TurboTax Tops Up Refunds with Gift Cards
TurboTax is giving taxpayers up to $1,200 more on their tax refunds— gift cards.
Intuit, Inc. lets TurboTax users choose among gift cards from 50-plus retailers, including Starbucks, Blockbuster, The Gap and Lowe’s, as well as American Express Incentive Service’s AmEx Shopping Card, accepted by 38 retailers.
The TurboTax Refund Bonus program lets taxpayers who are filing their returns electronically designate a certain amount of their refund to purchase a gift card, and the retailer adds another 10% to 100% to the value of the card. For example, a taxpayer diverts $90 of his refund to a Starbucks gift card; Starbucks adds $10, sending the taxpayer a $100 gift card, with no expiration date. Taxpayers are charged $14.95 for shipping and handling (including two-day FedEx delivery); gift cards arrive two to four weeks after the IRS has accepted the tax return.
Consumers can order up to 80 gift cards— spend up to $10,000 on them. The remainder of taxpayers’ refunds is deposited directly into his bank account by Santa Barbara Bank & Trust, a division of Pacific Capital Bank, N.A.
Intuit tested the refund bonus concept last summer.
“It was the most popular new feature we’ve ever done,” said Intuit spokesperson Scott Gulbransen. “We quickly got critical mass and brought retailers on board for this season.”
Intuit recruited retailers based on customers’ suggestions. “We weren’t looking for brands where people want to splurge money,” Gulbransen said. “We know that people generally use a third of their tax refunds to pay off debt, put a third in savings, and spend a third on everyday stuff.”
Retailers want the cards to boost traffic during a traditionally slow season; Intuit wants the value-added program to bring customers back next year.
Intuit handles TurboTax Refund Bonus in-house, even sorting and shipping the gift cards itself.
“We needed a machine to sort the cards, but there was nothing out there,” Gulbransen said. “So we bought a baseball card-sorting machine. A lot of people distribute gift cards, but no one has done this with such a wide mix of different merchants.”
Most participating retailers add 10%, selling $100 gift cards for $90 each. Five retailers add 15% (taxpayers buy a $100 gift card for $85, or a $200 AmEx Shopping Card for $180). Expedia.com adds 20% (a $300 gift card for $250), and FTD.com doubles the card value (a $100 gift card for $50).
Mountain View, CA-based Intuit has already seen TurboTax sales rise 6% this tax season, with 5.6 million units sold or returns filed as of Feb. 4. The biggest jump is for TurboTax Online, up a whopping 48% to 1.5 million for the season so far. (Sales of desktop software sold online fell 11% to 1.07 million; retail sales of desktop software fell 2% to just over 3 million.)
