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Overseas Refunds to Credit cards

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Mal

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When you charge eg $US or $HKD etc to your Credit card, you normally get stung a few % for the forex conversion fee.

If your card is later credited with a refund, do you get stung again with another round of coversion fees?

Is there generally a difference if a transaction is reversed rather than a general credit back to the card?

If specific card/bank matters, it's a CBA Visa. I've looked through the "Important Information" conditions type brochure, and although it talks about forex conversion fees for purchases doesn't mention anything about refunds.
 

Kiwi Flyer

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In my experience it depends. If its a reversal done by the bank (eg successfully disputed charge) then it reverses exactly. If its a credit by whoever billed, then it gets done at the exchange rate applicable at the time the reversal is processed - so yes hit by any currency movement and generally don't recover the fees included in the original charge.
 

abtwo

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Yep, the reversal should be for the entire amount debited to the card from the original transaction.

AB
 

aus_flyer

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The few times that I have had a foreign refund I have been quite lucky - the refund amount has been more than the original amount charged !! :D
 

robertz

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Howdy

Refunds rarely have foreign conversion rates added but they don't refund the conversion rate from the original transaction.

Also the Visa buy and sell rates are different. If you buy something in a foreign amount and credit it back straight away, you loose the 2-3% Foreign exchange plus a margin on the actual exchange rate.

As 'odoherty' said, sometimes you get lucky and end up with more than the original transaction, but from my experience, the AUD $$$ has to have gone up by more than 5-6% from the transaction date against the foreign currency.

Also, another thing to remember, if the transaction is not in US$ some banks will do a HKD$ to US$ conversion then a $US to $AUD conversion. So there is a 2x buy/sell margin to take into account.

Rob
 
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oz_mark

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robertz said:
Also, another thing to remember, if the transaction is not in US$ some banks will do a HKD$ to US$ conversion then a $US to $AUD conversion. So there is a 2x buy/sell margin to take into account.
Some T's and C's are quite meticuluous in describing how currency conversions are done, and mostly they now say from the foreign currency to the AUD equivalent. If it says this, they have no grounds for a double dipping on the margins
 

Kiwi Flyer

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IIRC mastercard does the convert into US$ first then into A$ (or whatever), visa does not and I cant recall for amex and diners.
 

NM

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Kiwi Flyer said:
IIRC mastercard does the convert into US$ first then into A$ (or whatever), visa does not and I cant recall for amex and diners.
Amex does convert via US dollars. however, in my experience they use standard rates very similar to those reflected at xe.com which do not have different buy/sell rates and hence built-in margins. The exchange fee is only added once during the fonal conversion from US$ to A$. This means they are not double dipping as has been implied by some people. At least that is my practical experience when I have carefully checked that I have been charged when using my Amex in places other that USA. I do not feel this process has added any extra or hidden fees to my foreign currency transactions through my Amex card.
 

robertz

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Kiwi Flyer said:
IIRC mastercard does the convert into US$ first then into A$ (or whatever), visa does not and I cant recall for amex and diners.
Just did a bit of a comparison to see if Visa charge more for non US$ transactions. Here's what I came up with.
For comparison, im using a recent trip to Mexico

Withdrew $1000 MXN Pesos in cash from ATM = AUD$130 less $4 trans fee. So $126.00
Purchased $1000 MXN with Visa = $133.50 less 3% Int fee @ $4 . So $129.50

(Had to minus the fee as Citibank have a nice habit of including the fee in the actual transactions)

So it looks like Visa transaction costed me more, even with the fee's taken into account. If its from MX-US-AU conversion or just a bigger margin on their buy/sell rate from Visa is open to interpretation.

P.S. This is with Citibank, they do state with ATM transactions they are converted from local currency to US$ before AUD$.

P.S.S. Remember this is Citibank. Any extra charge or fee could be mysteriously added for no apparent reason.
 

NM

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robertz said:
Just did a bit of a comparison to see if Visa charge more for non US$ transactions. Here's what I came up with.
For comparison, im using a recent trip to Mexico
I'll do a comparision later in the month from Germany and wee how Amex credit card charge, Visa credit card (Comm Bank) and Citibank Readicredit ATM cash withdrawal compare on the same day, and compare with xe.com rates for the same day. Then I will do the same from the USA.
 

Mal

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The amount was finally refunded to my account. I presume as a credit, not a reversal.

No currency conversion fees applied. No refund of previous conversion fee (as expected!).

Lost around 5% on currency fluctuation, which added up to quite a few $ :( Didn't realise the $US has moved that much in the last few weeks...
 

kawoh

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this is quite funny, but i made some relatively large hotel prepaid, refundable bookings, i had to cancel as i found a better rate. i paid for them on my wizard card. when the hotel refunded the funds back to my a/c automatically - i actually made about $60 on the forex difference (a $60 profit!). but with most cards other than wizard, they'll rip you off on currency conversion.
 

snake

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My credit card charges a hefty fee for overseas cash advances and transactions. But its fraud detected system is the best I know of and to me, paying the fees was worth the peace of mind. Nowadays, I check with ANZ (bank issuing my card) for their fraud rating of the countries I would be visiting and take care as ANZ advises. In one instance, ANZ advised me not to use my card at all in that country.
 
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