Most of the 13 million taxpayers who get a return this year, averaging at $3,600, are putting the money into savings or paying off debt.
The findings by global accountants H&R Block have alarmed retailers who want them to spend the money as the sector worries about shaky consumer confidence.
Australian Retailers Association executive director Russell Zimmerman said the sector wants money to come in during the tax return period.
"Certainly there are hopes people will spend their refunds as consumer confidence remains a concern for retailers," he said.
"We're seeing around 4.6 per cent year-on-year growth in the retail sector, which is good, but we'd like to see that increase to over six per cent.
"The retail sector employs around 10 per cent of the Australian working population and we need to see it supported."
H&R Block spokesman Mark Chapman said given uncertainty around the economy, it was not surprising only around 10 per cent of taxpayers would spend their refund on things like holidays, electronics, cars, gifts and new outfits.
"Australians will be using their 2015 refunds to pay off their debts, especially as credit card interest rates still average close to 20 per cent," he said.
Mr Zimmerman said taxpayers using their refunds for debt repayments was not entirely bad as it would allow opportunities to spend in the future.
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