Refund spending not a big economy driver this year


PeopleWhen the economy is going good, the arrival of a nice fat tax return check can mean a trip to the store for a luxury item, a nice dinner out or an investment in a vacation. But for the most part in 2012, it’s being directed toward normal household spending categories.

The spending analysis comes from the Ipsos RetailMeNot Shoppers Trend Report. “The Ipsos Survey shows that many Americans need the money they are getting back to pay their bills,” said Kristen Remeza, editor-in-chief of the RetailMeNot online magazine The Insider. “A high percentage of people are using their refunds to pay for everyday necessities, like food or gas, or choosing to pay down debt, while only 10% plan to spend their refund on items or experience-based purchases they would not normally buy or do not need, such as dinner out, travel or the purchase of luxury items.”

Here are some key percentages:
* 67% of Americans expect a refund
* 27% expect a refund in excess of $1,000
* 15% expect to owe money
* 35% will sock at least part of their refund into savings
* 30% are using it for everyday necessities (food, gas, utilities, etc.)
* 29% will pay down debt
* 10% will use the money for various indulgences
* 9% were unsure how they’d use the money

RBR-TVBR observation: The latest consumer confidence reports we’ve seen have had mixed results, and this study shows that even if optimism is creeping up, it hasn’t gotten to the point where consumers are even close to abandoning the careful fiscally-prudent habits they’ve developed since Lehman Brothers went down in flames.