Credit Cards Refunds abroad

gilesb

I've got Nationwide and Halifax cards so the exchange rates are good.

I have often wondered why when I get refunds from foreign merchants they always seem to be on days when the exchange rates are bad.

I had one recently refunded on the day of the transaction and the sterling amount was different. (This is not due to being offered a chance to pay in Sterling at the terminal, I did not get that offer).

I now understand why , See Timon on http://www.disboards.com/showthread.php?t=271881

Although they have refunded the difference apparently they are under no obligation to do so. The fact that, even if the exchange rate has not worsened, you are not going to get the same back will make me nervous about buying things on Credit Cards that I may want to take back.

By the way Halifax with its no cash advance fees is great in Australia and Denmark where most merchants I used charged a premium for using credit cards

InsideInsurance

The exchange rate would make no difference to the merchant as you've paid them say $1,000 and they refund you $1,000 so a neutral impact to them. Now to you that $1,000 may have equated to £700 bill but when the refund is keyed then a £690 refund due to the movement in exchange rates.

The only time I've had a refund from an overseas merchant was in June this year and in that case the exchange rate had actually changed in my favour and so I got back a massive 10p more than I had paid!

chattychappy

Don't see a problem here. It can go either way and in my case has gone both ways.

I think it has to work this way else people could start playing games with the system. Whilst you're sitting on the goods, why shouldn't you be taking the currency risk?

HelenR1987

When we were on holiday the waiter entered €6600 instead of €66.00 (most expensive tapas ever :P )

We realised the next day and went back to the restaurant and they offered to refund. The exchange rate changed by the time we got our refund, due to it being a significant amount we were a couple of hundred out of pocket, we got on the banks case and they eventually sorted it but it was a lot of hassle we didn't really want.

gilesb

Sorry, cited the wrong story, now corrected.

The point made is that: 'Most credit card companies have two different exchange rates. ONE FOR A CREDIT AND ONE FOR A DEBIT. So, be forewarned, if you put a deposit or purchase something in US dollars and then you return it or you get your deposit back, it will never be the same value that you started with. '

I agree the merchant does not gain - this may have been part of your problem Helen

chattychappy

HelenR1987 wrote: »

When we were on holiday the waiter entered €6600 instead of €66.00 (most expensive tapas ever :P )

We realised the next day and went back to the restaurant and they offered to refund. The exchange rate changed by the time we got our refund, due to it being a significant amount we were a couple of hundred out of pocket, we got on the banks case and they eventually sorted it but it was a lot of hassle we didn't really want.

Well I would be sympathetic to this if you hadn't authorised it. In which case the balance of €6534 wouldn't have been authorised. So your CC wouldn't have been authorised to bill you for this element of the original charge. So the charge should have been adjusted to €66 at the original rate as this would have been the extent of the charge authorised.

But, unfortunately, you did authorise the original amount and this was your mistake just as the merchant made a mistake too. I think you got a decent outcome, but really I don't think you can complain about the hassle of "getting on the bank's case". I'm sure they didn't want the hassle of this either - and they were the one party that didn't mess up.

gilesb wrote: »

The point made is that: 'Most credit card companies have two different exchange rates. ONE FOR A CREDIT AND ONE FOR A DEBIT.

Well this is news to me.... and hasn't been my experience, so I doubt it. Wasn't that article written with US travellers (travelers!) in mind? Willing to stand corrected though.

meer53

gilesb wrote: »

Sorry, cited the wrong story, now corrected.

The point made is that: 'Most credit card companies have two different exchange rates. ONE FOR A CREDIT AND ONE FOR A DEBIT. So, be forewarned, if you put a deposit or purchase something in US dollars and then you return it or you get your deposit back, it will never be the same value that you started with. '

I agree the merchant does not gain - this may have been part of your problem Helen

The reason you never get back the same amount you were debited with is because of the difference in time between the 2 transactions, nothing to do with different rates. Exchange rates can differ by the hour. You have just as much chance of ending up getting back more than you paid.

gilesb

chattychappy wrote: »

Well I would be sympathetic to this if you hadn't authorised it. In which case the balance of €6534 wouldn't have been authorised. So your CC wouldn't have been authorised to bill you for this element of the original charge. So the charge should have been adjusted to €66 at the original rate as this would have been the extent of the charge authorised.

But, unfortunately, you did authorise the original amount and this was your mistake just as the merchant made a mistake too. I think you got a decent outcome, but really I don't think you can complain about the hassle of "getting on the bank's case". I'm sure they didn't want the hassle of this either - and they were the one party that didn't mess up.



Well this is news to me.... and hasn't been my experience, so I doubt it. Wasn't that article written with US travellers (travelers!) in mind? Willing to stand corrected though.

All I can say in support of what Timon said is that the refund rate on my transaction was quite a bit worse than any purchase transaction on the same day or each of 4 days either side so it seems so. This was Visa, if anyone has different Mastercard experiences I'd be interested to know

dalesrider

If the retailer has taken the payment in error. You need to ask them to reverse it. That way it will balance off. If they refund. you stand the chance of a diffrent GBP amount.

If the refund is not your fault, then under visa there is a right for your card provider to claim the diffrence back from the co.

gilesb

meer53 wrote: »

The reason you never get back the same amount you were debited with is because of the difference in time between the 2 transactions, nothing to do with different rates. Exchange rates can differ by the hour. You have just as much chance of ending up getting back more than you paid.

Vary by the hour? not so. Per Visa website:

How does Visa calculate its rate?
Every day—except weekends, Memorial Day, Christmas Day and New Year's Day—Visa calculates the rate for the next day's transactions. The Visa rate is selected from a range of rates available in wholesale currency markets or the government-mandated rate in effect one day prior to the applicable central processing date. Visa makes this rate available to issuing banks, which may adjust the rate when billing cardholders by applying a foreign transaction fee. The rate Visa makes available to issuing banks may vary from the rate Visa itself receives. Most consumers find that using Visa is a convenient and cost-effective way to make purchases and obtain cash when traveling internationally.