This year, taxpayers have the option of receiving their tax refunds in cash at all Walmart stores, the retail giant said Tuesday, Jan. 20.
The Internal Revenue Service (IRS) reported that last year, 77 percent of the 109 million refunds issued were paid via direct deposit. Those who opted for paper check refunds numbered more than 25 million, according to IRS data. Walmart is targeting the latter, minority group of consumers, who may not have a bank and are paid with cash.
“We know tax refunds can be one of the largest financial payouts of the year for many of our customers,” Daniel Eckert, senior vice president of services for Walmart US, said in a statement.
Walmart has partnered with 25,000 tax-preparation locations nationwide. Taxpayers who file at the physical places will have the option to obtain their refunds at the retail store. Once these returns are processed, they will be released to banks that Walmart is partnering with: Tax Products Group or Republic Bank and Trust Company.
The new program excludes the millions of people who may file their taxes online
Cash refunds at the retailer will be available for amounts up to $7,500.
Eckert said that for the underbanked, fees for cashing checks can cost more than $70. At Walmart, taxpayers will not be charged for picking up their refunds. They may, however, be charged a fee of up to $7 by the tax preparers.
“Initially, this looks positive for people who are unbanked, because it keeps them from falling into the hands of these very expensive check-cashing locations,” said Bruce McClary, spokesperson for National Foundation for Credit Counseling, according to USA Today.
Walmart admitted Tuesday that the new option could tempt people to spend money at the store.
“It’s always a good thing, we believe, to have customers in our stores who have jingle in their purses and in their wallets,” Eckert said during a conference call, according to The Washington Post.
Last year, the average refund amounted to approximately $2,800.
“You’ve got a pocketful of cash, and you’re standing in a very large retail store,” McClary said, according to USA Today. “It’s really going to be a test of willpower for a lot of people who don’t have tight control on their spending habits.”
Walmart has began offering banking-related services in recent years. For instance, in October, thousands of locations began serving as branches for GoBank, allowing people to make deposits and even open up accounts with the mobile banking platform, the Post reported.
(With reports from The Washington Post and USA Today)
