Exchange rate means reduced refund - what can be done?
 

This is probably covered somewhere, but I couldn't find it, so forgive me asking a question which is probably not original...

I booked a ticket back in January for travel earlier this month. BA cancelled two of the four flights on the ticket, and were happy to give me a full refund. But the flights originated in the UK and I live in the USA and paid with an American credit card. As a result, while they refunded the full sterling value of the ticket, the difference in exchange rates means I have lost around $60 on the transaction. Can I do anything about this?

No. That's the risk you take with paying in foreign currency.

I do wonder about whether this is correct. Under the T&Cs under which I booked from the USA, it is clear that the circumstances warrant a full refund. BA certainly has a US bank account. That it chooses to bill me in (what to me is) a foreign currency is not, I would suggest, a factor in terms of my rights.

Has nothing to do with the airline (who've refunded everything they owed) and all to do with your credit card provider and the exchange rate they're using on any given day when processing the refund to your account. They wouldn't have come after you had the exchange rate meant your £ based ticket gave you more $ than you originally paid. It's just something to be mindful of on future foreign currency transactions that exchange rates do fluctuate. And in both directions.

Unfortunately there’s really not much that can be done. BA and most airlines sell their tickets in the currency at point of origin and also depends on which ticket office location sold the ticket too that can determine the currency on which the ticket was issued.

Essentially when the refund is actioned, it’ll be done like for like, same currency and agreed amount. If you paid them £100 and now you’re due back the £100, BA will pay you £100 as agreed. How your card company deals with it, how the exchange rate market reacts is secondary and not the merchant’s problem. Conversely there are scenarios where the exchange rate might have worked in your favour another time and you gained money as a result when converting back to USD than what you originally paid. :)

Sadly the $60 will have to be something you’ll have to accept unfortunately (unless your bank/credit card company offer some form of “protection” out of their own pocket for such scenarios), I guess at least it’s only GBP-USD you’re looking at and not something like the Lebanese Pound which tanked tremendously in a very short period of time!

When you bought the ticket did you buy it on the UK or USA site of BA? Was the charge originally in GBP or USD?

Many credit cards have a surcharge added for foreign exchange, and for a refund sometimes you can get that reversed - but you'd have to call your credit card company, as that's nothing to do with BA.

Irrespective of the BA country website OP would have purchased it from, if his booking was indeed an ex-UK/Channel Islands/IOM/Gibraltar itinerary, it would have charged him in GBP regardless of whether that was booked through BA’s UK/US/Irish/Indian/Spanish/etc websites.

Only scenarios where it might’ve not have been charged in GBP would’ve been if the booking was made via non-UK BA phone lines/ticket offices or non-BA channels like travel agencies or an Avios booking.

Not sure why this is in the BA forum at all as it has nothing to do with BA.

OP chose to pay using a credit card which one presumes is a USD card issued by a US bank. He was charged whatever it is that the ticket cost in GBP converted to USD and when BA issued a refund it issued a refund of the full sum in GBP. Unfortunately the USD has apparently dropped against the GBP in the interim and thus his bank has credited whatever that amount of GBP are worth in USD today.

One trusts that if the USD had increased in value, OP would not be complaining that his currency arbitrage transaction was a success.

As others note, if there was a fee charged for the transaction (quite rare for a US-issued card), most issuers will refund that as a customer courtesy.

What if the FX rate had moved the other way, would you have been posting about what was easiest way to return the currency gain to BA?

Not necessarily, BA can charge you in whatever currency you want. I've had BA charge me for an Ex-Italy flight in Canadian Dollars for example.

Oh really? I am curious how you managed to do this via the website? I have just made a couple of dummy searches on BA’s Italian and Canadian website for MXP - YYZ (searched both one way and return), on all occasions it shows up in EUR and not CAD or any other currency for that matter nor does it give me the choice as you proclaim. Of course if one called BA’s Canadian number or visited BA’s ticket office in YYZ, then I can totally see how and why a CAD transaction occurred.

Anyway, don’t want to veer OT. But I’m curious as if indeed one could pay in any currency they want via ba.com, all these years of ex-EU I would’ve happily chosen my home currency of GBP if I had the choice via BA’s website! Lol. But if indeed I’ve been missing something all this while, I’d be grateful for your insight and would happily stand corrected! :)

Not the website, I had to call in. Possible on Expedia or the like, but not a BA website I don't think.

Mind you, the OP didn't say where he bought the ticket; if was from BA direct or a travel agent.

https://cimg2.ibsrv.net/gimg/www.fly...5a4441816d.jpg
BA APP, Accessing the BA Canadian Website from within Canada.

https://cimg9.ibsrv.net/gimg/www.fly...4b54c3182b.jpg
If you continue through to purchase, it will be billed in CAD Dollars.

James

i’m not sure what you are trying to show here? This merely echoes the point the message you are answering was making: that on the website, the default is always to bill all customers in the currency of the point of origin.

Jagboi’s counter example was not about a flight ex-Canada but a flight ex-Italy. However, as pointed out, this can only be done on the phone (or through otas) and in fact has to be done through the whole issuing process so you must specify you want to purchase in currency x at the start of the call.

note there is one exception which is avios tickets for which the default is to always charge in the currency of the baec account’s residence.

i dont see any problem here.

you are eligible for a full refund (X GBP). you got the full refund: X GBP.

you bought something in GBP, you got the GBP back. if you dont want the exchange rate risk, dont buy something in foreign currencies.
Sometimes you "win", sometimes you "lose". i kinda have the feeling that you wouldnt have opened a thread in the case of earning 60 bucks due to changed exchange rates.

for the record: getting Y dollars back today because you paid something with GBP earlier this year, isnt a full refund with same payment to me. Its not British Airways fault/error/issue that you dont have a GBP credit card, if you have to buy the GBP first, thats your issue. and sometimes you even have to pay a fee for that. thats the same problem I have when I buy domestic tickets with AA. sometimes i lose when i refund them, sometimes I win.

The flight in question that I booked was actually LIN-LHR, and was billed in CAD.

At the time I was doing a "Reverse Ex-EU". I could get a ticket from Canada-LHR in CW and the prices was ~$6,000. However, if I bought a ticket Canada-LIN it was between $2500-2800 for the same dates, also in CW. Then I nested a LIN-LHR round trip into that. So I would fly to Milan, have lunch in the lounge and then fly back to LHR (again) as I had connected there on my way to LIN from YYC. Reverse the process going home, and I'd go through LHR twice in a morning.

I had the LIN-LHR flight billed in CAD as was easier to claim back on my expense account if everything was in my home currency. I also avoided a 2.5% forex fee on my credit card.

Apparently Chase allow you to do a chargeback for the difference. Rather than billing the airline, Chase covers the fluctuation. (This is an official process which the agents should be aware of). Give your cc company a call and ask them.

And my entire initial point was debunking a claim made by yourself that you could change currencies via BA’s website which you’d insinuated was an incorrect assertion...lol. Probably best that one re-reads a comment before correcting/disagreeing haha. I had already clearly stated that booking via other channels will indeed allow for a change in currency, which later on you’ve confirmed yourself that you booked it via a non-BA website channel! ;)

Of course it’ll bill in CAD on BA’s website if it’s an ex-Canada itinerary. No disputes about that. Please bring up an ex-Italy to Canada itinerary (non-Avios) on BA’s website and if it charges in CAD even for that (or indeed allows you to change it as per your wish), then I’d love to know what one has done to get it to do that. :)

BA's website does not support currency switches, many airlines do allow this. However you can call up and pay in a different currency for the Point of Sale, so the OP could have paid directly in USD or indeed CAD, rather than GBP. I think you have to pay the £10 service fee for that, but with some transactions that is a better deal anyway given what some cards charge (e.g. 2.99% on Amex).

However this is all a red herring, had the OP paid in USD or CAD or whatever then the refund would still be calculated according to the POS reference currrency and then translated to the original form of payment at the relevant IATA rate. And thus the arbitrage results. The only way I know around this is that if the refund is close to the original transaction, some credit card companies match up refunds and can spot if a difference is currency related, they then clear the refund down against the source transaction, either automatically or upon request.

This is correct. I've seen multiple reports on this.

In Hong Kong, I can call the bank to get back the difference. In particular, sometimes there is a foreign currency transaction fee of around 2% that the bank should pay you back but they normally don’t do proactively.

Amex does the same. You can just do a dispute online and click the appropriate boxes.

Or don't wait for BA to refund, just do a chargeback of the full amount when the flight has been cancelled / they have not refunded within 7 days on the basis the service won't be provided. My experience is that then there's no question of the current exchange rate.

I believe that if you use Curve you will get back the exact amount you paid in GBP, at least this is my experience with transactions of smaller amounts, but of course Curve comes with a fee-free limit unless you pay the subscription.

The airline has provided a full refund - the customer's bamk fees are not BA's issue
Contact the card company and it may choose to reimburse the fees

With the airline having agreed to a full refund and having paid the refund, there is nothing to dispute

Yes, this is why you need to dispute it before the refund arrives, when there still is something to dispute.

Chargebacks incur significant fees for merchants, plus much higher internal processing and admin costs. For many of us, this crosses a moral line - totally fine if BA has screwed up and it’s the easiest way to get a resolution, but as here they’ve agreed - and paid - a full refund without question or hesitation and have done nothing wrong, I personally don’t think it’s fair to screw them over for it.

In addition, in Europe chargebacks are only allowed (under Visa/MC rules) if an attempt has first been made to get a refund from a merchant, so your advice would not be permitted anyway (although I appreciate the OP is in the US, where rules differ in this respect).

US card issuers are free to require that a consumer make a good faith effort to recover disputed funds from the merchant vendor. Some do, some say they do, and some don't. The exceptions are bankruptcy where it is recognized that it is futile to try to recover and certain items such as fees imposed by the card issuer itself.

OT (apologies) but worth noting that Curve now charge a fee for currency transactions that take place at the weekends:

Source: https://support.imaginecurve.com/hc/...-money-abroad-

On the other hand, BA is supposed to refund within 7 days and frequently flouts this requirement. And of course with no website option and long phone waits (not so relevant for silver / gold members) getting a refund can be frustrating. I don't think its fair for the OP to have to take on exchange rate risk for as long as is convenient for BA, and once it's day 8 after seeking a refund I think BA is fair game.

Depends what the FX position is on day of refund (say day 15) v day 7 for instance.

I don’t think it’s fair to raise it directly with a bank without even asking BA first. There are rarely long phone waits now, and most refunds are paid on time (as reported on FT). If it does take ages, as I said before, fair enough. But what I don’t think is ok is not even trying first, as I understood your original post to be advising.

I had the opposite experience I had two Australia - Europe trips booked totalling 8 months before covid hit. With the multitude of refunds I made money on exchange rates with some and lost with others. I think I probably ended up ahead.

The airline probably doesn't even know the currency you paid in, they just received an amount in their currency from the credit merchant. Ditto for the refund process.

Be thankful you got a refund rather than a voucher not worth the paper it's printed on (eg. Air Asia) or a legal, stamped contract probably of a similar value (Air Armenia).

For those advocating trying things like chargebacks to ensure they don’t lose out, would they return any excess to the airline if the exchange rate goes in their favour between booking and refund or is it just a one way street?

If I wanted to speculate on the currency market I'd join eToro or another CFD website (and probably never see the money again). And yes, I've done chargebacks where waiting for the refund instead would have resulted in an exchange rate massively in my favour (and I wonder if Ryanair was secretly happy I'd done the chargeback...).

I mean if BA.com just let you pay in any currency this wouldn't be an issue.

Many credit card issuers will make up the difference as a courtesy. No need to request a charge back.

I cancelled an AA ticket, bought with a UK credit card. Initially I got back less than I had paid and speculated on the AA forum about exchange rates etc - a week or so later a second refund appeared which made up the shortfall.

If you paid with VISA, try disputing. You may be able to recover the difference under rule 11.4.2 in VISA Core Rules.

Funny one this, I’m usually always on the side of the consumer against the faceless corporations, but in this instance, I don’t really see why either the merchant or the card company should be on the hook for currency fluctuations. When you pay in a foreign currency, you accept the rates as they are, knowing they can change - caveat emptor.

Curious, does your card charge a FX fee? A few years ago I took a voluntary downgrade on LH at the gate. The gate agent swiped my card and said the credit would post to my account. When the transaction posted I got the original downgrade plus Chase credited the FX fee.