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 first taught me something after he made 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. So you are worried about the $50 in taxes that only get refunded as 45 because of a 10% drop in Sterling as an example?

    Wow you must have a lot of time on your hands to actually ring up
    chase and ask em for a few bucks.

    First first class and your sex life now this. Foremost authority indeed…..

  2. Amex will often do this as a “courtesy”, though I have had agents tell me (fairly) that they don’t have an official policy around it since they accurately pointed out that people don’t tend to call and let them know when these fluctuations work in the customer’s favor.

  3. Great info, Gary. This has happened many times to me and I have always wondered about it, but it’s never been enough money to pursue it.

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