Ripoff on Visa Refunds for Foreign Purchase

FionaF93

OK, I purchased an item using my AIB Visa online last month from a site in the UK and immeadiately after the purchase I received an email from the seller that the item was out of stock and I would be refunded. I just checked my Visa statement and even though the purchase and cancellation were on the same day, the buy price in Euros was €320 and the refund amount was €307. I called AIB and they said they'd investigate, but the woman more or less said there was nothing they could do about it because Visa has a different buy and sell rate. I then contacted the seller, but he said the sale and refund were both the same amount in Sterling, I argued they shouldn't have sold it to me initially if it wasn't available, but I got no satisfaction. So now I'm out €13 for something I never really purchased.

I've seen similar issues in the past when i bought something with a credit card on holidays and then returned it, but in these cases it was returned on a different day with a different exchange rate and even though the difference was never in my favour, it was usually negligible. I didn't know that the buy/sell spread on Visa exchange rates was 4%, if so this seems huge!

Is there anything else I can do about this and how can we protect ourselves against this sort of thing in the future? :mad: Fiona

dudara

Moved to Banking & Insurance & Pensions

dudara

dudara

Can you see on your bank statement if the refund amount was the same as the purchase amount (in transactional currency of course)?

3DataModem

What were the dates of the purchase and refund hitting your statement?

FionaF93

Yes, the amount in Sterling was the same for the purchase and the refund and the dates for both transaction were on the same date.

3DataModem

It's not Visa who stung you, it's your credit card issuer (AIB I presume).

FionaF93

3DataModem wrote: »

It's not Visa who stung you, it's your credit card issuer (AIB I presume).

That's what I thought, but when I spoke to AIB they blamed Visa. Do all credit card companies or Banks rip us off with a big buy/sell spread on CC purchases/refunds or are some worse than others and how can we find out who is the worst/best?

I still can't believe it is a 4% difference for the same day!!

I guess the Irish banks are so deep in dept they are going to now screw us as much is legally possible and our government is so drunk and crooked they'll let the banks do it.

Cookie_Monster

while annoying it seams reasonable to me tbh.
you would have paid slightly over the odd for the sterling in the first place and received back slightly less on the refund due to the rates.

The seller should not have accepted payment if they did not have the item though.

I actually made money on a refund not so long ago, onl a few cents mind but swings and roundabouts. The FX rate itself will have moved a bit in the few hours between order and refund also.

GerardKeating

Cookie_Monster wrote: »

while annoying it seams reasonable to me tbh.
you would have paid slightly over the odd for the sterling in the first place and received back slightly less on the refund due to the rates.

The seller should not have accepted payment if they did not have the item though.

Cookie_Monster wrote: »

I actually made money on a refund not so long ago, onl a few cents mind but swings and roundabouts.

Me too once, think it was 26cent.

The FX rate itself will have moved a bit in the few hours between order and refund also.[/QUOTE]

All transactions posting on the same day should have the same rate, the card schemes only update daily. But just because they have the same transaction date, does not mean the were posted the same day, most good cc statements should show both days.

FionaF93

GerardKeating wrote: »

Me too once, think it was 26cent.

The FX rate itself will have moved a bit in the few hours between order and refund also.

All transactions posting on the same day should have the same rate, the card schemes only update daily. But just because they have the same transaction date, does not mean the were posted the same day, most good cc statements should show both days.[/QUOTE]

Yes, that's the point, I guess I wasn't clear, my statement has the same transaction date for both purchase and refund as well as the same posted date which was a few days later for both the purchase and the refund. So since both transactions - the purchase and refund were on the same date, I assumed the exchange rate would be the same, but apparently they have a different exchange rate for buy and sell and there's a 4% spread on this range.

I questioned the AIB rep and she admitted there is a spread and justified that they are legally allowed to do so. I knew rates varied from day to day, but I didn't know they had a buy/return spread and a spread of 4% seems a bit excessive. It appears that many others also didn't know there is a buy/return spread and is it as high with other Banks? Yes, occassionally people make money on echanges do to currency flucuations, but 9/10 you loose money and that because they have a spread.

Yes, the merchant shouldn't have initiated the transaction in the first place, but he did and he can distance himself from my loss because he refunded me the same amount in Sterling that he charged me, although he is the one that caused this problem. AIB can claim they are within the law and I'm out the money. Something is wrong.

3DataModem

Something is not wrong.

If you had paid cash and got a cash refund, it would have been in sterling. You were taking a currency risk by doing a transaction in a currency other than that of your card. Buying and selling currency is not done at the same price EVER by ANYONE.

Also, the merchant will have incurred fees from the debit and refund... these are not (generally) cheap.

Solution? Get a sterling card.

PS Now you know first hand why businesses LOVE the Euro.

FionaF93

Hello 3Data,

Something is wrong and you are part of it. People shouldn't take this! This is stealing, no matter how you look at it. This is not the same issue as something I purchased and then decided I didn't like it and returned it a few days later after the Euro fell a bit. As I stated before, the vendor charged me and then realised it wasn't in stock so he then immediately refunded me within minutes of the initial transaction. This should have been a canceled transaction.

As far as the vendor having to pay fees, that's his problem, he shouldn't have advertised and then tried to sell me something that he didn't have in stock, so if he has to pays fees because of his incompetency I have no problem with that. But I did nothing wrong and never received anything, yet I am out money for it!!!!!!!

3DataModem

(I agree with one part - if a transaction is cancelled on the same day then the merchant should do a "void" instead of a refund. No cost to merchant, transaction never appears on card statement.)

I also agree the merchant is at fault for debiting you for unstocked items. For this reason you should always check T&C of online (or any other) vendors before buying.

But the card issuers? They need to exchange at different buy/sell rates... anything else exposes them to FX risk. This is the reality for banks or anyone else doing business in other currencies.

If you had paid cash or cheque or paypal or any other way you would not get the same exchange rate for your refund.. what makes you think credit cards are any different?

FionaF93

Hi 3Data,

You obviously work for one of these greedy banks!! I understand that currencies fluctuate, but all currencies are fixed for each day and if it was canceled/returned on the same day there shouldn't be any change. Even if I actually purchased an item with a different currency in a shop using a credit card and then returned it on the same day I shouldn't be charged since the transactions usually don't go through until at least the end of the day, sometimes several days later. But that wasn't even the case in my situation. I am also shocked that the banks have such a large spread on the rates for CC, we know they rip us off at bank for foreign exchanges, but I wasn't aware there was such a difference on CC purchases. I'm sure if you told a plane full of holiday shoppers on their way to London or NY that their CC companies had such a big spread on purchases most would be shocked. Imagine if someone purchased a very big ticket item on a CC abroad like an engagement ring and then if the GF doesn't like it they could be out a few grand and that's assuming there is no fluctuation in currency.

I'm sick of these greedy banks ripping us off at every corner and even though all the rules are in their favour and it seems they can't loose, they are still too incompetent and loose money and then expect the tax payers to bail them out and then they just raise rates more and rip us off more just so they can get bigger bonuses.

All I know was an incompetent vendor advertised something that they didn't have, started the transaction and then canceled it and I got nothing except a bill.

Yes, I'm angry, I don't have a lot of money and I work very hard for the little I do and I'm tired of being ripped off. People in this country are getting ripped off every where and no one seems to care or do anything about it. What makes it worse, when I try to learn how I can protect myself and warn others of this I get people like you trying to justify imoral acts by these crooked banks!!!!! I hope AIB, BOI and all of them go under and I hope you go with them!!

3DataModem

If you actually read my post I make suggestions about how your problem can be avoided by others. Perhaps you could also make some suggestions? I have also suggested how merchants could avoid this problem (voiding), and have tried to explain why this is the way it is. I suggest you actually try and inform or help people rather than rant and throw insults.

I don't work for a bank... I work for an online seller who deals with these problems all the time. In your type of case we would happily refund the currency loss to you as a gesture of goodwill (provided you were polite...) but not all do this.

If you think the currency spread is too high then i suggest get a GBP credit card ... it isn't hard. And if you want any more of my help or information I suggest you get some manners.

Toots

FionaF93, do not make personal comments about other posters. Please read the charter which contains the rules for the forum and abide by them when posting.

dotsman

FionaF93 wrote: »

Hi 3Data,

You obviously work for one of these greedy banks!! I understand that currencies fluctuate, but all currencies are fixed for each day and if it was canceled/returned on the same day there shouldn't be any change. Even if I actually purchased an item with a different currency in a shop using a credit card and then returned it on the same day I shouldn't be charged since the transactions usually don't go through until at least the end of the day, sometimes several days later. But that wasn't even the case in my situation. I am also shocked that the banks have such a large spread on the rates for CC, we know they rip us off at bank for foreign exchanges, but I wasn't aware there was such a difference on CC purchases. I'm sure if you told a plane full of holiday shoppers on their way to London or NY that their CC companies had such a big spread on purchases most would be shocked. Imagine if someone purchased a very big ticket item on a CC abroad like an engagement ring and then if the GF doesn't like it they could be out a few grand and that's assuming there is no fluctuation in currency.

I'm sick of these greedy banks ripping us off at every corner and even though all the rules are in their favour and it seems they can't loose, they are still too incompetent and loose money and then expect the tax payers to bail them out and then they just raise rates more and rip us off more just so they can get bigger bonuses.

All I know was an incompetent vendor advertised something that they didn't have, started the transaction and then canceled it and I got nothing except a bill.

Yes, I'm angry, I don't have a lot of money and I work very hard for the little I do and I'm tired of being ripped off. People in this country are getting ripped off every where and no one seems to care or do anything about it. What makes it worse, when I try to learn how I can protect myself and warn others of this I get people like you trying to justify imoral acts by these crooked banks!!!!! I hope AIB, BOI and all of them go under and I hope you go with them!!

Nobody forces you to use a bank. Nobody forced you to use a credit card. Nobody forced you to purchase from a foreign shop in a foreign currency.

Perhaps, instead of spending your time going on about the "greedy banks" and hoping the economy collapses, you might realise that your problem is purely between yourself and your vendor. Your bank has done nothing wrong, and pretending that they have is not going to get you anywhere. You instructed your bank to give the vendor money, and they carried out your instruction. They made you well aware of the fees, but you choose to ignore/forget them. Your vendor then determined they didn't have the product and carried out another instruction to your bank (via their bank) to transfer money back to your account (which your bank correctly did).

AIB/Visa have not done anything wrong. Your dispute is with the vendor, and is a risk associated with importing goods. Your vendor did not refund the charge associated with exchanging from Euro to Sterling, nor did they include enough of a refund to cover the cost of exchanging it back to euro.

If you got a taxi to a restaurant etc, only to realise it was closed/full, and then asked the taxi driver to bring you home, do you think the taxi driver would not charge you? He facilitated your travel to and from the restaurant, and had no control over whether the restaurant was open/closed, and would expect to be paid for his services. It is the same with your credit card provider. They merely facilitated your money going from your account, across borders and currencies, and subsequently all the way back. It's not their fault your vendor was out of stock, nor should it be.

FionaF93

Thanks for all the comments and I thought Boards might be able to provide some useful information (ROTFLOL)! Obviously not!

My points are:
1. Yes the vendor is the one at fault and he should have some manners and refund me the money like 3Data's company since it was all caused by the incompetence of the vendor, but he didn't do that and claims he refunded me appropriately.
2. The Credit Card companies should be able to distinguish between refunds and canceled transactions, they claim they can't but they should.
3. AIB has a huge spread on exchange rates for credit cards. I have searched their website and all my documentation for information about exchange rates and the buy/sell spread for their credit cards, but it doesn't appear anywhere, so how is it that "They made you well aware of the fees, but you choose to ignore/forget them"?
4. I have spoken to many friends about this and none of them were even aware there was a spread on credit card returns and like myself previously they all assumed that if a foreign exchange item was returned on the same day, the rates would be the same. Most acknowledged that if it was returned a few days later the exchange rates could be different for the better or worse and all also agreed that it almost always at a loss, hence now realising there is a spread.
5. Because of item 4 above, I wanted to point this out to others, since if it was a very big ticket item you could be talking serious money, but it appears that everyone on boards is so enlightened that you all knew this already, or at least based upon the replies I received, my bad.
6. As far as the vendor I will never buy from him again and I have left him negative feedback, there is no more I can do, but AIB is still my bank, I can and will look to see if any other banks have smaller spreads on their exchange rates, although this information doesn't seem to be too readily available and if anyone has any suggestions on this I'd appreciate it.

3DataModem

FionaF93 wrote: »

Thanks for all the comments and I thought Boards might be able to provide some useful information (ROTFLOL)! Obviously not!

I provided lots of useful information, you have ignored most of it.

FionaF93 wrote: »

1. Yes the vendor is the one at fault and he should have some manners and refund me the money like 3Data's company since it was all caused by the incompetence of the vendor, but he didn't do that and claims he refunded me appropriately.

He did. He refunded you what you paid him. You could ask him to refund your costs due to the fact you are out of pocket for an out of stock item, but that is out of HIS pocket. He has no idea what you've been billed by AIB.

FionaF93 wrote: »

2. The Credit Card companies should be able to distinguish between refunds and canceled transactions, they claim they can't but they should.

Why, so that people getting refunds from foreign sellers get the same amount in their own currency? Do you realize how few people this is, and how doing this would open them up to people exploiting them?

FionaF93 wrote: »

3. AIB has a huge spread on exchange rates for credit cards. I have searched their website and all my documentation for information about exchange rates and the buy/sell spread for their credit cards, but it doesn't appear anywhere, so how is it that "They made you well aware of the fees, but you choose to ignore/forget them"?

It's item 32 in the terms and conditions of the 'Be' card... Item 31 in the terms and conditions of the 'Click' card. Would you like some help in using google?

FionaF93 wrote: »

4. I have spoken to many friends about this and none of them were even aware there was a spread on credit card returns and like myself previously they all assumed that if a foreign exchange item was returned on the same day, the rates would be the same. Most acknowledged that if it was returned a few days later the exchange rates could be different for the better or worse and all also agreed that it almost always at a loss, hence now realising there is a spread.

When executing a purchase of an expensive item in a foreign country I prefer to base by decisions on facts rather than the opinion of my friends.

FionaF93 wrote: »

5. Because of item 4 above, I wanted to point this out to others, since if it was a very big ticket item you could be talking serious money, but it appears that everyone on boards is so enlightened that you all knew this already, or at least based upon the replies I received, my bad.

It is good that you are pointing this out to others using boards... That is what boards is for. I'm sure lots of people have found this thread informative. I have tried to explain why the costs are there, and who has actually charged you, but you seem to ignore my posts.

FionaF93 wrote: »

6. As far as the vendor I will never buy from him again and I have left him negative feedback, there is no more I can do, but AIB is still my bank, I can and will look to see if any other banks have smaller spreads on their exchange rates, although this information doesn't seem to be too readily available and if anyone has any suggestions on this I'd appreciate it.

The vendor gave you back the same amount you gave him... don't you understand that? I suggested that some vendors may acknowledge this issue (especially if the operate internationally a lot) but it's usually not a problem.

I have the info on which acquirers and issuer's charge what fx fees and spreads, but I'm not giving it to you.

3DataModem

I've just realized that the OP is a kid. I'll refrain from posting any more on this topic.

eagle_i

Below is an extraction from Page 19 of AIB’s Schedule of International Transactions:

NOTE: Exchange rate losses may apply in the case of cancellation or amendment to a transaction, unpaid items or where an incoming International Payment is returned to
the sending bank by AIB due to incorrect or insufficient Unique Identifier (see Footnote(3) on page 14 of this brochure).

I know the above does not help you much, as my understanding of what happened to you was that there were two transactions, you bought at one rate (ie. buy rate) and subsequently sold on at the sell rate. No matter what fx institution you go to they all have a buy and sell rate, and from my knowledge that buy/sell spread is nearly always 5% (excluding commissions), perhaps I am wrong on this – maybe one of the fx experts can correct me on this. Anyway, your loss occurred because of the buy and sell transactions rather than the vendor voiding the original transaction, because it was two transactions it does not matter whether they occurred within 30 seconds or 30 minutes of one another.

The only course of action I can recommend is putting your complaint in writing to the complaints officer in AIB. That way they must carry out a full investigation and reply to you with their findings within a specific period. If you are unsatisfied with their finding, you can refer the matter to the Financial Service Ombudsman. Below is an extract from AIB’s Terms of Business Statement.

If you have reason to complain about the provision to you of a product or service, or the failure to provide a product or service, you should firstly contact the manager of the relevant branch or department. If the matter is not resolved to your satisfaction, you should write to; The Manager, AIB Customer Support Centre, Bankcentre, Dublin 4.

If your complaint is still not resolved to your satisfaction, you may then refer the complaint to The Financial Services Ombudsman’s Bureau, 3rd Floor, Lincoln House, Lincoln Place, Dublin 2. Lo Call 1890 88 20 90 or email enquiries@financialombudsman.ie

BTW, when making your complaint in writing set out the facts of the situation not what you assume should be the outcome and above all be polite. I know it is tempting to address your letter ‘Dear Nob-head banker’ or words to that effect, but it does not help when you are hoping the bank might do something as a gesture of good will (stranger things has happened).

FionaF93

eagle eye,

Thanks for the reply!

dotsman

FionaF93 wrote: »

2. The Credit Card companies should be able to distinguish between refunds and canceled transactions, they claim they can't but they should.

but why? As per my example, not only did they do 1 transaction for you, but they did ended up doing a second. Why should they be out of pocket for a problem that exists between you and the vendor?

FionaF93 wrote: »

3. AIB has a huge spread on exchange rates for credit cards. I have searched their website and all my documentation for information about exchange rates and the buy/sell spread for their credit cards, but it doesn't appear anywhere, so how is it that "They made you well aware of the fees, but you choose to ignore/forget them"?

• Type www.aib.ie into your browser
• Select your credit card from the "Credit Card" menu.
• Click "Important Information" (The fact that it is called "Important Information" should be a bit of a hint that it is something a responsible customer would read).
• Click on your credit card (although I don't think it matters too much as they all seem to have the same FX transaction charges)
• Read the Important information relating to your card.

It can't see how it could be any more simple.

I've even included a screen shot of 1 of the relevant bits of information I think might be of interest to (from the "Be" Credit Card)...





You will also notice that there is a difference between the Visa and the Mastercard Rest of World charges. This would lead me to believe that it is Visa/Mastercard that drive the charges.

With regard the Financial Ombudsman, I'm not sure if he would get involved. From his case studies, he seems to be more involved in disputes regarding larger sums of money, and states that he does not investigate "frivolous" complaints. Whether a few euro is considered "frivolous" is debatable, especially when you will have, no doubt, signed a contract stating that you have read, and accept, the terms and conditions, which will have clearly stated what charges apply to your card.

stepbar

The more I think about the more I'm convinced that people nearly expect banks to act like a charity. "Eh, we own you", "I'm paying x for what?" and so on.:rolleyes: God of course no one ever thinks about the costs involved or delivering a service, the cost of maintaining these services and god forbid the fact that a bank is a BUSINESS and needs to make PROFIT.

When it comes to money, people are irrational and emotional freaks.

dingding

3DataModem wrote: »

If you think the currency spread is too high then i suggest get a GBP credit card ... it isn't hard. And if you want any more of my help or information I suggest you get some manners.

Any ideas how I could get a USD of GBP Credit Cards.

Thanks

dingding

Is there any to get a GBP or a USD CC as some posters mentioned.

3DataModem

Try Entropay. They allow you have as many virtual cards as you want.

OneWayBet

This happened to me a few years back, ordered something from the UK for about GBP 300, the website said they ship to Ireland but same day I got an email saying they no longer ship to Ireland and refunded. I think lost about 15 euro.
I rang the bank and got the same story as the OP about the buy/sell rate, I exchanged a few polite emails with the vendor who eventually admitted it was his fault but still refused to reimburse my loss. In the end the only satisfaction I got was telling the vendor to go F himself :-)

jor el

FionaF93 wrote: »

Thanks for all the comments and I thought Boards might be able to provide some useful information (ROTFLOL)! Obviously not!

Boards can't resolve the issue for you, only explain why it is the way it is. Just because you don't like it, doesn't mean the information isn't useful.

You have fallen foul of purchasing in a foreign currency. There is a price to pay for a currency conversion, every time. Accept it and move on. The only alternative is to not purchase outside the Euro zone, or to have credit cards in each currency you want to purchase in.

OneWayBet

3DataModem wrote: »

Try Entropay. They allow you have as many virtual cards as you want.

A number of people have suggested using a foreign currency (e.g. GBP) card to circumvent risk of a buy/sell loss in the event of a refund. I'm am also interested in how this works and if it can save money on average. I took a look at your suggestion of Entropay, looks like they charge a minimum of 3.95% to load the money into the account, surely on average this will be a much higher cost than an occasional buy/sell loss, or am I missing something? Even if you ignore the up to 56 days interest free credit that credit cards provide and ignore the interest forgone on your Entropay balance that you could earn interest on in a deposit account, with the fees they charge I dont see how it will save any money as it seems it will cost an awful lot more.

Load an EntroPay card from a personal credit or debit card 4.95%
Load an EntryPay card from a bank transfer 3.95%
Receive money from a merchant onto an EntroPay card 1.95%
Transfer between EntroPay Cards $0.20 / £0.10 / €0.15
Foreign exchange fee on relevant purchases 2%
Spend using an EntroPay card Free
Return money to a personal credit or debit card $ 6 / £ 3 / € 4.50

Top 5 reasons of dubious benefit:

Leading Reasons Why Users Choose EntroPay https://www.entropay.com/top5reasons.php

It's fast and easy
There's no credit check
It's widely accepted
It's global
It's safe

My top reasons to use a credit card instead:
1. You get up to 56 days interest free credit (just make sure to always pay the bill in full and on time).
2. You don't need to top up in advance
3. You can earn interest on the money you would have had to top up with if using a prepaid card
4. It's plastic not virtual so you can use it in shops etc.
5. You can use it to break into your house if you lock your keys in ;-)

I like the idea of holding a multi-currency account to avoid currency losses but other than listing items on eBay to refill your PayPal GBP account I haven't encountered any such financial service.

OneWayBet

dotsman wrote: »

Nobody forces you to use a bank. Nobody forced you to use a credit card. Nobody forced you to purchase from a foreign shop in a foreign currency.

... snip...

They merely facilitated your money going from your account, across borders and currencies, and subsequently all the way back. It's not their fault your vendor was out of stock, nor should it be.

I think this is true to an extent but your analogy isn't quite fair because the cost to VISA and the bank for the debit/refund transactions would be miniscule (lets be generous and say it cost them 1c of computing power and disk storage) compared to the loss of say 15 euro for the consumer. Compare this to the taxi driver who takes you to the closed restaurant, he has to bill you for his time and mileage expenses and his margin will be an awful lot lower than that of the bank/card issuer.

I dont think anyone would object to a nominal fee for this kind of thing but charging say 3% of a bit ticket purchase is a bit much in my opinion.