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Tax Rebate Would Be More Effective as a Bonus

Tax Rebate Mind Games

When I came across an article in yesterday's New York Times I swore I was having deja vu — until I realized I had a rebate chat with Citizen about the exact same concept last week! The research reported in the Times aligns exactly with our conversation and perhaps affects why some of us intend on sticking our (potential) rebate checks in the bank.

The research argues that to really increase consumer spending, the rebate checks should have been called "tax bonuses" instead. Even though it's coming from the same source, people are more likely to spend a bonus and save a rebate. A study was done where half of the participants were given $50 and told it was a bonus while the other half were told it was a rebate.

When unexpectedly contacted one week later, participants who got the rebate reported spending less than half of those who received the bonus. Do you think this study carries any weight with your own psychology?


Join The Conversation
JennaV JennaV 9 years
I wish they would shit or get off the pot....either give us the money or don't. Stop dangling it in front of us.
Mintie Mintie 9 years
I totally agree [and have been bitching about this ever since they came up with this recent "bonus" plan]. Instead of telling us they want us to "spend the money to stimulate the economy and avoid a recession", they should have just said "Here's some free money." Now, everyone is all worried that we are going to slip into a recession [more like tumble], so no one is going to spend it. I don't know a single person who plans on spending it. One last brainiac move from a brainiac administration.
JessicaBlair JessicaBlair 9 years
So true! I hadn't thought of it before, but "bonus" sounds like money I've never had, while "rebate" sounds like money I'm getting back. You raise a very valid point. And yes, I was planning on banking mine as well!
CupcakeGal10 CupcakeGal10 9 years
I read this! And I think this editorial is absolutely accurate- as I learned in social psychology class in college, the smallest details can create a huge change in behavior!!
buffyanne buffyanne 9 years
Makes no difference to me what they call it, my behavior is the same: save it.
LaLaLaurie06 LaLaLaurie06 9 years
as long as i get it, i don't care what they call it
gigill gigill 9 years
I think it's misleading if you call it a "bonus" since it's money that you're getting back, not extra money that appeared out of nowhere.
SkinnyMarie SkinnyMarie 9 years
I feel that way too. I am just going to stick it in the bank and let it collect money.
gooniette gooniette 9 years
I really don't see how spending borrowed money, no matter what you call it, is going to help our economy. The government is borrowing money from other countries to give to the people so we can spend it on vacations and going out to eat. This 'stimulous' money is just going to decrease the value of our already falling dollar on the world market.
taraevans94 taraevans94 9 years
I can see how those words may make some people feel differently about how they choose to handle the money inflow, but I really don't care if it's called a "rebate", a "bonus", or "official shoe-buying money", I'm still going to put it in the bank and use it for bills.
Le-Luxe Le-Luxe 9 years
I feel the same way ilanac- If you feel that your getting money back for money you have already shelled out, your more likely to keep it. If they call it a 'bonus' then people will think its more like 'found money' and wont care as much to spend it. But then again, money is money and either way, I would probably save mine.
ilanac13 ilanac13 9 years
i feel that for myself when i get a rebate - it's money back from something that i spent earlier - whereas a bonus is 'extra'. i think that people tend to spend 'extra' money more than getting back what they had already spent. i don't know - i have too many bills to pay off that anything the govt wants to give me will be a big help.
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