By  on March 3, 2010

Taxpayers receiving refunds will focus on using the money to pay down debt or save, a National Retail Federation survey disclosed Tuesday.

There will be a slight increase in those who plan to use the cash to make major purchases.

But the public’s spending mood is likely to remain restrained after the government checks are spent, said Phil Rist, executive vice president of strategic initiatives at BIGresearch, which polled 8,560 consumers, Feb. 2 to 9, for NRF’s 2010 Tax Returns Consumer Intentions and Actions report.

“We’re not back at the impulse buying stage yet,” Rist said. “People will still be approaching spending with practicality. That practicality is going to be with us for a while.”

Among those polled about their tax refunds, 40 percent will save them; 29 percent will devote them to everyday expenses, and 44 percent will pay down debt. Last year, 48 percent looked to pay down debt with their refunds. In addition, 12.5 percent will treat themselves to a major purchase, up from 11 percent last year. Some people may plan multiple uses for the found money, like paying down debt and saving a part of it.

Tax refunds aside, one in five Americans are cutting their personal budgets this year — aiming to reduce spending by an average of 17 percent, according to a new forecast from Brand Keys.

“It’s a new zone of spending, where people feel they have to have some money to put aside,” Robert Passikoff, president of Brand Keys, said of the consultant’s annual survey of 1,000 people ages 18 to 65, taken Jan. 5 to 29. “People aren’t ready to go back to their more profligate ways, to go back to a lot of credit card usage.” They are still discovering “there are things they can do without.”

Despite concerns about employment and tight credit that are prompting consumers to keep a firm grip on their wallets, Passikoff said shoppers’ search for quality may create an opening for some high-end apparel brands. “People are looking for value for their dollar more than the price” of goods per se, he said.

Tactics that could spur near-term spending on apparel, among other things, based on the 2010 Brand Keys Customer Loyalty Engagement survey, include: focusing on more functional items; marketing products made to last rather than things created as disposable, and offering smaller products and smaller portions that lend themselves to lower prices.

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