4 Ways to Optimize Your Ecommerce Business for Tax-Refund Spenders

Tax season is a great opportunity for ecommerce retailers to optimize their online stores for tax-refund shoppers. And since a recent IPX report found that almost half of taxpayers will file in March, April, or later, it’s not too late to ensure you have effective tax refund marketing strategies in place. If you’re looking for last-minute ideas to implement, we put together some of our top tips.

Understanding Current Tax-Refund Spending Behavior

As of March 22, 2024, almost 80.5 million taxpayers had submitted their returns, with an average refund of $3,081. That’s a nice chunk of extra change for many people.

But what are their plans for that money? To effectively target tax-refund spenders, we need to understand their seasonal spending habits. Fortunately, a recent Bankrate survey has some valuable insights.

According to the survey, most people are not prioritizing “fun” ways to spend their refunds this year. This data highlights the struggles many Americans are going through post-pandemic as prices for everyday items like groceries have surged.

Still, we can’t ignore that over 30% of Americans plan to use their tax refund for everyday purchases, home improvements, travel, or retail splurges. Let’s break down some ways retailers can use this information to guide their marketing strategies and product offerings.

Tax Season Best Practices for Ecommerce Retailers

1. Tailor Promotions to Online Shopping Trends

One effective strategy for retailers is to create targeted marketing campaigns that resonate with tax refund shoppers. To recap, here’s a breakdown of this year’s anticipated retail spend categories:

  • 11% plan to spend it on day-to-day expenses.
  • 9% plan to make home improvements.
  • 7% plan to take a vacation.
  • 4% plan to splurge on retail purchases such as clothes or electronics.

The above numbers indicate what products may be good contenders for tax refund promotion ideas. Stocking up on these products ahead of time will also ensure your inventory has an ample supply of high-demand items. Here are some tax season marketing ideas to build upon:

  • Discounts or subscription-based offers on essential items like groceries, household supplies, or personal care products.
  • Promotions or Tax Day coupon codes for other trending spend categories, such as DIY home project kits or a travel essentials bundle.
  • Targeted special offers based on past purchases or customer interests.
  • Rewards or bonus point promotions that encourage customers to plan for future purchases.

2. Website Optimization

There are several ways to ensure your website is optimized for tax season spending. Here are some key strategies to maximize your chances of attracting and converting tax refund shoppers:

  • Dedicated product pages: During tax season, shoppers often look for deals and discounts. Consider creating dedicated landing pages showcasing specially curated collections or limited-time offers. Each product page can then be optimized using relevant tax season keywords, including page titles, URLs, product descriptions, and meta tags.
  • Customer reviews and testimonials: Incorporating user-generated content like reviews and testimonials into your product pages can help establish credibility and trust with customers. A recent survey found that 77% of shoppers purposely seek out websites with ratings and reviews, and 98% say reviews are essential to their purchasing decisions.
  • Streamlined navigation and search: One of the first priorities is ensuring your website’s navigation is intuitive and user-friendly. As we know, tax refund shoppers may have specific products or categories in mind. A clear menu structure and robust search functionality can help them quickly find what they want. Don’t forget to add useful filters and sorting options to make the process even more seamless.
  • Page speed: Having a fast website matters. Google’s research found that bounce rate probability increases by 32% as page load time goes from 1 to 3 seconds. Similarly, Unbounce found that 70% of customers say page speed impacts their willingness to buy. Compression, caching, and ensuring your media is optimized for mobile can all help improve page speed.

3. Enhanced Customer Service

Many retailers anticipate increased traffic during tax refund season, meaning your customer service needs to ramp up accordingly. Based on our January 2024 study of 900 online shoppers, customers value the following:

To ensure top-notch customer service, it’s best to provide customers with multiple support channels — live chat, email, phone, etc. — and train staff to handle issues efficiently. It may also be a good idea to offer extended customer service hours during peak shopping periods. As we learned from our survey, prompt and helpful responses can enhance customer satisfaction and loyalty.

In terms of what channels to focus on, we found the following customer service touchpoints to be the most likely to convert:

4. Offer Flexible Payment Options

Flexible point-of-sale financing or “buy now, pay later” (BNPL) options can be an effective strategy to attract refund spenders. Breaking down the total cost into smaller, more manageable payments can give shoppers greater financial flexibility while giving retailers some valuable advantages, too:

  • Enhanced purchasing power: Installment plans help customers manage their finances more effectively. Shoppers may have more money to spend during tax season, but the prospect of BNPL may seem more appealing. This can especially be true for “splurge” items, as it allows customers to treat themselves while keeping the bulk of their tax refund money to spend on necessities.
  • Increased conversion rates: The sticker shock of large purchases can be a significant barrier to conversion rates, but flex payment plans can help mitigate this issue. One survey found that 76% of consumers are more likely to make a retail purchase when offered a seamless point-of-sale payment plan. Offering split-payment options could mean the difference between making a sale and a shopper abandoning their cart.
  • Stand out from the competition: Providing payment flexibility can set you apart from other retailers who do not offer such options. Convenient BNPL plans can attract customers specifically looking for the financial ease of flexible payments, capturing a market segment that might otherwise have been inaccessible.

Final Thoughts

Ecommerce retailers should prepare for tax refund season by understanding what customers want and striving to improve their shopping experience. Once you’ve narrowed down customers’ spending behavior, you can adjust promotions and payment options accordingly. However, don’t let other best practices, such as site optimization and customer service capabilities, fall by the wayside. Focusing on all these factors can give you an edge during tax refund season.

Are you aiming to enhance your customer experience strategy by collecting valuable feedback from shoppers? Discover how with Bizrate Insights by scheduling your demo today. Or you can get started on your own by creating an account.