Tax Refunds Are Back, and So Is the Consumer

Apr 3
3 min read

Tax Refunds Are Up 20%, And What Americans Are Doing With Them Will Surprise You

Taxes? Not so joyful. Tax refunds? That's a different story.

Two thirds of Americans are expecting a tax refund this year, and nearly 4 in 10 expect it to be larger than last year.

Expert data puts the average refund at around $3,500, up roughly 20% from 2024. That's a lot of extra jingle in the bank accounts over the next 45 to 60 days.

But here's the more interesting question: what are people actually planning to do with it?

Why 2024 As the Benchmark

To understand what's shifting, you need the right point of comparison. I chose April 2024. It was a specific moment in America: Biden and Trump were deep into their campaigns (before Harris stepped in), inflation was finally showing signs of cooling, a solar eclipse captured the country's attention, and college campuses were beginning to see pro-Palestinian protests. A mix of cautious joy blended with real tension.

That context matters because consumer sentiment then shapes spending behavior now. Here's what's changed and what hasn't.

What Stayed the Same: The Practical Mentality

Some tax refund spending priorities are stable, which itself is a signal.

Savings still tops the list at 34%. Despite a bigger check, Americans remain financially cautious. Everyday essentials hold steady at 20%, up just 1 point. And car and home repair sits at 12%, essentially flat. People are maintaining what they have before buying anything new.

The practical floor hasn't moved.

What's Declining: The Debt Paydown

Here's the surprise in the data.

Paying off credit cards and bills came in at 20%, down 3 points from 2024. On survey sample sizes like these, that's a material move. And it's counterintuitive. Consumer debt levels are rising, yet when Americans get an unexpected cash infusion, paying it down is becoming less of a priority, not more.

What's Growing: Experiences

Time and time again, the data signals a need for connection and joy. Tax refund spending is no exception.

The categories climbing fastest aren't practical; they're emotional.

Vacations +6 points to 15%
Clothing and shoes +5 points to 12%
Dining out +4 points to 10%

The percentages are smaller in absolute terms, yet the directional shift is significant. Consumers are using their refund checks to feel better, to reconnect, celebrate, and treat themselves. The craving for joy and social connection is showing up directly in spending intent.

So What? Now What?

I invite you to look beyond the daily headlines and the doom and gloom. There is a window, the next 45 to 60 days, to deliver something meaningful to your consumers.

Yet, don't mistake this moment for a structural shift because it's not. This is a one-time cash infusion that can benefit certain industries, but plan for the plateau on the other side.

What the data is telling us, especially compared to 2024, is a loosening of discretionary spending. Not everyone, but the shift is real. Restaurants, retail, vacations - all climbing. The signal is clear: a growing slice of Americans are craving joy and social connection."

Taxes? Not so joyful. Tax refunds? That's your moment.

Data source: Lisa W. Miller, Journey Back to Joy Research

Each Wave N=1,000 consumers, 18+ years old, data collected week ending March 20, 2026, compared to March 2024.

AUTHOR BIO

Lisa W. Miller is a consumer strategist and reinvention expert who helps organizations understand people, anticipate change, and act on what matters most. A Certified Speaking Professional and Certified Reinvention Practitioner, she blends deep consumer insight with practical tools that leaders can use right away.

With three decades of experience and nearly one million consumer conversations, Lisa brings both a corporate and consulting perspective. She built her early career in brand management and insights at Frito-Lay/PepsiCo and later led innovation for Brinker International. Today, she advises brands across restaurants, retail, fintech, hospitality, and healthcare through custom research and strategic guidance.

She also leads The Business of Joy, a platform that includes national sentiment tracking, thought leadership, and a weekly podcast on leadership, culture, and growth.

Lisa is a three-time EFFIE Award winner, a recipient of the David Ogilvy Research Award, and the author of The Business of Joy. Her research and commentary have been featured in The Wall Street Journal, NBC Nightly News, FOX, and more than 300 media interviews. Her core belief guides all her work: when joy is greater than fear, growth begins.

🎤 🎥 Watch the latest episode of my podcast, The Business of Joy: Why Leaders Miss Potential in Their Teams (with Kelli Valade)