I bought a phone for £499. During the week my trade-in refund of £267 was processed. (I didn’t get any notification of this - I just noticed later it was smuggled into the original transaction).
The Flex purchase was then changed from the previous 3 month repayments of a (roughly) equal amount (may → july) to a two month repayment (may & june) with the first two amounts combined into may (£167) plus a second (£65) in june. That’s not 3 months interest free repayment! I’d like to earn some interest on my puchase until july, thanks!
I notice that I can manually go in and correct it to three payments of ~£78.
Can anyone explain why Monzo’s default behaviour is as it is?
@TheoGibson I think is the most appropriate.
Without getting into detail I’m afraid there isn’t a great answer other than refunds are really complex.
We aim to keep your monthly payments the same where possible since this is what customers are expecting to pay.
That said i would’ve expected you to receive an notification - I’ll raise this internally and have a look.
Feel free to get into detail (I’m a developer)!
I’m not sure I understand the complexity. Not dealing with refunds per se but once it’s agreed that the refund happens you go from splitting £x over 3 months to splitting £x-y over 3 months. Surely it’s more complicated to split £x-y into 3, then combine two of them, then remove the last month’s payment? The fact that I can manually edit it back surely means it could have been computed that way in the first place, right? The simpler £(x-y)/3 calculation.
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Let me try from experience.
A “refund” is treated as a payment towards the transaction, as this is likely easier to work with. With Flex, any “extra payment” you make outside of your scheduled monthly payments (which includes partial refunds) is always added to the end of your agreement, reducing your term, not your monthly payments.
I’ve bought phones in the past and got them on 0% finance (I think one was with PayPal Credit, and the other via Klarna Financing). From what I remember, the partial refunds for trade-ins would also reduce the term with them rather than my payments, so maybe there is a legal requirement somewhere.
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Ah, that would make sense - the maths adds up.
Would still have been nice to have received a notification that this was happening so I could go in and manually change it. And it would be nice to have the manual recalculation back to 3 months happen automatically, as I said, to maximise the interest free repayment period. (It’s kind of odd that you can’t configure monzo to default to the maximum 3 month period and instead have to manually alter the payment of every single credit card purchase. Is there a reason for that other than “monzo makes more money this way”?).