It's basically a vending machine simulation, I want to refactor it into two classes, a model (VendingMachine) and a Controller. I'm not sure what else to do. Please help.
Having a vending machine model where it interacts with the balance and price is a good call.
I would also think about renaming either your refund method or your refund variable. It gets a little confusing.
You should also think about the fact that your refund method's case statement doesn't have a default. That means if someone doesn't put in either "y" or "n", you're screwed. Same situation with menu. You should always code for the unhappy path, meaning that you should think through for when someone decides to screw with your program.
In your menu case statement, I don't understand why you can't just do this:
case input
when 1
name = "Coffee"
price = @items[:coffee]
... #end of case statement
I'm also not very happy with #menu being this large in LoC. What would you guys recommend?