Today I Learned: Get Credit Card Refund When Losing Out On Exchange Rate Fluctuation

When you buy travel outside the U.S., you’re usually charged in local currency. In fact, the best advice is always to turn down ‘dynamic currency conversion’ where the merchant charges you in U.S. dollars. They are likely charging you a fee to convert to dollars, and probably aren’t giving you the best exchange rate either – just let your credit card company do the conversion.

That’s even true if you pay using a card that doesn’t waive foreign purchase fees. Those cards will usually still charge the fee, even if the purchase was made in U.S. dollars, because it was a foreign purchase (not merely done in a foreign currency).

However I always assumed you incurred exchange rate risk on returns. If you book a prepaid hotel in Europe, for instance, and you get a refund later the actual amount of the refund could be more or less than what you originally paid.

  • Say the room you booked was 300 euros
  • The hotel gets 300 euros, and your bank charges you in dollars
  • By the time you cancel exchange rates have changed. The hotel refunds 300 Euros, but the amount you see in dollars will be based on current rates.

thesilb emails that he had a booking at The Taj in London. When he cancelled he was ‘short’ 10% of what he had originally paid (in dollars) refunded to his card, since British pounds have become worth fewer dollars than when he made the reservation initially.

That’s when things get interesting,

My Virtuoso agent thought this was “all on me”, risk to me, no point in even contacting Chase. Well, front line agent at Chase suggested I “dispute” the difference, I knew this was wrong but decided to speak to them. The disputes guy says “yeah there’s a specific program for this situation, we absorb the cost, so I can refund you your $1,500.

This was news to me. I’ve redeposited award tickets where the taxes and fuel surcharges were substantial, and I’ve lost money when those fees were credited back to me when the dollar strengthened between the time of booking and refund. It never occurred to me to ask my card issuer (usually Chase in that case) to make good on the difference. It seemed interesting enough to pass along.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. I’m filing a claim today! Thanks! But I suspect this program will now get shut down.

  2. @ Gary — I’ve lost money like this when twice when buying a pair of tickets for ~$5,000 under Delta’s “24 hour” cancel policy and only gotten back like $4,940. I protested with Delta once and got a refund. The other time I let it go due to being too busy and it taking forever to get resolved the first time. Some things aren’t worth the trouble sometimes. This post could come in handy when (if?) we finally receive our expected KE refunds of ~$8,950 vs our initial payment of ~$9,200.

  3. The danger is that it might work the other way round – if the dollar goes down against the foreign currency, then you should get more back. But consistency would mean that the cc company will take that back. I suspect that “getting it both ways” is too good to be true.

  4. It seems that different credit cards (and maybe different holders) have different thresholds up to which they will just absorb the loss. I’ve had it happen several times for small (and sometimes not so small) claims for tickets/rooms where they instantly issue a favorable ruling on the dispute and do a permanent credit. I would think there is a cumulative maximum of how often/how much they will absorb and that this will count towards it.

  5. In my experience it’s not so much fluctuation in exchange rates but more that the buy and sell rates are different. When you spend foreign currency by purchasing something, you’re charged the “buy” rate, if you return or cancel your refund is at the “sell” rate which is always lower. As a Canadian who has frequently charged US purchases and sometimes returned them, I know this well. A refund is always less than the original price paid. I always resented this but never thought to ask for an adjustment. I will next time.

  6. I am trying this today on a refund from my Norwegian trip we had to cancel. Thx!

  7. Best piece for a long time!

    And as to NB, why are people so ungrateful? If I pay $1000 and subsequently cancel why should I ever dream of getting more than $1000 back just because of a “favorable” currency exchange? Of course this should work both ways.

  8. Gary, do you know what department resolved this for you at Chase? I have the same issue on a refund from a Sheraton in Canada where I’m out $1,300 on exchange on the refund. I just got transferred around Chase for the last hour and got nowhere. This is on a Marriott Bonvoy Boundless Visa Card from Chase.

  9. I had the same issue with a flight cancellation refund on my CSR. It was about 10% less due to the current exchange rate. I sent Chase a secure message and they said they would look into it. That was a month ago… we’ll see what happens.

  10. I called Chase at ‭1 (888) 489-8452‬ and they were able to refund me the difference Thanks again !

  11. This is so helpful but we’re in a slightly different situation. We paid for a holiday on our credit card and invoiced in USD for a South Africa holiday that we obviously can’t go on now because of Covid-19. The travel agent said we cannot get a full refund back because they converted the funds to South African Rand and the exchange rate has dropped and they won’t cover the difference so we’d lose out 22% on what we paid. It’s a decent chunk of change so we’re hesitant to accept that. We’ve been speaking with our bank and looking into arbitration but the bank haven’t offered to cover the difference. Is this something we should push for or do you think that would come out of arbitration? The travel agent is standing firm that they shouldn’t lose out.

  12. thanks for this info. I tried to see if Amex Plat had something similar. They said that there is nothing they can do about it. I did not HUCA but let me know if someone had any success with this.

  13. I’m in Singapore at the moment and a few months ago (before coming across your post) I lost about S$12 on a credit card refund for a US$80 purchase. It certainly isn’t much in comparison to what others have lost on large purchases e.g. flight tickets, but it was the first time I’d had to get a refund for a foreign currency purchase and noticed that I’d lost money on it so I called Citibank to enquire. They said they couldn’t do anything about it so I just swallowed the loss lol. Now I’ve started making larger international purchases and am worried about the same thing happening again since the banks here don’t seem to be as helpful as Chase has been for other commenters 🙁

  14. Good article. In my case I am with TD Canada. My purchase was for around $2700 USD
    My credit card was charged but the merchant cancelled the order the next day and refunded the same amount. I lost $200 on exchange rate and the bank is not very helpful.

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