H&R Block Tax Services Case-Study
Frank M. Burns

Management & Strategy 5650
Gregory Coon, Ph.D.
Spring 1 2011
Webster University
Abstract

H&R Block’s Tax Services segment provides income tax return preparation, electronic filing and other services and products related to income tax return preparation. Clients are offered a number of options for receiving their income tax refund, including a check directly from the IRS, an electronic deposit directly to their bank account, a prepaid debit card, a refund anticipation loan (RAL) or a refund anticipation check (RAC). Major revenue sources include; fees earned for tax preparation services performed at company-owned retail tax offices, royalties from franchise retail tax
H&R Block is being forced to scramble harder this tax season to compete with other filing services, mainly due to the OCC ruling to eliminate RALs by H&R Block’s lender. Another management strategy by H&R Block this year was offering free tax services during the first month of tax return filing, which runs from January 15th through February 15th. Why would H&R Block offer this? One goal is to increase foot traffic at H&R Block offices. 'Free' can be a very powerful word. Until their clients arrive for their appointment, many of these new customers might not realize they actually need more complex tax forms, and thus will wind up paying for them. Even those customers who can use a 1040EZ most will have to pay H&R Block extra to file any state income tax returns. Another goal is to attract younger taxpayers, those who can still use the 1040EZ and win their loyalty in future years. Of those usually filing a 1040EZ 55 percent will need to file a more complex form within two to three years. Some would consider this false or deceptive advertizing because the service is limited to those tax filers that can use the 1040EZ forms. However as with most advertizing you must always read the fine print.
More than one-third of H&R Block clients have no banking services, and must pay high check-cashing fees for their paychecks, as well as tax refund checks. Although H&R Block will not be able to use RALs,