As credit and collection managers, risk management leaders and finance professionals prepare for the 2018 tax filing season, U.S. consumers will begin to contemplate individual tax return spending options. The National Retail Federation (NRF) 2017 Annual Tax Returns Survey found that of the 66 percent of consumers who expect a tax refund, 35.5 percent plan to use the funds for paying down debt. By employing the services of a top debt collection agency, businesses can encourage consumers to use part of those refunds to pay off debt and increase debt collection ROI by 20 – 30 percent during tax season.
Tax Filing Season Statistics
In 2017, the IRS received 135.6 million returns with taxpayers collectively obtaining $268.296 billion in refunds averaging $2,763 per consumer. For the 2018 tax filing season — January 29 to April 17 — the IRS expects nearly 155 million individual tax returns to be filed.
In addition to resolving debt, consumer plans for 2017 tax returns include depositing the funds into savings accounts (48.8 percent); paying everyday expenses (20.9 percent); vacation and travel (10.7 percent); major purchases such as automobiles and furniture ( 8.7 percent); frivolous spending on dining out, apparel, etc. (7.6 percent); and other uses (4 percent).
Tax Season Strategy Advantages
Many consumers become more receptive to collections upon receiving tax returns, presenting a crucial window of opportunity for businesses with delinquent consumer accounts. Establishments that launch a solid tax season strategy prior to tax filing season and run the campaign through May can significantly increase collection results. A best-in-class debt collection agency possesses the industry expertise and resources to ensure a successful season.
Due to the complexity and scope of managing collections year-round, in-house efforts leave businesses vulnerable to compliance issues involving violations of state and federal debt collection laws, negative media attention, data breaches, a tarnished brand image, disgruntled consumers and loss of customers. Opting for external collections mitigates these risks.
Businesses are advised to select an agency operating with the following techniques and credentials:
- Consumer and economic trend monitoring
- An effective consumer outreach program
- An adaptive management and collector team prepared for increased call volumes
- ACA certified Credit and Collection Compliance Officers and legal team
- A strong commitment to compliance and routine training
- Advanced data security systems and technology
- A thorough disaster recovery plan
- Brand protection
- A transparent partnership with clients
Steps to Successful Collections
As a leader in the debt collection industry, Optio Solutions is dedicated to delivering consistent and measurable results to clients. Optio operates legally and professionally with advanced technologies, an effective approach to consumer data protection and a team of certified collectors, upper management and legal team. In addition, our agency follows a consumer-centric approach to maintain high levels of consumer satisfaction and customer retention rates.
Organizations interested in maximizing collection results during tax filing season and beyond are invited to contact us today to learn how our first-party and third-party collections strategies and tax season strategies expertly assist businesses.