Refund Recommendations
Designing the MVP that'll help Members spend their refund wisely
Team
Product Management | Engineering | Product Legal
Role
Product Designer
Company
Credit Karma
Overview
Roughly 70% of Americans live from paycheck to paycheck. For these people their tax refund is the largest check they would receive for the year. Instead of using it to help them make financial progress with their goals, people would use their tax refund to“treat” themselves with expensive meals and tips.
The Challenge
Although Credit Karma members expressed their intention to save their tax refunds data showed that 50% of those who deposited their refunds into a Credit Karma Money account ended up spending the entire refund within 45 days. They tend to use their refunds to make purchases at popular retailers like Doordash, Amazon, and Walmart.
The Hypothesis
A financial tool that helps makes wiser decisions around the tax refund spending would build tax filing intent and drive tax filing off-season/ post-season for the Credit Karma's Income and Taxes products.
Tax Filing Seasonality & Timing
We would strategically launch Refund Recommendation during the pre-tax filing season and integrated it with Credit Karma's Refund Estimator feature to better serve our members.
The aim was to introduce Refund Recommendations after members completed their Refund Estimate, assuming that they would be more interested in suggestions for their tax refund only once they had a general idea of how much they would be receiving.
50-30-20 rule
Product's proposed solution was to strongly recommend Credit Karma member to follow the 50-30-20 rule, a budgeting method that suggests allocating 50% of income towards needs, 30% towards wants, and the remaining 20% towards savings or paying off debt.
This recommendation would educate members on what educate members on what qualified as needs, wants, and savings/debt. Encouraging members to commit to this budgeting method.
Savings and Other Ways to Spend
Streamlining a saving recommendation would help ensure that our members would put their tax refund into a savings account.
Additionally, Refund Recommendations would offer alternative suggestions for how members can use their tax refunds. Suggestions that were based on the increase activity that the other teams/verticals observed during tax season.
Is This the Appropriate Approach?
I was uncomfortable with this proposal from Product. Well knowing that people do not easily commit to financial recommendations. Unfortunately, I was not able to influence Product that we should take another approach. Product insisting to move forward with their proposal.
So I met with the design team to validate my assumptions that Product's approach of giving exact recommendations of how to spend their tax refund might not be the best idea. It would make it seem like Credit Karma is ready to start giving sound financial advice.
My goal was to gain support from the Design perspective that another approach should be taken
Fortunately, I was able to gain the Design team's support and I was provided with access to old research that might be useful.
Research findings [2019/2020]
From the old tax research we could that 40% of our members used their refund to pay down debt and 29% put into savings. This piece of data was just enough for us to move forward with our approach.
Understanding
Design's Proposed Approach
Make it easier for our members to do what they were already doing with their tax refund.
How can we make it easier for members to effectively use their tax refund in ways that align with their financial goals and priorities?
Leveraging the Current Mockups
With the data found in the old research, I was able to mock up an approach that would better serve our members. By grounding the updated mockups in research, I was able to propose and gain Product's support for a new approach. One that would align with our members desires to grow their saving and reduce their debt,
Final Designs
Refund Recommendation's goal is to make it easier for members to do what they are already doing. While priming members with other options to consider.
Refund Recommendation is only accessible to members after they finished their refund estimate. Once in the tool, members are presented with a list of recommendations. Members would then be redirected to the corresponding vertical for each recommendation.
The recommendations would be personalized by presenting data we know about the members. The aim was to inform members of their current financial status and they could use their tax refund towards achieving their financial priorities.
