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Cristina Spanò for Money

The average tax refund is $2,800. Financial planners implore Americans to save this annual windfall, or use it to pay down debt. Policy experts call it a lifeline for poor families.

H&R Block, on the other hand, wants you to spend it on

As Americans get ready do their taxes ahead of the April 15 deadline, the tax preparer that handles more than 20 million returns each year has a special offer for the do-it-yourself filers who use its software: Opt to get all or part (anywhere from $100 to $9,000) of your federal refund in the form of an Amazon gift card instead of cash, and you'll receive an additional 4% on the amount you're due.

In other words, H&R Block will turn that $2,800 into $2,912, as long as you agree to spend the money on...stuff. The problem is most Americans desperately need to build their savings--not to buy TVs or even pet food. And the offer seems like an unhelpful temptation, according to some critics.

"I suspect most folks who take this offer will find that they’ve blown a lot of the money on things they didn’t need and wouldn’t have bought otherwise," says Cincinnati-based financial planner Clare Fazackerley, adding she worries the bonus could "disrupt healthy financial choices."

Recent research suggests there is reason for concern. Tax refunds represent almost six weeks' take home pay for families that receive them, a 2019 study of checking account balances by JP Morgan found. At the same time, families spent 25% of the money within the first six days and three-fourths within six months.

Instead of shopping on Amazon, which "a lot of times it translates into impulse buying," consumers should think about moves that could genuinely improve their financial lives, says Burlingame, Calif.-financial planner Anna Sergunina. That could include adding to an emergency fund stashed in a savings or money-market account, paying off debt or saving for a long-term goal, such as retirement.

Asked whether the promotion could encourage taxpayers to misspend, an H&R spokeswoman responded via email: "We see clients who like to receive refunds use the money in a variety of ways — including investing and paying down debt — as well as the 4% Amazon bonus option."


But consider this: Even if you are absolutely determined to spend all or part of your refund check at Amazon—if there's $2,800 worth of stuff that you absolutely need—there are better ways to maximize your cash. The Amazon Prime Rewards Visa Signature credit card offers you 5% cash back on all Amazon and Whole Foods purchases (and 1% to 2% cash back elsewhere), if you are a member of Amazon Prime. It's an extra one percentage-point bonus, with no obligation to spend the money at Amazon like a gift card.

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