Tax season is in full swing as the April 15 filing deadline draws nearer. With plenty of Americans expecting a tax refund in the coming weeks, businesses should be prepared for those consumers who plan to spend them.
The recent Capital One Bank Taxes and Savings Survey revealed 85 percent of Americans plan on receiving a refund and 35 percent will spend some or all of that money. The average federal tax refund this year will be $2,803 - a large amount for consumers looking to spend some extra cash.
How are Americans spending their refunds?
While some who receive a refund may put it into their savings account or plan for future expenses, there are many who want to spend this money on necessities or items they've been looking to purchase for some time. The survey revealed 65 percent of Americans don't consider their tax refunds as part of their annual budgets, making it easy to see why so many see them as a bonus and want to spend the money.
Thirty percent of those who will be spending their refunds plan to use it toward everyday expenses and necessities, while 23 percent are hoping to spend it on a vacation. Another 16 percent will spend the money on clothing, 15 percent hope to purchase electronics and 16 percent have other major purchases they'd like to make.
This information falls in line with a Dealnews survey that revealed of those who plan on spending this money, 30 percent will spend it on travel, 13 percent will have the money go toward clothing and 21 percent will put it toward home and garden expenses.
Coping with more customers spending cash
With many consumers planning to use their tax refunds toward purchases, companies could see an increased amount of business, making it important for them to prepare their cash management operations for the influx of sales.
Businesses should ensure their policies in regard to their cash drawers are updated and ready to handle a potential increase in cash purchases. This could also lead to a stronger need for a new currency and check processing machine that could improve operations and speed the process of preparing daily deposits. Such technology can also help companies easily determine what cash to keep in drawers or on-hand in the safe, and how much to deposit at their local banks.
March 13, 2013