Tax season is approaching, have you given your collection partner permission to settle account balances for less than the total owed? You should – and here’s why. Analysis results have proven when people are given a financial boost, they are able to better manage their financial situation. We saw it with stimulus checks, those who didn’t need this money for basic expenses paid down debt or saved— and tax returns are no different. In fact, studies show that about a third of Americans dedicate their tax returns annually to relieve themselves of older debt. Our internal numbers also reflect this trend as we see a lift in recovery numbers this time of year.
Most Americans plan on filing their tax returns in February and March, as many as 78% of people surveyed in 2020 anticipated filing at this time for 2021. That means the time is NOW to develop a settlement strategy with your collection partner. Granting permission for a blanket discount, such as 20%, could prioritize resolution of the balance they hold with your organization over others. In addition to an increase in payment activity, we know offering settlements at the time people will be receiving their tax returns gets a better response than any other time of year…
We’ve recorded a 227% improvement in recovery when we sent settlement letters during Tax Season.*
Settlements provide consumers with a small break on their balance in exchange for payment in full and can be a great strategy for getting movement on dated accounts. Recently, we ran a settlement campaign for a client that yielded a 300% increase in settlements in full. Including settlement options as a part of your recovery strategy not only benefits your bottom line, it can be a blessing to consumers— offering them a fast solution to the outstanding debt that has been accruing interest and negatively impacting their credit.
Over 60% of Americans are anticipating a tax return this year, don’t miss your opportunity to resolve stagnant accounts and recover the revenue owed to you this tax season. Contact us today to learn more about the steps you need to take to implement this strategy.
*Based on a single client study, comparing recovery responses to traditional demand letters.