Refund Transfers: A Missed Opportunity
It's safe to say that most tax professionals prefer to get paid upfront, and when they do, it's a missed opportunity. Sounds a bit cynical to say it like that, but here's why.
Since most tax pros prefer to get paid upfront, they inevitably structure their business around it. In other words, all of their marketing efforts, processes, and strategies revolve around that main goal. And if thats the case, then they limit themselves to only people who are willing to pay prep fees upfront.
For instance, all of your marketing and messaging will consist of things like, "Get Your Taxes Done Here For A Low Price" or "Get Your Taxes Done Here and Enter A Raffle For A 50 inch TV". Essentially, you pigeon hole yourself into one specific audience...only those that can pay you upfront.
When it comes to getting paid, the refund transfer route takes a bit longer, but still has the same result. This way, tax pros allow taxpayers to file their taxes without paying upfront, and open their services to more people.
Unbanked and Underbanked
As you consider refund transfers, you should pay attention to unbanked and underbanked trends. Unbanked means the household had no one with a checking or savings account. While underbanked means the household had at least 1 checking or savings account, and used services like pay day loans in the past 12 months.
Why is this significant to refund transfers?
Because it allows taxpayers who don't have a bank account to e-file and conveniently access their tax refund via direct deposit. This, in turn, lets them pay for housing, living expenses, and debt in a timely manner.
This Map Represents Unbanked Rates By State
Highest - TX, NM, AL, MS, GA, LA, NY
This Map Represents Underbanked Rates by State
Highest - TX, OK, GA, AL, MS, LA
Having a visual of these trends and stats help you make important decisions about your tax office. These people are ideal clients for refund transfers, so why not create advertisements and messaging that caters to them?
When deciding on refund transfers, consider how location creates opportunity and how its helps identify a potential untapped market for your tax business. You could be missing out on a lot of business, especially if you live in states that have high unbanked and underbanked rates.