Survey says tax refunds going into savings, paying off debt

February 26, 2015

Who loves tax season more than the Internal Revenue Service? Retailers.

Empty-black-shopping-bagFlush with cash that Uncle Sam has been collecting from paychecks all year, Americans take their tax refunds and head out to stores.

Or maybe not.

The results of a new poll look like they might dampen the anticipation of many shop owners.

Holding on to hefty refunds: While the IRS says that the average check issued through Feb. 20 was $3,120, it looks like many refund recipients will be saving, not spending their tax cash.

The National Retail Federation's annual Tax Returns Survey, conducted by Prosper Insights and Analytics, finds that almost half (47 percent) of those expecting a federal tax refund plan to put the money into savings. That, says the NRF, is the highest percentage in the survey's history.

NRF 2015 tax refund survey chart Charts from the NRF Foundation's Retail Insight Center. To access this data and more research, visit the NRF's Retail Insight Center.

Breaking it down further, the survey found that 39.1 percent will pay down debt and 25.1 percent plan to use it for daily expenses.

"Americans are thinking of the future, and remaining financially secure is a big part of that," NRF President and CEO Matthew Shay said. "A check from Uncle Sam gives consumers the ability to pay down debt, add a cushion to their savings or splurge on a vacation or big-ticket item."

Still some splurging: As for those big-ticket purchases, there's a little hope for leisure retailers.

Thirteen percent say they will splurge on a vacation, 10.5 percent plan to spend on a major purchase like a television or car. Another 10 percent or so will use refund money to pay for dinner out, new clothes and spa or salon treatments.

The prized young adult demographic also offers a ray of consumer light for retailers.

More than 32 percent of younger taxpayers say they plan to spend their IRS refunds on everyday expenses. Another 15.4 percent plan to make a major purchase with the money they got back from Uncle Sam.

Have you received your tax refund yet? If so, did you spend or save it? If you're still waiting for the IRS to issue your refund, what will you do with the money as soon as it finally arrives?

And if you're still waiting for your money back from the IRS, check out today's Daily Tax Tip that details how to track down your refund.

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