REDMOND, WASH. – Siras has a study showing how last year’s federal tax refunds helped CE sales, showing a clear correlation between the government’s sending of refund checks and consumers’ increased spending on CE goods.
The study in this exclusive TWICE report is based on weekly performance sales data from participating Siras’ retailers and shows that at its maximum effect, during the month of February, tax refunds may have helped in more than doubling weekly receipts.
“I think the biggest surprise in this analysis isn’t the potential impact on sales, but its timing,” said Peter Junger, Siras president.
“Last year, about $100 billion, or about 70 percent of all refunds mailed between Jan. 1 and June 30, were sent out between mid-January and the end of February. In looking at retail receipts for those weeks compared with typical, non-holiday shopping periods, sales were more than 40 percent higher overall, with some weeks exceeding a 100 percent increase.”
Junger added, “What this means is that retailers probably shouldn’t wait until April to promote purchases with tax refunds. Starting a few weeks after Christmas, as soon as the first refund checks go out in January, looks like the time to get started.”
According to Junger, methodology for the Siras analysis involved correlating sales data from retailers participating in Siras programs with tax refund data posted on the IRS website. The average weekly retail sales baseline was calculated by averaging the weekly sales for weeks ending May 6 through Sept. 23, 2011.
The sales increase reflects the increase over that weekly average.
Cumulative tax refund data for income year 2010 are found on the IRS website for weeks beginning Feb. 15, 2011. The missing weeks (Jan. 21, Feb. 18, April 15, May 27) were estimated by modeling the refunds as evenly distributed during the missing weeks.
Siras, based here, provides product registration, return validation and lifecycle-tracking services to major retailers and more than 50 CE manufacturers.