Delayed Tax Refunds Threaten to Impact TV Sales

Television and food-related sales usually climb surrounding the Super Bowl, since early tax refunds from the IRS have historically buoyed these sales by fueling impulse purchases of TVs. This year, however, the IRS is delaying releasing billions of refunds to comply with a new law designed to crack down on tax fraud, meaning consumers will have less cash on hand to make their football season purchases.

As a response, retailers and electronics manufactures are altering their seasonal marketing campaigns. Wal-Mart and hhgregg are delaying their refund-related marketing ads until closer to when refunds will be released. For 2016, U.S. TV sales reached $395 million in the week before the Super Bowl and $353 million the week after, representing the biggest sales period for appliances outside of Black Friday. Without the synchronization of the big game and early refunds, sales are expected to drop since early taxpayers won’t expect to receive their returns until February 27th.

Sales for the larger, higher tech screens will not experience as large of an impact, since purchases in this category are more likely to not come from tax refunds as opposed to smaller, older models. Wal-Mart could be the biggest loser from this change, as it receives a greater benefit from lower- and middle-income shoppers’ refunds. Additionally, 30 percent of U.S. TV sales occur in Wal-Mart stores during the weeks surrounding the Super Bowl, as opposed to 20% percent of sales during normal periods.

 

For more, visit the Wall Street Journal

Photo credit: Photographer, Stock Photo, License Summary.

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