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Published: Tuesday, 2/27/2007

Chains offer games, other lures

H&R Block and Jackson Hewitt, Nos. 1 and 2 nationally, have side-by-side offices on Lagrange Street in Toledo. H&R Block and Jackson Hewitt, Nos. 1 and 2 nationally, have side-by-side offices on Lagrange Street in Toledo.

Scratch-off tickets and sweepstakes drawings are among incentives being offered by tax-return preparation services in the Toledo area and nationwide to lure an estimated 8 million filers who hire professionals to complete their returns.

"It's not a big driver of business," said Larry Ward, a district manager for H&R Block in North Toledo and surrounding suburbs. "It's more of a conversation piece with customers - a relationship-builder."

Scratch-off tickets, with prizes ranging from a fast-food sandwich to $10,000, weren't introduced because of falling sales locally but as part of a national promotion, Mr. Ward said.

Sales at the firm's 33 metro Toledo offices, which will complete more than 30,000 returns, are about even with last year's, he said.

Like other tax-prepara-

tion services, the firm boosts revenues by making loans to customers against income tax refunds.

About 60 percent of people who file tax returns pay professionals to do so, according to industry figures.

H&R relies heavily on return business. But it also gets its share of newcomers. "There are people who will come in because of a life change," Mr. Ward said. "They have a kid. They buy a house. Now they have a tax situation that they don't know how to handle."

At Rocket Tax Service, on South Byrne Road in Toledo, the average person pays about $125 for help with a tax return. People with uncomplicated returns pay as little as $50.

Those fees are typical in the area, said Russ Hawkins, owner.

To compete with major players like H&R Block and Jackson Hewitt Tax Service Inc., the Toledo firm and a group of other small, independent services around the country have banded together to offer customers a chance at $10,000. The prize was put up by a bank used by the tax services to finance instant loans against tax refunds.

So-called refund anticipation loans generate significant revenues "but still aren't the majority of our business," Mr. Hawkins said.

Although the firm's name is from the nickname of the University of Toledo's sports teams, parents handle tax returns for most students, he said. But he said the firm has prevented UT enrollees from making potentially costly errors.

The most common mistake on student returns, he said, occurs when a student takes a personal deductions without realizing that he or she already has been claimed on parents' returns.

At Jackson Hewitt, the nation's second-largest tax preparation service, lower-income households make up the bulk of business.

Households with incomes of $35,000 or less represent 56 percent of tax filers nationwide, but 77 percent of customers at Jackson Hewitt fit that category, according to securities filings by the firm. Filers nationally making at least $50,000 account for about a third of taxpayers overall, but just 12 percent of the firm's business.

Spokesmen for the New Jersey firm didn't respond over several days to a request for comment on marketing strategies.

Contact Gary T. Pakulski at:


or 419-724-6082.

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