Retailers: The Time To Get Customers To Spend Their Tax Refund Is Now

If you're a retailer who wants to create a promotion designed to entice customers to spend their tax refund windfall at your store, don't wait until tax day. A lot of retailers think about doing tax sales around the April 15 tax day. And, sure that's a good excuse to have a sale, especially if you're going to offer something like "no sales tax." But if you want to catch customers while they're in their tax refund spending frame of mind – now is the time to do it.

Research shows that people who know they are getting a tax refund file in February. And many of them are eFiling to get their money quicker. It's the ones that have to pay or aren't getting much back that tend to drag their feet until the last minute in April.

Also, whether they have their tax refund in hand or not, once they know it's coming and how much it is, they're already thinking about how they're gong to spend it. You want to hit them with your messaging when they're already pre-disposed to spending.

This is especially true for bigger ticket items that can be put off until a customer has extra money on hand. You want to create good values or offer special deals that allow you to say things like "now is the time to buy, because your tax refund goes further during our blah-blah sale." You don't have to build the whole sale around the tax refund; just offer good value and mention the refund. This gets the consumer to think about, "oh yeah, I've been wanting one of those – with my refund and those deals, I could actually get one now."

Game Stop is already running ads that talk about "Re-fun your Refund" – getting their demo to spend on new games. Many of our furniture clients are talking about stretching your refund and this being a perfect time to get that new living room or mattress you've wanted. Same would work for TVs and appliances. For cars, you could position it as you now have your down payment and we're going to give you special financing or an extra month payment free or some other deal to entice the refund customer.

So, whatever you're selling, don't wait until April to go after the tax refund customer. Chances are, he or she has already spent it by then.

Michael Morin, taxing my brain for good ideas.