax refund time can be a boon to retailers. Valassis researchers note that most consumers (67%) are influenced to make a purchase because of a coupon or discount. So, retailers and brands wanting to engage consumers this time of year could use this strategy to engage shoppers.
Meanwhile, data from the National Retail Federation indicates consumers are already spending more over 2018. Their data shows a slight increase in spending (3.6%) YoY and just over a 1% increase over December sales numbers.
"American consumers regained confidence as concerns over the government shutdown and stock market volatility faded and trade talks moved in a positive direction. Although some hesitancy is still lingering, it is good to see consumer spending showing traction given the concerns on the minds of American families last month. We expect higher wages and low unemployment to continue to promote consumer confidence in the year ahead," said NRF Chief Economist Jack Kleinhenz.
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