Do you think of your tax refund as a nice spring bonus or money the government owes you? Your answer likely influences the way you’ll spend the funds in question, according to new research from the Georgetown Institute for Consumer Research at the McDonough School of Business. The 2015 Tax Refund Consumer Spending Survey, sponsored by KPMG, was conducted during the last two weeks of March to examine consumer spending around Tax Day.
“Apparently all dollars are not created equal in the minds of consumers,” Kurt Carlson, director of the Georgetown Institute for Consumer Research, said in a statement. Indeed, 53 percent of consumers who think of their refund in terms of a bonus plan to spend it on something in the near term, the survey found. Furthermore, they are more likely to spend it at stores where they rarely shop throughout the year.
In contrast, those with the “getting back my own money” mindset hold their purse strings more tightly. “Consumers who see their refund as money owed them by the government believe their refund belongs where it can do good in the long run – in an investment, savings account, or as a means of debt reduction,” Carlson said. Those in this camp who do spend the refund are more likely than the “bonus” folks to spend it at stores where they shop on a regular basis, the survey found.
The survey also found that those expecting larger refunds probably filed earlier than those who are still busy finishing up those returns at the eleventh hour. Likewise, more of the early filers plan to spend their refund. Of those who filed in January, 56 percent reported plans to spend their refund, compared to just 24 percent of those filing by Tax Day.
Now, what will marketers in the retail world make of these findings?