Foreign companies billing you in AUD

[smit0847]

Im confused- is this considered a foreign transaction and would be subject to a fee? I never know whether to use my fee-free 28 degrees or use a point earning AUD card?

 

[Hvr]

Do not ever accept a foreign company's offer to bill you in AUD! Google DCC, or Direct Currency Conversion to see how you will be ripped off.

 

[snabbu]

Im confused- is this considered a foreign transaction and would be subject to a fee? I never know whether to use my fee-free 28 degrees or use a point earning AUD card?

If you are billed in AUD from a foreign company you should use a points earning CC as the conversion is already done for you (and you have paid more than if you paid in the native foreign currency using 28 degrees).

 

[Danger]

I have an ongoing issue with ANZ about this very thing.

I regularly shop online at a fairly major clothing brand. The site ends in .com but the prices are displayed in AUD and always to a whole dollar (not something like $23.57 that you sometimes see on other sites). Indeed, day after day I go back and the prices are the same meaning there's no currency fluctuations involved. During the payment process everything is in AUD and there's no mention of anything foreign.

When the charges posts to my credit card it's always just an AUD amount, no reference to any foreign amount, but it's always marked up 3% (the typical foreign transaction fee). I always file a dispute with ANZ and they always come back saying 'one time exception, we'll credit the difference' but every time they say that if the merchant is billing from an overseas bank account, regardless of how I'm charged on the website, I'll be charged a foreign transaction fee.

I can't understand the logic of this and keep disputing the charges time and again.

 

[coriander]

I regularly shop online at a fairly major clothing brand. The site ends in .com but the prices are displayed in AUD and always to a whole dollar (not something like $23.57 that you sometimes see on other sites).

i suspect you may be a victim of Dynamic Currency Conversion. I have always been under the impression that the standard advice is that you should always purchase in USD (preferably with 28degrees mastercard or similar fee free card), never allow merchant to do the conversion. A couple of months ago I purchased from saks 5th avenue items worth about USD150. They offer to price in AUD, I checked and there was about an $8 difference between their AUD price and a USD price converted at the daily mastercard rate.

 

[serfty]

...
I can't understand the logic of this and keep disputing the charges time and again.

The logic is that banks perceived that with DCC on foreign transactions billed in AUD, they had not been getting their 3% or so cherry, so they changed to T&C's to have the foreign transaction fee applicable to any billing from an overseas bank account, irrespective of the currency.

Danger's situation does not appear to be DCC though, since DCC is much more onerous. (The vendor's DCC rate gives them a ~3% rake, followed by your Banks application of another ~3% on top of that.)

 

[RooFlyer]

Here's a theory for Danger: The 'real' price is in (say US$) but they display a constant A$ price, not worrying about the variation in the FX (except maybe once a month or whatever). Their mark-up is such they can absorb the FX (but gain any benefits). Hedging could fix this issue too. But then, when billed, it IS in billed the US$ amount of whatever equates to the constantly-displayed A$ price.

Kinda complex though and the merchant appears to be doing the Aussie shopper a favour (not counting on the ANZ!!) - but its enough to get at least one shopper returning!

Also Danger, have you tried clearing the site' cookie, or allowing it if you've blocked it? Just to see what happens.

 

[Danger]

The logic is that banks perceived that with DCC on foreign transactions billed in AUD, they had not been getting their 3% or so cherry, so they changed to T&C's to have the foreign transaction fee applicable to any billing from an overseas bank account, irrespective of the currency.

Interesting. But how does the consumer know they're going to be slugged the fee? Sure, if it's a foreign currency you know you've got the 3% coming but if the prices are presented in AUD (and particularly given they're to whole dollar amounts), how do you tell?

Here's a theory for Danger: The 'real' price is in (say US$) but they display a constant A$ price, not worrying about the variation in the FX (except maybe once a month or whatever). Their mark-up is such they can absorb the FX (but gain any benefits). Hedging could fix this issue too. But then, when billed, it IS in billed the US$ amount of whatever equates to the constantly-displayed A$ price.

Kinda complex though and the merchant appears to be doing the Aussie shopper a favour (not counting on the ANZ!!) - but its enough to get at least one shopper returning!

Also Danger, have you tried clearing the site' cookie, or allowing it if you've blocked it? Just to see what happens.

Also interesting. Although I'm curious as to why the ANZ statement doesn't say anything about it be a foreign transaction. It's been awhile since I've used an ANZ card for a foreign transaction but from memory it will include the foreign amount and some note about the 3% charge. At least online (I haven't got the proper statement in front of me) there is absolutely no mention of this, just the AUD amount and nothing else.

 

[aussieboozer]

The logic is that banks perceived that with DCC on foreign transactions billed in AUD, they had not been getting their 3% or so cherry, so they changed to T&C's to have the foreign transaction fee applicable to any billing from an overseas bank account, irrespective of the currency.

Danger's situation does not appear to be DCC though, since DCC is much more onerous. (The vendor's DCC rate gives them a ~3% rake, followed by your Banks application of another ~3% on top of that.)

The 3% fee on any transaction that originates overseas regardless of the billing currency has been around for ages. Strangely this fee was removed for AUD transactions on my Westpac Earth Black Amex but still remains for the Earth Black Mastercard!