Study: Consumers unlikely to spend rebates

BASKING RIDGE, N.J. Although there was hope that U.S. consumers would boost the economy by spending their tax rebates, a new survey by Lightspeed Research reveals that more than 50% of U.S. consumers plan to use their proposed tax rebates primarily to pay down debt, rather than spend it.

Just 20% of consumers said they will spend the majority of any tax rebates they receive, according to the nationwide survey of 2,134 consumers conducted Jan. 29 to Jan. 31.

Of those who plan to use their rebates to pay down debt, 80% plan to pay down their credit card debt, while 7% intend to pay down their mortgage balances.

Even those consumers without economic troubles, according to the survey, are more likely to save the money than spend it.

Although the survey indicates that consumers won't be putting the money back into retail, retailers have been hopeful that the rebates will help spur economic growth

“This legislation is simple, targeted economic stimulus that will quickly put money into consumers’ pockets where it can boost economic growth by creating demand throughout all sectors of the economy,” NRF senior vp for government relations Steve Pfister said in a letter to members of the House. “Given the financial stress that consumers will be under in the coming year, stimulus legislation is essential to the health of our nation’s economy and to the jobs that rely upon the strength of that economy.”