Help customers save refunds by default
If we're more likely to spend refunds, banks like Monzo can turn a potential impulse purchase into a savings boost!
If recent research shows that we're more likely to spend money refunded to us, such short term behaviour may get in the way of our bigger, longer term goals, like saving for a house.
How can banks mitigate this?
Let's take a look at how we can use Defaults to boost savings, building on existing features present in the app of Monzo, a UK bank.
Monzo's existing use of Defaults for saving
Monzo has an excellent feature in the app that, every time you spend money, rounds it up to the nearest £ and puts that money into savings by default.
You can even supercharge the amount saved by 2x, up to 10x.
Monzo says that customers who've turned Roundups on have savings amounts 5x higher than those who haven't.
How Monzo should use the Refund Effect
Such a simple feature could be naturally extended to refunds.
Refunded transactions could join roundups in peoples' savings pots, distinguished with a unique icon.
A faster path to savings goals?
Given the average basket and item value for online shopping, refunds will likely have a higher average transaction value than most roundups. So, though less frequent, they'd make a much bigger savings contribution per transaction.
Because of this, Monzo customers could reach their savings goals much faster if they also used the 'Save refunds' feature.
Help customers save refunds by default
If we're more likely to spend refunds, banks like Monzo can turn a potential impulse purchase into a savings boost!
If recent research shows that we're more likely to spend money refunded to us, such short term behaviour may get in the way of our bigger, longer term goals, like saving for a house.
How can banks mitigate this?
Let's take a look at how we can use Defaults to boost savings, building on existing features present in the app of Monzo, a UK bank.
Monzo's existing use of Defaults for saving
Monzo has an excellent feature in the app that, every time you spend money, rounds it up to the nearest £ and puts that money into savings by default.
You can even supercharge the amount saved by 2x, up to 10x.
Monzo says that customers who've turned Roundups on have savings amounts 5x higher than those who haven't.
How Monzo should use the Refund Effect
Such a simple feature could be naturally extended to refunds.
Refunded transactions could join roundups in peoples' savings pots, distinguished with a unique icon.
A faster path to savings goals?
Given the average basket and item value for online shopping, refunds will likely have a higher average transaction value than most roundups. So, though less frequent, they'd make a much bigger savings contribution per transaction.
Because of this, Monzo customers could reach their savings goals much faster if they also used the 'Save refunds' feature.
Help customers save refunds by default
If we're more likely to spend refunds, banks like Monzo can turn a potential impulse purchase into a savings boost!
If recent research shows that we're more likely to spend money refunded to us, such short term behaviour may get in the way of our bigger, longer term goals, like saving for a house.
How can banks mitigate this?
Let's take a look at how we can use Defaults to boost savings, building on existing features present in the app of Monzo, a UK bank.
Monzo's existing use of Defaults for saving
Monzo has an excellent feature in the app that, every time you spend money, rounds it up to the nearest £ and puts that money into savings by default.
You can even supercharge the amount saved by 2x, up to 10x.
Monzo says that customers who've turned Roundups on have savings amounts 5x higher than those who haven't.
How Monzo should use the Refund Effect
Such a simple feature could be naturally extended to refunds.
Refunded transactions could join roundups in peoples' savings pots, distinguished with a unique icon.
A faster path to savings goals?
Given the average basket and item value for online shopping, refunds will likely have a higher average transaction value than most roundups. So, though less frequent, they'd make a much bigger savings contribution per transaction.
Because of this, Monzo customers could reach their savings goals much faster if they also used the 'Save refunds' feature.
