Get Credit Card Refund When Losing Out On Exchange Rate Fluctuation

Get Credit Card Refund When Losing Out On Exchange Rate Fluctuation

by Gary Leff on November 20, 2023

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.

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