TPG Blog

6
Sep

Proposed U.S. Post Office Closures Reinforce Value of Tax Refund Products

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As the U.S. Postal Service hits its $15 billion debt limit this month, the “radical changes” recommended by Postmaster General Patrick Donahoe to keep the agency afloat spells bad news for unbanked consumers.  The L.A. Times reports that lawmakers on both sides of the aisle are upset by the proposed closure of 3,700 post offices across the U.S.

Unfortunately, many of the closures appear to impact lower income and minority neighborhoods or according to Representative Gene Green (D-Texas).  Green says the pattern is not limited to his district, “Almost without exception, this pattern holds for our nation’s other great cities as well,” noted Green.  Senator Jerry Moran (R-Kansas) notes that post offices being considered for closure in his state will largely impact rural Americans despite the fact that rural post offices make up less than 1% of the budget.

With the Postal Service also considering 5-day delivery service, these changes reinforce the value provided by tax refund related bank products.  Many unbanked consumers receive their refund check in the mail. With fewer convenient post offices for rural residents and the possibility of less frequent mail delivery, the value of tax refund related bank products has increased.  According to an FDIC study nearly 8% of U.S. households are unbanked.  Studies show that consumers are often unbanked by choice because of inconvenient bank hours and locations, or a general distrust of financial institutions, and other consumers may be unbanked due to poor credit history or lack of income.

With these proposed changes, unbanked consumers using post office boxes in rural areas may see the value of receiving a Refund Transfer check at their local tax professional’s office in 1-2 weeks as opposed to a tax refund check in 2-3+ weeks from a distant post office location.  Unbanked consumers in lower income and minority neighborhoods that use post office boxes for security or count on Saturday service may find that receiving their refund amount securely from their tax professional’s office location in 1-2 weeks is worth the small fee.  Tax Refund Products including the Refund Transfer from TPG will continue to provide value to taxpayers nationwide and a level of security and convenience that consumers have come to expect.