Warning: Sainsbury's Calais overcharging by 4%

NFH

Yesterday I shopped at Sainsbury's in Calais. I noticed the checkout staff were offering everyone the choice of paying in EUR or GBP on their credit cards. When a customer in front of me asked what rate would be used to convert the EUR total to GBP, the answer was 1.1900, and to my surprise he accepted it. Converted to a conventional EUR/GBP rate of 0.8403, this is 4% above the current market spot rate which Visa and MasterCard use. Even if a UK card issuer charges 2.75% on top of the Visa/MasterCard rate, it's still much less than 4%, so it is never in the customer's interests to transact in GBP at Sainsbury's Calais. This is of course another example of "Dynamic Currency Conversion", which is normally prevalent in places like Spain, rather than from a British supermarket. However, unlike the Spanish practices documented elsewhere in these forums, the Sainsbury's staff do give everyone the choice, but nevertheless fail to point out that paying in GBP costs much more.

MarkyMarkD

You could equally well point out that Sainsbury's offer an incredibly generous exchange rate to those paying in sterling cash in their Calais store, and hence are ripping themselves off.

If anyone who goes to Calais to buy booze doesn't know the exchange rate before they go, they are stupid.

NFH

MarkyMarkD wrote: »

You could equally well point out that Sainsbury's offer an incredibly generous exchange rate to those paying in sterling cash in their Calais store, and hence are ripping themselves off.

I disagree. To pay a 4% margin for a cash EUR/GBP transaction is far from generous. I've seen bureaux de change in France doing EUR/GBP at margins below 1%. In any case, we're not talking about cash here, but electronic card-based transactions which do not attract the high costs of moving physical cash around.

hunsbury0

You should always use a Nationwide credit card or their Flex a/c card (current a/c)
And pay in the local currency. Nationwide gives a fair rate of exchange & also does not charge any extra fees.

MarkyMarkD

NFH wrote: »

I disagree. To pay a 4% margin for a cash EUR/GBP transaction is far from generous. I've seen bureaux de change in France doing EUR/GBP at margins below 1%. In any case, we're not talking about cash here, but electronic card-based transactions which do not attract the high costs of moving physical cash around.

You are rather seriously missing my point. If you pay in sterling cash, Sainsbury's Calais offer a 1.33 exchange rate which is approximately 7.5% better than the wholesale rate on which your comments are based.

Obviously Sainsbury's are doing it to make money. My point is that it's far better to pay in cash.

NFH

Interesting. I've often seen the independent beer and wine warehouses in Calais offering a similarly favourable exchange rate for GBP cash payments, which I assumed was some kind of VAT avoidance scam, but I wouldn't expect Sainsbury's to do it for the same reason.

By the way, it turns out that Sainsbury's in Calais is jointly run by Auchan, which explains why they don't take Amex, unlike Sainsbury's in the UK.

MarkyMarkD

I didn't know about the Auchan link.

Interestingly enough, given what you've said, they DO accept Sainsbury's gift vouchers. If they accept them at the 1.33 exchange rate - which I presume they will, as they are pseudo-cash - then the best overall deal is to buy discounted gift vouchers (from MBNA, for example, at 6% discount) and pay using them.

lic

Lots of European shops offer this service, European banks also do it. There has been a thread on this already.
martin's advice was always decline the bank's or shop's conversion rate and pay, or withdraw cash at the card's standard rate.