Why You Should Never Change Money at LGW
Jackie Reddy July 24, 2018
An experiment conducted by The Independent at a Moneycorp location at London’s Gatwick Airport (LGW) provides insight into the poor exchange rates offered by bureaux de change across the United Kingdom. The paper’s research found that buying and selling rates were lackluster across many currencies.
The rates offered to travelers by bureaux de change at British airports have come under scrutiny after an experiment conducted by The Independent at London’s Gatwick Airport (LGW).
The research found that regardless of the currency into which they wish to change their sterling, “a passenger who changes £1,000 ($1,310) into a foreign currency at Gatwick, then immediately changes it back to sterling, will lose a minimum of £297 ($389) – enough cash to fly to America and back,” the paper reports.
“The choice of this transaction was to illustrate the extremely wide “spread” between buying and selling rates. The exercise gives an indication of the profit margins applied at airports,” it adds.
The experiment was carried out and calculated using the currency exchange rates offered on Saturday at the airside Moneycorp counter within LGW’s North Terminal.
At the time of this research, the outlet noted that both buying and selling rates were poor across multiple currencies, including Euros plus U.S., Australian and Barbadian dollars as well as South African Rand and a number of Eastern European currencies.
However, as the outlet explains, many airport bureaux de change are subject to very high operating costs, a point that can influence the rates offered to outbound passengers.
Offering her comments to the paper, Pauline Maguire, head of retail at Moneycorp, said, “The reason for our higher airport rates is the significant cost associated with operating there – from ground rent and additional security to the cost of staffing the bureaux. An easy and more cost-effective way for customers to buy travel money is to preorder online and collect at the airport.”
[Photo: Shutterstock]
Just paying for convenience
We had some time to kill at LHR last May and I had some Norway Kroner left over. Out of curiosity I took my cash to the bureau de change in the Queens Terminal. They offered about US$64. I said no thanks and took the same money to my bank when I got back to NJ. They gave me $97 and some change for the same about of Kroner. I think that pretty much sums up why you should plan ahead and not change money at the airport.
Somewhat misleading. It’s roughly 15% spread on each transaction. I suspect few PAX actually buy and subsequently exchange back the same amount of currency, a 15% premium is still pretty lousy in a world with ATM’s but I think the story overhypes the issue.
These companies prey on visitors who are not well connected to electronic financial services. The Chinese are prime examples of easy targets because they travel with wads of cash.
It's not a bad idea to have some local cash on hand if you haven't established a PIN for your US credit card, which I suspect is the case for most Americans traveling overseas. I've had US credit cards rejected in the EU a few times, generally when buying a public transit ticket from a machine. But ATMs are everywhere including airports, and that source tends to result in very good conversion rates, so it makes a lot more sense to withdraw local currency that way, even if you're assessed a fee by the local bank.