Retail Notebook: Retailers hope to cash in on refunds

Although the income tax filing deadline isn't until April 15, the Internal Revenue Service has already refunded more than $111 billion to taxpayers. And some retailers are chasing that extra cash with increased advertising, special sales and even offers to cash tax refund checks in stores.

Everett Chevrolet will pay tax preparation fees at H&R Block for consumers who receive a rapid refund and use it as a down payment on a car. General sales manager Tim Fuller hasn't had any takers yet this year, but more people have come into the dealership during the last two weeks and mentioned that they were waiting for their refunds to arrive.

"This time of year we always talk about the tax refund," he said. "Some people have it, some people don't. But it's silly not to ask. ... You have to work every angle"

Auburn Subaru is spending more on advertising this month to entice shoppers. The dealership's March sales are typically 10 percent higher than those in February, sales manager Mike Rose said.

"March is always a good month in the car business and a great deal has to do with tax returns," he said.

More than 20 percent of consumers plan to spend their refunds on a major purchase or travel, according to a survey released earlier this week by the National Retail Federation. An additional 27 percent said they would use their refunds to pay for everyday expenses. Most consumers -- 49.2 percent -- said they planned to pay down debt.

The average refund so far this year is $2,151, an increase of $101 from last year, according to the IRS. The total amount in refunds given out so far -- $111.7 billion as of March 12 -- is 10.1 percent higher than the same time last year, although it is less than what analysts had expected.

The refunds are expected to benefit retail sales. For some retailers it can boost business between the holidays and summer, while for others it's just enough to keep sales steady during a slow time of year.

In recent years, some retailers have begun cashing refund checks in the store -- and hoping that consumers spend them there.

Wal-Mart, for instance, cashes refund checks up to $1,000 for a $3 service fee. The company said on Monday that it saw an increase in the number of tax refunds cashed at its stores during the first week of the month.

At Don Willis Furniture, consumers last month picked up some pricey merchandise.

"We've definitely had a few more bigger purchases in the $3,000 range," said Corey Shea, manager of the Ballard store. He estimated about 20 percent of the company's business from February to April is generated by refunds.

The business, which also operates a store in Seattle's Lake City neighborhood, holds a "tax relief" sale around April 15 (this year it will run from the 15th through the 18th), during which it pays the sales tax on all purchases.

Not everyone is trying to cash in on the refunds, though.

With local unemployment rates still high, retailers at Everett Mall aren't encouraging consumers to come in and spend their checks, said general manager Linda Johannes. Instead, the mall is focusing on more traditional marketing holidays and community events such as Easter and the 10th anniversary of Naval Station Everett.

"I'm proud to say it's a greater level of sensitivity to our customers," she said. "The last several years we've kind of gone back to the basics."

More headlines and info from Auburn, Ballard/Broadview/Blue Ridge, Bothell, Everett.

This report includes information from Bloomberg News. Retail Notebook is a Saturday feature by P-I retail reporter Christine Frey. She can be reached at 206-448-8142 or christinefrey@seattlepi.com

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