We are in the middle of Tax Refund season, and eBay released a report on how Americans plan to use their tax refunds.
First, there are few compelling data points:
- Nearly 6 in 10 (57 percent) Americans had already filed as early as February 26, and even high among Millennials (59 percent) – that’s nearly two months (50 days) before the deadline!
- Nearly half (48 percent) of respondents expressed excitement about filing taxes because they are getting money back.
- Nearly 8 in 10 (78 percent) plan to spend at least part of their tax refund this year, while less than a quarter (23 percent) plan to save it.
- Millennials are the most open to spending their refund on themselves: 71 percent are considering rewarding themselves after completing their return, that’s 4 percent higher than the general population.
In 2016, the IRS reported the average individual income tax refund was about $3,050. This number does not include refunds from business income taxes, estate and tax income tax, gift tax, and employment tax.
Tax refunds have long been a driver of economic stimulation in some higher priced product categories such as automotive parts, cars, electronics, travel, etc.
During recessionary years, most refunds are used up for living expenditures, but when the economy is in good shape with personal disposable continuing to rise, most people look at their tax refund as means to reward themselves.
Tax Season Opportunity
According to eBay’s Tax Refund Retail Study, 2018 (U.S. national survey, conducted by Pollfish in February 2018, with a sample of 1,000 adults (18-54+). Millennials defined as 18-34.) Americans have plans for their refunds:
- The top three things Americans plan to reward themselves with for filing include new electronics, a new wardrobe, and a night out at a restaurant or bar.
- One in five Americans (20%) plan to spend their entire refund on a tech purchase.
- For Millennials planning to spend their entire refund, more than a third (37%) will spend it on a new car.
To help people spend their tax refund money on the marketplace, eBay setup a landing page to highlight products in categories usually favored by people who receive refunds.
And through April 17, shoppers can take advantage of a wide selection of Daily Deals which will be featured on the eBay Tax Refund landing page as well.
Most sellers that typically benefit from this sales period probably already have their listings up and running.
But those sellers new to eCommerce or that never thought about the positive impact tax refund season may have on their business, still have time to cash in.
A few tweaks here and there or putting listings on eBay of higher priced items that some sellers may typically not consider selling on the marketplace could bring additional sales.
While eBay’s study shows how many Americans have filed their tax returns, it does take anywhere from 10 to 21 days on average to receive the refund. So this lag in time to receive the money effectively extends tax refund season all the way into mid-May.
The opportunity to attract sales during this time of year is not restricted to marketplaces such as eBay. eCommerce retailers with their own webstores can use banners, social media, email, and other marketing programs to attract shoppers that just received their tax refund.
One key factor to remember is to maintain a consistent marketing campaign during this time of year that exposes your brand or store on a daily basis.
Unlike the holiday season where everyone markets toward a few key dates, during tax refund season every business day is a day a large number of Americans will receive their refund checks. And many people that plan to use their refund will do so quickly.
Do you plan for tax refund season? We’d love to hear your thoughts on this topic. Head over to our Facebook Discussion Group or use the comments section below.