Consumers with newly acquired tax refund checks might notice numerous offers and incentives to spend cash right away; Better Business Bureau says to save funds for further review.

According to the Internal Revenue Service, the average 2012 tax refund is roughly $3,000.

BBB warns refund recipients and big spenders to be wary of:

1.    Check-cashing businesses that offer special discounts for cashing refunds.

2.    “Bring in your tax refund” incentives for deposits or guaranteed credit approval.

3.    Conveniently-timed “buy now” advertisements on high-end merchandise, luxury items and other expensive services, such as: furniture; electronics; cars; clothing; jewelry; cosmetic services; and vacations.

 

“Advertised deals could be exaggerated or misleading. In worst case scenarios, buyers end up in financial hot-water with no recourse for voiding contracts or returning purchases they can’t afford,” says Robert W.G. Andrew, CEO of BBB serving Alaska, Oregon and Western Washington. “In other cases, tax refund checks are lower than anticipated, but consumers have already committed to certain deals or savings plans before knowing exactly how much money they’ll receive.”

 

After taxes, BBB offers eight smart spending and savings reminders:

• Budget. Wait until returns are received to evaluate how assets will be allocated.
• Spend wisely. Compare deals, review purchase policies and thoroughly research companies before buying. Start with bbb.org.
• Acknowledge asterisks in ads. Make sure to read contracts and fine print carefully. Get verbal promises in writing.
• Track accounts. Make sure deposited checks are applied to accounts. Use credit cards on more expensive merchandise; monitor account activity and contest unauthorized post-transactional charges.
• Dodge debts. Consider using refund cash to cover bills, loans or student expenses.
• Save for safety. Contemplate allocating a portion of the funds in a separate account for unexpected emergency costs.
• Protect purchases. During Financial Literacy Month and year-round, utilize free financial tips and anti-fraud resources at mymoney.gov, consumerfinance.gov, ftc.gov/moneymatters and saveandinvest.org.
• Capitalize on good credit. Seek free guidance from BBB’s Managing Credit – Made Simpler atbbb.org/credit-management or find articles at bbb.org.