NRF SAYS MILLENNIALS WILL SAVE THEIR TAX REFUNDS INSTEAD OF SPLURGING ON RETAIL

Retailers have depended on American’s using their IRS tax refund checks to boost February and March sales. However, according to a survey conducted by the National Retail Federation (NRF), more than half of those expecting a refund are planning to save their money instead of spend it. This is the highest level since the NRF has begun conducting the survey.

Millennials, ages 18 to 24, show 57.3% planning to save and 27.4% planning to spend their refunds on everyday purchases like gas or groceries. In the 25 to 34 year old bracket, 52.3% plan to save and 45% plan to repay debt.

In addition to saving, 22.4% of Americans will save their refunds while 11.4% will plan a vacation. “Consumers are building their spending power and boosting their confidence as they set aside their checks from Uncle Sam,” NRF president and CEO Matthew Shay said. “Americans this year see refund season as a time to improve their financial health by using their refunds to get ahead on savings goals and plan for bigger purchases in the future. Money saved is money waiting to be spent.”

As refund checks start to get into Amercan’s hands, it will remain to be seen if this holds true for future retail spending and whether they will actually save the money or decide to shop instead.

Source: Chain Store Age

Tax Refunds, Retail Deals and Spending Trends

The National Retail Federation conducted a Tax Return Survey to determine where refund money will be spent by consumers. Two-thirds of the shoppers surveyed were expecting a refund. 47% of shoppers will put their refund into savings, 39.1% will pay down debt and 25.1% will use their refund for daily expenses.

Among consumers surveyed between the ages of 18 to 24, 54.9% plan to put their refund into savings and 34.4% will pay down debt. “Americans are thinking of the future, and remaining financially secure is a big part of that,” said NRF president and CEO Matthew Shay.

However, a survey conducted by the International Council of Shopping Centers found that 47% of consumers would spend their refunds on goods and services including apparel, electronics and convenience items.

Retailers are vying for tax refund dollars with specials and marketing campaigns. Banana Republic is conducting email marketing that states “the antidote to taxes is a click away” and Amazon is urging customers to “take a break from filing taxes and scoop up new spring footwear”. Other online retailers, such as Foot Locker, Babies R Us, Bon Ton, The Gap and Ann Taylor are offering deals on Tax Day with percentage-off specials.

Sources: Forbes, International Business Times, Huffington Post