“March comes in like a lion, goes out like a lamb.” – Thomas Fuller, 1732
The predictable dip in retail sales following the holiday season and fourth quarter of 2016 has hit retailers hard, but the promise of springtime and the extra cash floating around most consumers’ wallets – thanks, IRS! – mean that the end of March and month of April are set up to be the saving grace of retailers everywhere.
The IRS has already cut more than $100 billion in tax refund checks so far this year, and more will go out before the April 15 filing deadline.
The average American’s tax refund check is $3,200. That’s a full $200 higher than the amount collected by early filers at the end of 2016 (this is one time procrastination may benefit rather than punish you). But what do American consumers plan on doing with this influx of cash? Spend it – wisely, of course.
“Most consumers say they are going to be responsible with the windfall by using the cash to catch up on bills, pay down debt, and pad their nest eggs. Indeed, 52% of consumers surveyed by Edward Jones in January and February said they would use their refunds to pay their credit cards, loans, and household bills.” – Jonnelle Marte of MarketWatch
“The majority of early filers are living paycheck to paycheck. They’re just going to spend it on anything that comes up.” – Lisa Greene-Lewis, CPA at TurboTax
Retailers can capitalize on the March sales boom by advertising in a way that appeals to those who’ve just received their tax refund check or deposit. See the image on the right that depicts tax refund cards and the words “Got one of these?” in a bid to entice new refundees to spend their return at a local car lot.
March sales may start off slowly, but it will almost certainly culminate in a nice little springtime sales boost thanks to Uncle Sam and some curious consumers. So while March weather may go in like a lion and out like a lamb, one could say the March sales cycle reads just the opposite: In like a lamb, out like a lion!