Is There Still A Consumer Cash Bump From Tax Refunds?

Consumers expecting the biggest refunds tend to file as soon as possible and receive their refunds at the end of February into March For more than half of Americans this cash windfall goes into savings or paying down debt Expanded Child Tax Credit and Federal Stimulus payments ended last year so consumers may feel more inclined to squirrel their latest check awayConsumers say they are less likely to splurge this yearA recent survey from the NRF showed 10 of consumers claimed they spent their return on a major purchase last year while 9 of people spent it on a quotsplurgequot purchase When asked what they plan to spend their refund on this year both purchase categories declined slightly The one discretionary category consumers are planning on spending more on is travel with 11 of consumers stating they will spend their refund check on a vacation in 2022Tax refunds are bigger this year to date The IRS reports it has already issued almost 38 million refunds at an average of 3401 each Comparing yearoveryear from March 4 5b data that39s a 137 increase in the size of refund at this time Increased child and education tax benefits along with recovery rebate and earned income credit expansion means parents and younger Americans are seeing larger refunds hit their accountsThe everyday is getting more expensiveWith inflation at a 40year high consumers will need that cash Gasoline prices were up 38 annually as of the end of February driven 66 higher from the previous month partly due to the Ukraine crisis Prices for a gallon of gas have surpassed 4 per gallon for the first time since 2008 When gas prices go up consumers drive less but some car travel is essential to people39s everyday lives and the increased costs eat into their spending powerThe NRF estimates that 29 of Americans spent their refund last year on everyday expenses Everyday expenses might use up more of that windfall now that the everyday is getting more expensive It39s more likely this year that tax refund cash will go straight to the pump instead of new products or servicesDon39t count on a spike in spendingMarketers who saw a bump last March may have to adjust their expectations accordingly Certain pockets of population are seeing their discretionary budgets shrink while others have changed their relationship with cash and savings Unless you manage a travel brand tax refunds may not affect your forecasts this yearThis article was written by Corinne Casagrande Senior Vice President Strategy Broadbeam Media and was originally published at Mediapost on March 28 2022Click the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillagecomMyersBizNet

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Is There Still A Consumer Cash Bump From Tax Refunds?

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Is There Still A Consumer Cash Bump From Tax Refunds?

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