Top 4 Reasons to Offer a Tax Time Promotion

February 12, 2018

"The hardest thing in the world to understand is the income tax."

– Albert Einstein

But it’s not hard to understand why offering customers an incentive to spend their tax refunds is a good idea. American taxpayers have until April 17 to file their taxes, which leaves plenty of time to roll out incentives to help them spend their refunds.

We outline our picks for the top 4 reasons to offer customers a tax-related sales promotion. As a bonus, we end this article with a look at how consumers spend their refunds.

1:  Rife Refunds

Refunds are not only expected, but they are the norm. About 8 in 10 taxpayers receive a tax refund and 66% of Americans anticipated getting a tax refund in 2017.

The IRS projects 155 million individual tax returns will be filed in 2018. The IRS expected 153 million in 2017 and awarded 111 million refunds in 2016.

2:  More Money

The amount of cash refunded is growing. The average tax refund was $2,763 in 2017, which was $52 higher than in 2016.  In 2017, the IRS issued over $302 billion total in tax returns.

3:  Fast Filing

Two in three taxpayers hope to file their taxes by the end of February, 2018. If they file as planned, that means 66% of taxpayers will likely have their refunds in hand by March 21 since the IRS says it processes 9 out of 10 refunds in less than 21 days.

Here’s when taxpayers planned to file in 2017:

22% before February

37% February

59% total planned to file by the end of February

26% March

15% April

4:  Budge into Buying

Not everyone has a plan for their tax refunds. Almost half of those who expect a refund on their taxes in 2018 have yet to decide how to spend it. This is an increase in unplanned tax refunding—about 33% had no plan for spending their tax refund in 2017.

Bonus: Purchasing Plans

The priorities of those with refunds to burn falls into two categories: save or spend. Of those who have planned how to spend their refunds, more report spending than saving plans for 2018 compared to previous years.

2018 planned refund spending:

40% paying off debt (loans, medical bills, credit card and other debt)

27% plan to purchase something, use for an event or travel

22% put in the bank

11% save for a specific goal (house or car)

The top 5 planned refund spending purchases from 2013 to 2017 (ranked most popular to least):

savings

pay down debt

everyday expenses

vacation

major purchase (furniture, TV or car)

Service Tags: 
Print Solutions
Creative Solutions
Digital Solutions
Social Media Management
Marketing Strategy