Sixty-six percent of U.S. consumers expect to receive a tax refund this year, according to a consumer survey sponsored by the International Council of Shopping Centers. These consumers were then asked how they plan to use their refunds. Of the possible options, spending this money on goods and services, including apparel, electronics and convenience items was selected by 47% of consumers.
In addition, ICSC found that spending tax refunds specifically on apparel and footwear was selected by 5% of Americans who have or will receive a return, while another 13% are planning to spend it on home improvements, home goods, furniture or a large appliance and an additional 4% plan to buy electronics. In addition to goods and products, 11% of consumers expect their refunds to go towards restaurants and eating out or entertainment such as movies, plays and concerts.
“As the economy continues to strengthen and consumer sentiment remains positive, this influx of disposable income is a boon for retailers and shopping centers. Just as lower gas prices have positively impacted consumer spending, so too will tax refunds bolster our economy,” said Jesse Tron, spokesman for ICSC.
Spending isn’t the only thing on Americans' minds this tax season. According to the survey, 20% of consumers will save or invest their tax refunds, and 17% expect to use their refund to pay down debt or loans. While men and women have similar spending intentions for their refunds, men are expected to save and invest more than women, with 30% of men indicating they will tuck their refunds away for another day, compared to 24% of women.
Of course, how Americans allocate their refunded tax dollars is dependent on demographics as well. Generally, younger Americans are most inclined to spend their tax refunds as opposed to saving, investing or paying down loans. They also anticipate spending proportionally more than their older counterparts across all spending categories. Fifty-one percent of Americans between the ages of 18 and 34 who received a refund indicated they would spend their extra money as compared to 43% of Americans aged 35 and above. Interestingly, all income segments were equally as likely to spend their refund, as opposed to saving it.
[Image courtesy of gettyimages.com/Kirby Hamilton]