beep88

Standard term is 1 % charge by the Visa / MasterCard network. So buy/sell (purchase / refund) rate difference is 2% right there.

The bank may add on anohter 2 %, both ways. So Buy/Sell (purchase / refund) would be 6 % difference. i.e. you make a purchase and immediately get a refund, both posted on the same date, you lose 6 %. Standard practice in North America, for instance, and spelled out in the cardholder agreement, unless your bank doesn't charge for currency exchange PLUS refund the 1% network fee to you.

If I call the banks and complain, they always gave me the refund difference, "on goodwill basis".

You buy foreign currency and then immediately "refund" it at a bank or currency dealer, you pay fee both ways. It sounds unfair but they run a business.

889

Except I think that some banks include the network charge when they quote their surcharge, so that half of a 2 percent charge would be going to to the network.

nacho

I did file a complaint and got a refund for those "refunds" by threatening them that I'll go to HKMA if they don't comply - honestly I'll because this is simply wrong - banks can set whatever terms they like BUT it has to be fair and reasonable according to consumer law (at least in the EU). I think this would be a win in consumer case here in Europe. Citibank can charge me 7.67 if I credit a refund to my citibank card that I didn't use it to make the purchase.

Chromie25

Thanks for the bit about threatening to go to HKMA if they con't comply. I would like to know what sort of non-compliance you were referring to when mentioning this to the bank.

nacho

I told Citibank that I'll tell HKMA that they are charging a different exchange rate for refunds of purchases while there shouldn't be 2 rates like this - they have already earned 2+% forex when I made the purchase and it shouldn't be adding another 4% when I receive a refund.

Last time they did it I forwarded a copy of my complaint to HKMA telling them that I'll send this off if they don't comply.

miklcct

I also encountered a huge loss when refunding an Aeroflot air ticket last year. It is not possible to buy the air ticket on Aeroflot web site in HKD, so I paid in RUB instead. The forex fee was 1.75% for that card.

Buy air ticket:
2018-05-03 RUB 70088 @ 0.1283515
Refund air ticket:
2018-06-13 RUB 67608 @ 0.1206081

I phoned the bank afterwards but the agent told that there was no problem on the rate. I have never used that card to buy air ticket since then, and now only use my CNY credit card to buy Aeroflot ticket and pay in CNY.