Egg Money Oddity

miller

I pay off my Egg Money in full every month, but had a look today and the payment collected was £25 less than the full amount.

I scratched my head and finally worked out that at the train station I bought a railcard for £25 but the bloke made a mistake and I had that transaction refunded for £25.

That £25 refund explains why the amount was less than expected.

This got me thinking, someone in an interest paying situation could get out of it by buying an expensive item and having it refunded.

YorkshireBoy

The £25 refund probably hit the account after the statement was produced, but before the 3/4/5 day close off point for the direct debit collection.

But you've got me puzzled on this though...

someone in an interest paying situation could get out of it by buying an expensive item and having it refunded

How?

lisyloo

Yes I don't think there is any loophole to take advantage of here.
This refund has saved you paying the £25.
It's not put you in a better situation, so there would be nothing to be gained by it.

Caroline73_2

Surely the OP is £50 better off?

They bought something for £25, but instead of being charged the £25 they were refunded.

lisyloo

Yes, sorry in this case he benefitted becasue someone made a mistake.

I may have mis-interpreted his post, but I thought he was suggesting reproducing it and I don't think you could reproduce that scenario to your own benefit.

NickX

Caroline73 wrote: »

Surely the OP is £50 better off?

They bought something for £25, but instead of being charged the £25 they were refunded.

I don't think this is the case.

The OP purchased a railcard for £25 but the transaction failed. This meant that they were debited £25 and then refunded £25.

Presumably they then went ahead with the transaction again and paid another £25 for the railcard.

It is simply that the £25 refund had an effect on the Direct Debit taken.

hax_2

Beware that some card companies have a policy of marking a refund as a credit, not as a payment. Vanquis for example know this trick and mark it as a credit, so the minimum payment is unaffected.

brummierebel

Nickx is correct because this situation happened to me a while back.

Say I owed £100 from my expenditure last month (and have received the statement).

I buy a £25 ticket which needs to be refunded.
So £25 goes onto the account and £25 is credited.
Another £25 is put onto the account for the new ticket.

The statement looks something like this

Last month's statement £100
Ticket (failed) £ 25
Ticket (refund) -£ 25
New Ticket £ 25

The £25 credit is taken as a payment and only £75 is taken as the direct debit, leaving £50 to go onto next months statement. In effect, one has deferred a payment of £25 interest free.

lisyloo

Yes, you can get a months free interest.
I recently spent £50 on expenses.
The debit goes onto my November statement, but the credit will come off my October statement, so it's a months free credit.
The benefit is relatively small though. Let's suppose I get 3% before tax then that's 12.5p for a month before tx.
Would work out better on bigger sums for business exepnses but quite often you don't get them back too early anyway.

Shelldean

hax wrote: »

Beware that some card companies have a policy of marking a refund as a credit, not as a payment. Vanquis for example know this trick and mark it as a credit, so the minimum payment is unaffected.

This happened on a HSBC card too. I had a large refund credited to my account and stupidly assumed it would cover the mimimum payment for that mth. Got a late payment fee tho I did manage to get it refunded. So be very careful when trying this

DifferentFromTheNorm

I used to have to answer questions about this when I worked at Egg, usually from people confused why a smaller amount was taken and being concerned that they were going to get charged interest as a result.

The Direct Debit system recognises the refund as a payment, but the system which picks up on missed payments doesn't recognise it... Which used to cause quite a bit of confusion with customers.

If the refund is smaller than the outstanding balance then it reduces the payment needed (if it hits the account during the days YorskhireBoy mentions) but as a DD still goes through everything is ok. If the refund is for more than the outstanding balance it stops anything being taken by DD, but then as the DD hasn't gone through it triggers a missed payment message to be sent (again, only if it hits the account on certain days).

There's a chance they might have fixed it so that the missed payment isn't triggered, but I doubt it as refunds are still affecting the DD amount and it was never fixed the whole time I worked there.

I guess what I'm ultimately trying to say is, you wouldn't get away with doing this on a regular basis as the account would show up with the collections team as regularly missing payments (only internally, external credit files weren't affected).

You could argue that you can get around the missed payment glitch by making sure the refunds don't exceed the full amount, so that at least a small amount is taken by DD. But, the high number of refunds would probably then alert the fraud team etc.