Lost money on credit card refund

drpepper970

I recently hired a car in spain and because I purchased a seperate excess waiver policy I was asked to pay a deposit in case of any damage on return plus a deposit for fuel as it was supplied full. All in it was 383 euros.

I returned the car without damage and full of fuel so a few days after getting home I checked my CC account to make sure I had received the refund.

The initial transaction had cost £345.77 at a rate of 0.90279 but I received a refund of £323.05@ 0.84347.

The card is a Visa with MBNA so I called them to ask how can a refunded transaction not be returned at the same rate and was told there was nothing they could do as the daily exchange rate was set by Visa.

I even asked them would I have made money if the exchange rate had gone the other way and they said yes, which seems ludicrous and something I doubt a financial institution would allow to happen.

Does anyone have any knowledge of this happening to other people and if there is anything further I can do to get my money back? I know its not a lot but I'm more peeved at the stance of Visa/MBNA that the transaction was treated seperately.

Nuclear_Themes

You paid in Euros, you were refunded the exact same number of Euros so yes that seems fair. They were honest when they told you you could have made money but the rate would have to have changed a lot as the buy and sell rate are different.

drpepper970

So I guess I should have asked to pay in pounds then?

meer53

If the car hire company had reversed the transaction instead of refunding it to your account, you would have received the same amount back as the original debit. Because they have processed it as a refund instead, it comes though as a new transaction at a different amount. Call the car hire company and ask them to refund the difference for you. Visa can charge the difference back but only if the refund was actioned due to an error by the retailer. eg. they processed a transaction twice.

whatyadoinsucka

ouch when i have hired cars i usually leave a card imprint to secure a car.
ie they are authorised to charge if needed.

never had to pay over monies upfront

exel1966

If you ask the card company to rectify the stuation they will usually do so without any fuss.

bengalknights

As others say its more to do with how you paid, if you had requested paying them in sterling you would have been refunded in sterling, however with euros you was refunded in euros.

The best course is either get the company to pay the difference.

jonesMUFCforever

bengalknights wrote: »

As others say its more to do with how you paid, if you had requested paying them in sterling you would have been refunded in sterling, however with euros you was refunded in euros.

The best course is either get the company to pay the difference.

Sorry but they will not do this.
You made a transaction in one currency they will refund in that same currency - the currency gain or loss is down to you as per the terms and conditions of issue of your card (all cards have this clause).

dtsazza

I agree with the general consensus that this is something that you were exposed to by transacting in euros from a GBP account. The car hire place may choose to refund the difference as a measure of goodwill, but I don't think they're obliged to.

This struck me as odd though:

drpepper970 wrote: »

I even asked them would I have made money if the exchange rate had gone the other way and they said yes, which seems ludicrous and something I doubt a financial institution would allow to happen.

Why do you find that hard to believe? That's almost the definition of what the exchange rate changing means (you get more X for the same amount of Y).

There's no problem with the financial institution allowing it - you're not making profit at their expense, since the exchange rate reflects how much it costs them to obtain pounds/euros too (including a cut for them).

You've inadvertently taken out a bet (or in financial terms, an exposure) on how the exchange rate is going to move. The card company is no less likely to let you make profit if it went in the other direction, than a bookie is unlikely to pay out if you bet on a horse that comes in. In both cases you'll get the profit but the company has taken their cut.

MrWillyWonka

When I was in New Zealand earlier this year I paid for skydiving which was subsequently cancelled but then the Christchurch earthquake happened and value of the NZ$ dropped which meant my refund was more than what I paid, I ended up £25 in profit. It works both ways as the exchange rate varies. It would be more ideal if the transaction was reversed but it is up to the retailer as the exchange rate does not affect them as they deal in local currency.

In addition the exchange rate are always in the banks favour and the sell exchange rate is never the same as the inverse buy exchange rate. i.e. If I transferred £100 to spain then transferred it back at exactly the same time I would have lost some money, that's the way the banks make profit.