Qantas Website - Dynamic currency conversion

[medhead]

Perhaps a warning to others. If further warnings are required for dynamic currency conversion. But also to double check in case I'm wrong. As usual with currency conversion I always risk confusing myself and getting things around the wrong way.

In this case I've just purchased an airfare from Qantas from AKL-ADL. The total price was NZD677.20, paid by visa. The visa travel tools tells me that 1 NZD = 0.988379 AUD, (the inverse is 1 AUD = 1.01175 NZD). That should mean that I need AUD 669 to get NZD 677. (I think) Ignoring fees, my card should be charged AUD669 to cover the fare.

The Qantas website offer to charge me AUD 695.96, at a conversion rate of 1.0277). That is the same as NZD677.20 x 1.0277. Meaning I need AUD1.0277 to buy 1 NZD, or the NZD is worth more than the AUD. I think Qantas have got this around the wrong way and should have divided by 1.0277.

Of course, I paid the NZD amount, and will wear the 3.3% fee. That's another point to note, I believe that I'd be charged the 3.3% fee even if I took the AUD amount.

Anyway, have I got this right, or am I around the wrong way.

 

[Archphoto]

I think it's a little like using your CC overseas, and being charged at the merchant's exchange rate (which is usually lousy) compared to the CC rate +3.3%. I've been caught a couple of times before, once in Harrods and at Changi IIRC.

These days, I tell them to charge in the country's currency, taking a punt that the rate doesn't fall to their (woeful) rate on the day it hits my account. So far, so good - it's the cheeky online merchants that really bug me.

They say they charge in AUD, but when you get the actual bill it's actually been charged in a foreign currency and the CC has added their conversion rate to the total. (Blurb I'm looking at you right now!!!) They could be more upfront with the extra fees that will be added - if I'm charged AUD100.00 I expect that to be the final figure, *not* AUD103.30.

Call me naive, but I feel that borders on shady business practices - give me the choice of currency charge or if you will only bill in AUD inform me there will be a conversion fee charged by the CC company. Giving me a total price and then finding out I'm actually charged more when I receive my statement, is *extremely* poor customer service IMHO.

 

[Pushka]

Always let the bank do the conversion and not the merchant. So always local currency. And with the 28degree mastercard, the conversion rate is what you see on the currency exchange websites.

So you did right.

 

[Mr_Orange]

As others have said, always pay in the local currency otherwise you are getting rorted.

As for 3.3% (or whatever your bank charges you), get yourself a Platinum or above Bankwest card and forex fees are waived. If you go for the QF point earning card you still earn on foreign transactions.

 

[Mr_Orange]

So far, so good - it's the cheeky online merchants that really bug me.

They say they charge in AUD, but when you get the actual bill it's actually been charged in a foreign currency and the CC has added their conversion rate to the total. (Blurb I'm looking at you right now!!!) They could be more upfront with the extra fees that will be added - if I'm charged AUD100.00 I expect that to be the final figure, *not* AUD103.30.

Call me naive, but I feel that borders on shady business practices - give me the choice of currency charge or if you will only bill in AUD inform me there will be a conversion fee charged by the CC company. Giving me a total price and then finding out I'm actually charged more when I receive my statement, is *extremely* poor customer service IMHO.

Agreed. Apparently something changed though, such that even though you are paying in AUD on apparently AU web site, if the merchant does their banking somewhere other than Australia, it is considered a foreign transaction and your bank belts you with the fee. Some merchants (ASOS for instance) are supposed to use a local merchant bank although it doesn't always work.

It seems to me that it is just the banks finding another loophole to pull it out of their customers sideways!!!

 

[medhead]

I think not doing DCC is a given. I was actually trying to look at the mechanism for the conversion. Or perhaps what is the actually exchange rate displayed. Here is a picture. Either they've stuff up the conversion or it's very misleading.
View attachment 45924

I had the impression that currency exchange fee is charged based on the merchant location, not the currency. My rough guesstimate of the final cost with fee paying in NZD was $692. Pretty close to the $695, but then I'd also be hit with 3.3% if I did pay the A$695.

 

[medhead]

As others have said, always pay in the local currency otherwise you are getting rorted.

As for 3.3% (or whatever your bank charges you), get yourself a Platinum or above Bankwest card and forex fees are waived. If you go for the QF point earning card you still earn on foreign transactions.

Good point. Normally I'd use my citibank plus debt card. Just didn't have money on it today. The card I used will gain 4points/$

 

[Archphoto]

I think not doing DCC is a given. I was actually trying to look at the mechanism for the conversion. Or perhaps what is the actually exchange rate displayed. Here is a picture. Either they've stuff up the conversion or it's very misleading.
View attachment 45924

I had the impression that currency exchange fee is charged based on the merchant location, not the currency. My rough guesstimate of the final cost with fee paying in NZD was $692. Pretty close to the $695, but then I'd also be hit with 3.3% if I did pay the A$695.

I just had a quick look at my currency converter, and its showing me AUD669.71 - so they're slugging you a lot on the exchange if you decided to charge in AUD. And as you said, highly probable you'll get hit with another 3.3% on top of that. :evil:

The banks make enough $$$$ out of us these days - I'm happy to charge in foreign currency and use the exchange rate on the date of processing to have some say in how much they get out of me. :mrgreen:

 

[timster]

I am increasingly finding overseas vendors (or QF in this case !) attempting to charge my card in AUD without asking. More often than not they ask, but sometimes they don't.

That has been most common in hotels and airport duty free. I don't know if that's what they have been told to do, or they think they are doing me a favour, or their English isn't good enough to ask me what I want to do (eg in Thailand). So now I always say "pay in <local currency>" when I hand over my card. If they present me with a transaction slip to sign that is not in a currency I have agreed to, I refuse it and get them to re-do it.

Online overseas vendors will sometimes present the transaction initially in AUD but give you the option to back out of it to local currency. Same with some overseas ATMs. So you have to be vigilant.

I always use 28 Degrees MC for overseas purchases (both travelling and online purchases), and Citibank Visa Debit (preloaded) for overseas ATMs. No fees that way.

 

[medhead]

I had the impression that currency exchange fee is charged based on the merchant location, not the currency. My rough guesstimate of the final cost with fee paying in NZD was $692. Pretty close to the $695, but then I'd also be hit with 3.3% if I did pay the A$695.

Turns out my rough guesstimate was pretty good. Final AUD charge on the card was $692.42, $3.54 less that the DCC amount offered by Qantas (which may have then involved a currency fee)

 

[maxwelljames]

This practice is certainly not restricted to Qantas or airlines in general. I first was scammed in this manner a couple of years ago by a little pub hidden away in Devon, UK. But last year It happened to me with a booking at the Pearl/Emerald Hotel in Shepherds Bush in London. I had booked through Booking .com at a UK pounds price and the hotel presented me with a Visa slip from the credit card machine in Australian dollars. This showed an Exchange Rate Mark-up of 3.5%. I had no say in it but had to sign it, stating that I had agreed to this charge. I had many, many emails back and forth to Booking.com. They denied that it had occurred although I emailed them a copy of all the documentation. The ANZ Bank charged me an exchange fee, but on my explanation to them , to their credit, they credited me for the amount. Booking .com are obviously complicit in this practice and I have not and never will use them again.

 

[travelislife]

I think it's a little like using your CC overseas, and being charged at the merchant's exchange rate (which is usually lousy) compared to the CC rate +3.3%. I've been caught a couple of times before, once in Harrods and at Changi IIRC.

These days, I tell them to charge in the country's currency, taking a punt that the rate doesn't fall to their (woeful) rate on the day it hits my account. So far, so good - it's the cheeky online merchants that really bug me.

They say they charge in AUD, but when you get the actual bill it's actually been charged in a foreign currency and the CC has added their conversion rate to the total. (Blurb I'm looking at you right now!!!) They could be more upfront with the extra fees that will be added - if I'm charged AUD100.00 I expect that to be the final figure, *not* AUD103.30.

Call me naive, but I feel that borders on shady business practices - give me the choice of currency charge or if you will only bill in AUD inform me there will be a conversion fee charged by the CC company. Giving me a total price and then finding out I'm actually charged more when I receive my statement, is *extremely* poor customer service IMHO.

Don't blame the merchant or website! This is 100% your credit card companies issue so take it up with them. The merchant is charging you in AUD no matter where they are located but some sneaky banks/credit card issuers have a clause that state 'if the merchant account is outside of Australia they will charge their international transaction fee'.

Ludircrous and as you have shown the blame often ends up in the wrong spot!

 

[medhead]

Don't blame the merchant or website! This is 100% your credit card companies issue so take it up with them. The merchant is charging you in AUD no matter where they are located but some sneaky banks/credit card issuers have a clause that state 'if the merchant account is outside of Australia they will charge their international transaction fee'.

Ludircrous and as you have shown the blame often ends up in the wrong spot!

Yet in my example post. The merchant offered to charge me $695 before any card issuer fee was added, which was more than the card issuer ended up charging me including fee. That rip off is entirely created by the merchant. The fact that the card company would/might then charge another 3.3% fee is a separate issue.

 

[travelislife]

Yet in my example post. The merchant offered to charge me $695 before any card issuer fee was added, which was more than the card issuer ended up charging me including fee. That rip off is entirely created by the merchant. The fact that the card company would/might then charge another 3.3% fee is a separate issue.

Yes yours is a different situation and you are 100% correct that they are doing the dodgy DCC and taking a cut. But that is 'obvious' because the original advertised price was in the foreign currency. They are trying to make it 'convenient' for you whilst making a buck by doing the conversion for you.

The other situation (which the other poster was describing) is where a .com.au website might be selling and advertising all their products in AUD. you buy something off them and it comes up on your card with a separately list international transaction fee. Unfortunately there is no way of knowing where they locate their merchant account. You or I could go and open up a merchant account in a number of different countries. The website isn't doing the dodgy. It is your Credit card T&Cs, not all cards do this.

 

[geost]

A sneaky variation on the theme:
I got a Multi-Currency Cash Passport card from Heritage Bank for use in Mastercard ATMs on a trip to UK and Europe last July. I loaded it with AUD, Euros and GBPs. I used the card to withdraw Euros in Europe without any problems. Then I drew GBP £100 from a HSBC ATM in Windermere in England at an ATM that is listed on mastercard.com/interactivelocator/atm. According to the wording of the PDS this drawdown should have been taken from the >£500 on the card. However, when I logged on to check balances I found that it was actually taken from the AUDs. This was quite contrary to the advice in the PDS which (from cashpassport.com.au) states:
‘Multiple Currencies - order of priority
……..the Card will first take funds from the relevant Currency balance, i.e. if the transaction in question is in US$ the Card will first look to see if you have a sufficient US$ balance …….’

I had kept the barely legible transaction record printed by the ATM and there were the words ‘I confirm that I was given a choice of payment currencies and that I could have paid in GBP. I confirm the exchange rate used to perform the currency conversion and my decision to pay in AUD is final’. Now maybe there was a message on the screen and maybe I had options when I pressed the buttons but any fine print couldn’t be read because the screen was all crazed and scratched, and anyway who reads the fine print when they’re parked on a double yellow line!
On my return I wrote a nicely worded letter to Heritage Bank and pointed out that while the amount of money involved in the different exchange rates was small, this was a sneaky process. The wording in the PDS should not just warn card users to be aware that some ATMs may charge a fee but also warn that some may have a default to make a direct currency conversion to AUD.
Guess what? I got a nice letter back thanking me for the feedback and an even nicer $50 credit in my Cash Passport account.
This experience proves two adages 1. Always check and check again, and 2. You catch more ants with honey than with vinegar!

Safe travels!

 

[Mr_Orange]

Don't blame the merchant or website! This is 100% your credit card companies issue so take it up with them. The merchant is charging you in AUD no matter where they are located but some sneaky banks/credit card issuers have a clause that state 'if the merchant account is outside of Australia they will charge their international transaction fee'.

Ludircrous and as you have shown the blame often ends up in the wrong spot!

This is not quite right, at least according to Westpac it is not. Westpac told me that even though a business/web site charges in AUD they may use a foreign merchant bank and it is for this reason that the foreign transaction fee is levied.

That is still a rort IMO, since banking is international these days so it shouldn't matter where the merchant bank is.

Web sites that price and charge in AUD should disclose the above though and warn that credit card providers may charge the fee.

 

[travelislife]

This is not quite right, at least according to Westpac it is not. Westpac told me that even though a business/web site charges in AUD they may use a foreign merchant bank and it is for this reason that the foreign transaction fee is levied.

That is still a rort IMO, since banking is international these days so it shouldn't matter where the merchant bank is.

Web sites that price and charge in AUD should disclose the above though and warn that credit card providers may charge the fee.

Have a read of what you wrote, it is pretty much word for word what I said, so not sure how it can't be correct!

It is your Australian based credit card issuer who is levying this fee. Nothing to do with the merchant or website. As far as they care they are advertising and selling you a product in Australian dollars, regardless of where their merchant is located. Some banks/card issuers charge their international transaction fee in these cases, some don't.

 

[maxwelljames]

This local currency transaction that I reported, with an Exchange Rate Mark-up (of 3.5% above the bank exchange rate), was the only transaction out of 40 that I did on this trip, with the same Visa card and same bank. If it is the banks' doing, then why did the bank only do it for 1 out of the 40 transactions. It was just this particular hotel which was the scammer.

Don't blame the merchant or website! This is 100% your credit card companies issue so take it up with them. The merchant is charging you in AUD no matter where they are located but some sneaky banks/credit card issuers have a clause that state 'if the merchant account is outside of Australia they will charge their international transaction fee'.

Ludircrous and as you have shown the blame often ends up in the wrong spot!

 

[travelislife]

maxwelljames, I think there is a little bit of confusion. There are two scenarios being discussed in this thread.

1. The merchant doing DCC unknowing to the customer on the eftpos/credit card machine when purchasing in a foreign currency
This is the situation you discussed above regarding your hotel and booking.com. When you made the booking online with booking.com you weren't actually charged. You were then charged by the hotel who without your knowledge did the DCC charging you in your home currency. This is wrong and is 100% the merchants fault.

2. You make a purchase online in AUD but when you get your back statement you are charged a 'foreign currency conversion fee'
This is the situation I was discussing referencing another poster. This is 100% the banks doing, not the merchant as I have discussed.

Does that make sense?

 

[maxwelljames]

Yes, many thanks we were at cross purposes I suppose.
.

This local currency transaction that I reported, with an Exchange Rate Mark-up (of 3.5% above the bank exchange rate), was the only transaction out of 40 that I did on this trip, with the same Visa card and same bank. If it is the banks' doing, then why did the bank only do it for 1 out of the 40 transactions. It was just this particular hotel which was the scammer.