WASHINGTON — Retailers hoping to see a boost in sales this tax season may be out of luck as more Americans this year plan to save their refunds.
The National Retail Federation's tax returns consumer survey, conducted by BIGinsight, found that 43.8% of those expecting refunds will save some of that money, up from 42.l% who said so last year and the most in the survey’s nine-year history. Two-thirds (66.2%) of tax payers are expecting a refund this year, the exact same as last year.
“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 NRF president and CEO Matthew Shay. “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.”
The majority of consumers who expect a refund (39.4%) said they will use some of the money to pay down debt and 28.7% plan to use their “free cash” for everyday expenses. A few will use their refund for a major purchase, such as a car or new television (12.3%) and vacation (11.3%).
No matter how they choose to spend their tax refunds, Americans want them sooner than ever. According to the survey, 64.4% of Americans will have filed their taxes by the end of February, the highest since 2006. An additional 21.3% will file in March and 14.3% will wait until the last minute and file in April.
Although the survey indicates that more Americans will save their money this year, it's easy to underestimate people's urge to spend after getting a big refund check from the government.