Merchants await tax-time rush

Published 12:03 am Friday, February 11, 2011

Televisions, like these being demostrated by Wil Hart at Sears, are one of several items at the top of purchase lists made possible by tax refunds. | File photo

While local merchants of big-ticket items are seeing a steady increase in sales thanks to income tax refunds, many are hoping the best sales are yet to come.

In 2010, the Internal Revenue Service doled out $328 billion in refunds to taxpayers who filed their 2009 tax returns. That equated to $3,003 apiece, up 5 percent from the average refund of $2,859 taxpayers received in 2009, according the latest filing statistics from the IRS.

The jump was one of the biggest in years, thanks in part to several tax credits introduced as part of the American Recovery and Reinvestment Act.

This year, those tax credits, along with traditional tax credits such as the “Earned Income” credit, have taxpayers scoring large refunds.

And they can’t wait to spend it locally, area merchants say.

Big-ticket items such as automobiles, furniture and electronics top the list of tax-time purchases. Case in point – the showroom of Andalusia’s Powell Furniture which on Thursday was noticeably low on merchandise.

“We are definitely seeing an increase of sales here at tax time,” Eugene Powell said. “However, I don’t think that sales are as strong as they have been this time in the past.

“I’m not sure if that’s because of the economy or if people are holding on to their cash a little longer,” he said. “On the flip side, it also could be that we’re going to see a longer period where people are spending since the government started late this year processing refunds.”

Still, Powell said his biggest sellers in recent weeks have been upholstered items and bedroom furniture.

“The thing too is that the IRS is only depositing refunds on Fridays,” he said. “That makes a difference. In years past, from the second week in January to March, that was the season. This year, I think it will carry on into April – which means more business.”

Those at Jackson Used Cars said, “We look forward to this time of the year, every year.”

Cathy Brown, finance manager, and Brent Cook, used car salesman, said sales have been brisk for the dealership.

“Customers are looking for something that’s dependable and affordable,” Brown said. “Most of the time they want to use a good portion of their refund as a down payment, set their payments in a certain range, and then they come to us and say, ‘What can you put me in?’”

Cook said the sales rush started a week later than usual because of how the government is processing refunds.

“Now, we’re busy every day, and I expect it to pick up even more in the weeks to come,” he said.

Brown said sales have also increased in the area of four-wheelers and motorcycles.

“On one side, we have customers who are shopping out of necessity and need a new car or truck,” she said. “On the other hand, we have those who are out spending their refund on something that is strictly for pleasure – like a new four-wheeler.”

At least two local merchants – Sears and Cooperative Propane – said they’ve had a “a lot of shoppers, but no buyers.”

“For us, the increase comes at the end of February and the first of March,” said Richard Johns of Cooperative Propane. “I think people are using their refund to get themselves out of debt and using what’s left to buy the things they need.

“Us, we’ve had shoppers who come in – especially those looking for washers and dryers – who say they’ll be back as soon as they get their refund in,” he said.

The same can be said for Sears, said sales associate Renee Meeks, where customers are eyeing new flat screen televisions and appliances.

“It hasn’t hit us yet,” Meeks said of the sales increase. “We hope it’s coming. We’ve had a lot come in and say they’re waiting on their money, but they’ll be back.”