credit card refund at different exchange rate
Adam Funk
card. The bags were delivered late and the airline agreed to refund
the full amount, but the refund appeared a few weeks later at a
different exchange rate, so I lost out in GBP. What party, if any, is
responsible for the difference?
(Since the airline screwed up, I don't see why I should be out of
pocket on a full refund; but the difference is not large.)
Nightjar <"cpb"@
> I paid airline baggage charges in foreign currency on a UK credit
> card. The bags were delivered late and the airline agreed to refund
> the full amount, but the refund appeared a few weeks later at a
> different exchange rate, so I lost out in GBP. What party, if any, is
> responsible for the difference?
The speculators who cause fluctations in the money market.
However, if your question was really intended to be 'who can I claim the
difference from, the answer is nobody'. You paid in a foreign currency
and were repaid in full in that currency.
Colin Bignell
tim....
"Nightjar <"cpb"@ @giganews.com>" <"insertmysurnamehere> wrote in message
news:8MWdnX2Qw6nlUSjR...@giganews.com...
I don't agree.
The CC company are the ones that decide on the exchange rate and when they
refund a foreign payment they are in effect rescinding a decision to "buy"
foreign currency. So there is no need for them to use today's exchange rate
for that transaction, they can use the same ones as before without suffering
any loss.
tim
Percy Picacity
news:8hm6pv...@mid.individual.net:
But the credit card company are not "refunding" any money. They may
be reversing a charge the airline has made, and they may therefore
refund the fees the airline has paid them. But in both transactions
they are merely carrying out the transaction, including the exchange
transaction, on behalf of their clients, and there are no obvious
reasons why they should subsidise their clients.
--
Percy Picacity
Roland Perry
on Wed, 13 Oct 2010, "Nightjar <\"cpb\"@"
<"insertmysurnamehere>"@giganews.com> remarked:
I disagree. A refund should be of the amount in GBP (exactly reversing
the earlier transaction). I recently had a very similar issue - trader
in US accepted an order which passed all the Credit Card security tests,
then got cold feet and decided not to ship; gave me a refund of the
dollars but it came through 5% short in pounds.
The base exchange rate hadn't changed that much[1], it has to be the
difference between buy & sell rates. I queried it with the CC and the
sent me the "missing" money (all 5%).
[1] Interbank went from about 1.54 to 1.58 which is only 2.5%
--
Roland Perry
Peter Crosland
"Adam Funk" <a24...@ducksburg.com> wrote in message
news:m2rgo7x...@news.ducksburg.com...
You paid in a particular currency and received a refund of the same amount.
It is just unfortunate that the GBP has fallen against the currency during
the period between purchase and refund. Not really any party's fault. Would
you be paying back any gain if the currency movement had been in your
favour?
Peter Crosland
Roland Perry
Wed, 13 Oct 2010, Anthony R. Gold <not-fo...@ahjg.co.uk> remarked:
>> I disagree. A refund should be of the amount in GBP (exactly reversing
>> the earlier transaction). I recently had a very similar issue - trader
>> in US accepted an order which passed all the Credit Card security tests,
>> then got cold feet and decided not to ship; gave me a refund of the
>> dollars but it came through 5% short in pounds.
>>
>> The base exchange rate hadn't changed that much[1], it has to be the
>> difference between buy & sell rates. I queried it with the CC and the
>> sent me the "missing" money (all 5%).
>
>Was your contract with the supplier denominated in dollars or in sterling?
It was dollars. The vendor had promised shipment within 3 days, but took
a week to decide to "un-accept" the order. Of course, under old
understandings in the UK, he should not have charged the card until the
goods were shipped!
Putting a reserve against the amount (only $200) on the card, while
deciding to ship or not, would be acceptable (apart from the issue of
going back on the deal to sell to me at all); but charging me and then
getting cold feet a week later having still not shipped, then taking
three weeks to process the refund, strikes me as very poor practice.
If they'd refunded the day of the order, the exchange rate would not
have changed much (although I'm convinced half the deficit was as a
result of refunding dollars rather then annulling the original
transaction).
--
Roland Perry
Roland Perry
>> It is just unfortunate that the GBP has fallen against the currency during
>> the period between purchase and refund.
>
So, like my case, perhaps the difference was also due to the spread
between buy/sell rates of exchange?
--
Roland Perry
Adam Funk
I'd be willing to do so, and I'd be happy for the refund to be
converted at the same rate even the GBP had fallen in the meantime.
But as far as I can recall, this is the first time I've had a CC
refund transaction in a different currency from the card account.
Adam Funk
> I disagree. A refund should be of the amount in GBP (exactly reversing
> the earlier transaction). I recently had a very similar issue - trader
> in US accepted an order which passed all the Credit Card security tests,
> then got cold feet and decided not to ship; gave me a refund of the
> dollars but it came through 5% short in pounds.
>
> The base exchange rate hadn't changed that much[1], it has to be the
> difference between buy & sell rates. I queried it with the CC and the
> sent me the "missing" money (all 5%).
>
> [1] Interbank went from about 1.54 to 1.58 which is only 2.5%
Aha, that might explain it. Looking at the transaction history on the
account, I see exchange rates over a week going 1.611, 1.616, 1.605,
then down to 1.588 and 1.575 (the rate used for the charges); then
1.629 for the refund a few days later. Switching buy & sell rates
that way strikes me as sharp practice, so I'll raise it with the card
issuer. Thanks.
Nightjar <"cpb"@
> In message <8MWdnX2Qw6nlUSjR...@giganews.com>, at 16:15:03
> on Wed, 13 Oct 2010, "Nightjar <\"cpb\"@"
> <"insertmysurnamehere>"@giganews.com> remarked:
>>> I paid airline baggage charges in foreign currency on a UK credit
>>> card. The bags were delivered late and the airline agreed to refund
>>> the full amount, but the refund appeared a few weeks later at a
>>> different exchange rate, so I lost out in GBP. What party, if any, is
>>> responsible for the difference?
>>
>> The speculators who cause fluctations in the money market.
>>
>> However, if your question was really intended to be 'who can I claim
>> the difference from, the answer is nobody'. You paid in a foreign
>> currency and were repaid in full in that currency.
>
> I disagree. A refund should be of the amount in GBP (exactly reversing
> the earlier transaction).
The earlier transaction was exactly reversed, in the original currency.
I fail to see why you think that the GBP amount should have anything to
do with a refund of a transaction that happened in a foreign country in
the currency of that country.
The card may be issued by a financial intitution in the Sterling area,
but the transaction would have been handled wholly by an entirely
different financial institution in the foreign country, who simply
passed the amounts in their currency, via whatever organisation that has
its brand on the card (e.g. VISA or MasterCard) to the card issuer in
the UK. Which of those do you think should subsidise changes in the
exchange rates?
> I recently had a very similar issue - trader
> in US accepted an order which passed all the Credit Card security tests,
> then got cold feet and decided not to ship; gave me a refund of the
> dollars but it came through 5% short in pounds.
>
> The base exchange rate hadn't changed that much[1], it has to be the
> difference between buy & sell rates. I queried it with the CC and the
> sent me the "missing" money (all 5%).
>
> [1] Interbank went from about 1.54 to 1.58 which is only 2.5%
I suggest that you were the lucky recipient of a goodwill payment by
your card issuer.
Colin Bignell
Nightjar <"cpb"@
Who do you mean by 'the CC company'? There are three organisations
involved - the organisation whose brand appears on the card (e.g. VISA)
that acts as an agent for tranferring money between different financial
institions in different countires, there is the finacial institution
that issued the card to the holder and there is the financial
institution that handles card for the airline.
Colin Bignell
Graham Murray
>
> The earlier transaction was exactly reversed, in the original
> currency. I fail to see why you think that the GBP amount should have
> anything to do with a refund of a transaction that happened in a
> foreign country in the currency of that country.
Because there is an expectation that reversing a transaction will leave
*both* parties in the same state as they were in had the transaction
never happened.
Roland Perry
on Thu, 14 Oct 2010, "Nightjar <\"cpb\"@"
<"insertmysurnamehere>"@giganews.com> remarked:
>>>> I paid airline baggage charges in foreign currency on a UK credit
>>>> card. The bags were delivered late and the airline agreed to refund
>>>> the full amount, but the refund appeared a few weeks later at a
>>>> different exchange rate, so I lost out in GBP. What party, if any, is
>>>> responsible for the difference?
>>>
>>> The speculators who cause fluctations in the money market.
>>>
>>> However, if your question was really intended to be 'who can I claim
>>> the difference from, the answer is nobody'. You paid in a foreign
>>> currency and were repaid in full in that currency.
>>
>> I disagree. A refund should be of the amount in GBP (exactly reversing
>> the earlier transaction).
>
>The earlier transaction was exactly reversed, in the original currency.
>I fail to see why you think that the GBP amount should have anything to
>do with a refund of a transaction that happened in a foreign country in
>the currency of that country.
Because if a transaction is reversed ("annulled") then none of the
parties are out of pocket - other than the administrative costs.
>> I recently had a very similar issue - trader
>> in US accepted an order which passed all the Credit Card security tests,
>> then got cold feet and decided not to ship; gave me a refund of the
>> dollars but it came through 5% short in pounds.
>>
>> The base exchange rate hadn't changed that much[1], it has to be the
>> difference between buy & sell rates. I queried it with the CC and the
>> sent me the "missing" money (all 5%).
>>
>> [1] Interbank went from about 1.54 to 1.58 which is only 2.5%
>
>I suggest that you were the lucky recipient of a goodwill payment by
>your card issuer.
Not if you consider the fact they should never have charged my card in
the first place, before shipping. Or in this case before even deciding
if they would ship (that's a person deciding, of course; their website
had already decided they would, after much form-filling, but a person
then overruled it).
--
Roland Perry
Nightjar <"cpb"@
> In message <YPGdnUwSm-QCnCrR...@giganews.com>, at 14:15:03
> on Thu, 14 Oct 2010, "Nightjar <\"cpb\"@"
> <"insertmysurnamehere>"@giganews.com> remarked:
>
>>>>> I paid airline baggage charges in foreign currency on a UK credit
>>>>> card. The bags were delivered late and the airline agreed to refund
>>>>> the full amount, but the refund appeared a few weeks later at a
>>>>> different exchange rate, so I lost out in GBP. What party, if any, is
>>>>> responsible for the difference?
>>>>
>>>> The speculators who cause fluctations in the money market.
>>>>
>>>> However, if your question was really intended to be 'who can I claim
>>>> the difference from, the answer is nobody'. You paid in a foreign
>>>> currency and were repaid in full in that currency.
>>>
>>> I disagree. A refund should be of the amount in GBP (exactly reversing
>>> the earlier transaction).
>>
>> The earlier transaction was exactly reversed, in the original
>> currency. I fail to see why you think that the GBP amount should have
>> anything to do with a refund of a transaction that happened in a
>> foreign country in the currency of that country.
>
> Because if a transaction is reversed ("annulled") then none of the
> parties are out of pocket - other than the administrative costs.
Which is the case, if you work in the currency in which the original
payment was made.
Colin Bignell
Nightjar <"cpb"@
Which is obviously impossible when the two parties are using different
currencies and variable exchange rates are involved. Would you expect
the OP to refund the difference if the exchange rates had moved in the
opposite direction?
Colin Bignell
Roland Perry
>>> currency. I fail to see why you think that the GBP amount should have
>>> anything to do with a refund of a transaction that happened in a
>>> foreign country in the currency of that country.
>>
>> Because if a transaction is reversed ("annulled") then none of the
>> parties are out of pocket - other than the administrative costs.
>
>Which is the case, if you work in the currency in which the original
>payment was made.
I can't work out if you are agreeing or disagreeing.
--
Roland Perry
Graham Murray
What I would expect is that if the seller charged $X to the card and
this resulted in £Y being deducted from the buyer's account that when
the transaction was reversed that the seller's account would have $X
deducted and the buyer's account have £Y added.
Nightjar <"cpb"@
If the exchange rate changes between those two events, someone is going
to have to pay the difference to achieve that. Who do you think that
should be?
Colin Bignell
Adrian
like they were saying:
>>> Because there is an expectation that reversing a transaction will
>>> leave *both* parties in the same state as they were in had the
>>> transaction never happened.
>> Which is obviously impossible when the two parties are using different
>> currencies and variable exchange rates are involved. Would you expect
>> the OP to refund the difference if the exchange rates had moved in the
>> opposite direction?
> What I would expect is that if the seller charged $X to the card and
> this resulted in £Y being deducted from the buyer's account that when
> the transaction was reversed that the seller's account would have $X
> deducted and the buyer's account have £Y added.
The seller receives $x. The seller refunds $x.
The whole "currency £y" thing is the buyer's risk. The seller has no way
of knowing from a credit card number what currency - or even country -
the card account is in.
If the exchange rate changes, it is impossible for "*both* parties" to be
left in the "same state". It cannot happen. Unless the card issuer
absorbs the difference - is that what you're suggesting?
Stuart A. Bronstein
> If the exchange rate changes between those two events, someone
> is going to have to pay the difference to achieve that. Who do
> you think that should be?
The sell rate is generally higher than the buy rate, so it doesn't
really matter if the general rates changed the two transactions.
Who gets that differential between the sell and buy prices? Most
likely the bank, not either the seller or buyer.
Roland Perry
14 Oct 2010, Graham Murray <news...@gmurray.org.uk> remarked:
>What I would expect is that if the seller charged $X to the card and
>this resulted in £Y being deducted from the buyer's account that when
>the transaction was reversed that the seller's account would have $X
>deducted and the buyer's account have £Y added.
And in cases like my own refund, this will all happen long before my
bank actually has to find[1] any dollars to send to the vendor's bank;
so they just nullify that future requirement when they nullify the two
book-entries.
[1] Which they won't necessarily buy on the markets, they could just as
easily be contra'd against a flow in the opposite direction between a
USA buyer and a UK merchant.
--
Roland Perry
Roland Perry
on Fri, 15 Oct 2010, "Nightjar <\"cpb\"@"
<"insertmysurnamehere>"@giganews.com> remarked:
>> What I would expect is that if the seller charged $X to the card and
>> this resulted in £Y being deducted from the buyer's account that when
>> the transaction was reversed that the seller's account would have $X
>> deducted and the buyer's account have £Y added.
>
>If the exchange rate changes between those two events, someone is going
>to have to pay the difference to achieve that. Who do you think that
>should be?
No-one, because the dollars weren't "bought" on the day that the retail
sale was made. That's just a convenient fiction to be able to print
something on your statement.
You bank will have several weeks to decide where to "obtain" the
dollars, and has an international treasury department which will be
exchanging money when they think the rate is most in their (the bank's)
favour; quite irrespective of what they told you. That's one of the ways
they make more profits.
In practice it's quite likely they won't even exchange any money,
because the bank will have dollars flowing towards it from transactions
made by overseas buyers, and it can turn some of them round to pay
overseas sellers.
--
Roland Perry
Roland Perry
2010, Adrian <tooma...@gmail.com> remarked:
>If the exchange rate changes, it is impossible for "*both* parties" to be
>left in the "same state". It cannot happen. Unless the card issuer
>absorbs the difference - is that what you're suggesting?
You are assuming that the banks go to a money-changer every time someone
makes a foreign purchase. It's not like that. They just chalk up a debt
to be paid at some relatively indeterminate point in the future. They
may even *borrow* the foreign currency, rather than *buy* it, if they
think that's going to make them more profit.
The upshot of all this is that they can simply "unchalk" the transaction
later, and everyone is exactly where they were before.
--
Roland Perry
Adrian
were saying:
>>If the exchange rate changes, it is impossible for "*both* parties" to
>>be left in the "same state". It cannot happen. Unless the card issuer
>>absorbs the difference - is that what you're suggesting?
> You are assuming that the banks go to a money-changer every time someone
> makes a foreign purchase. It's not like that. They just chalk up a debt
> to be paid at some relatively indeterminate point in the future. They
> may even *borrow* the foreign currency, rather than *buy* it, if they
> think that's going to make them more profit.
>
> The upshot of all this is that they can simply "unchalk" the transaction
> later, and everyone is exactly where they were before.
No, they can't. It'd run a very high risk of causing all sorts of
accounting and regulatory chaos.
Mark Goodge
and typed:
Yes, if there was a single transaction and it was reversed. However, that's
not how a refund works. If you pay by card and later get a refund back to
the card, that's two separate transactions (for which, incidentally, the
retailer pays two separate transaction fees), one in each direction.
This is an important distinction which needs to be borne in mind. If you
pay for something by card, but then get the card company to do a chargeback
for whatever reason, then that's a single transaction which is reversed and
the amount coming back in will always be indentical to the amount which
went out. But if you pay for something and then the seller refunds you, the
original transaction remains in place and a second transaction in the
opposite direction takes place. After all, the refund may not even be for
the same amount as the original payment (if, for example, you bought two
items but only one was faulty and hence only one was returned for a
refund). So the refund is a separate transaction, which can be of whatever
amount the retailer gives you (for that matter, it can even be *more* than
you originally paid - since it's a separate transaction, it isn't linked in
any way to the original and hence can be for any value whatsoever).
If both buyer and seller are using the same currencies, that distinction
isn't important, because the values will always be the same to both. But if
they're not, then the exchange rate on the second transaction may be
different to the first. In which case, the buyer will either get slightly
less or slightly more bck than they spent. But that's not the retailer's
problem. The customer paid him (say) $100, he refunded $100. The fact that
$100 now buys slightly more or slightly less GPB than it did a week ago is
none of his concern.
Mark
--
Blog: http://mark.goodge.co.uk
Stuff: http://www.good-stuff.co.uk
Roland Perry
2010, Adrian <tooma...@gmail.com> remarked:
>> The upshot of all this is that they can simply "unchalk" the transaction
>> later, and everyone is exactly where they were before.
>
>No, they can't. It'd run a very high risk of causing all sorts of
>accounting and regulatory chaos.
Please explain why you think that (what are in effect) credit notes
cause that.
--
Roland Perry
tim....
----------------------------------------------------------------------
But they aren't
No money will have changed hands. All that the CC company are doing is
reversing a prior transaction in the period before they have actually handed
over any money, so why shouldn't they reverse the transaction at the same
rate?
(I accept that the trader will have some admin fees to pay but this
shouldn't be affected by the currency rate)
tim
Tim Jackson
> If both buyer and seller are using the same currencies, that distinction
> isn't important, because the values will always be the same to both. But if
> they're not, then the exchange rate on the second transaction may be
> different to the first. In which case, the buyer will either get slightly
> less or slightly more bck than they spent. But that's not the retailer's
> problem. The customer paid him (say) $100, he refunded $100. The fact that
> $100 now buys slightly more or slightly less GPB than it did a week ago is
> none of his concern.
I would agree if the refund took place merely because the customer
decided he didn't like what he'd bought and sent it back. In that case,
the buyer should take the currency risk.
However, the situation is different if the goods were faulty. Then it
*is* the retailer's problem. He should pay what it takes to make the
buyer whole. Since the buyer is having to bear the currency loss, the
retailer should pay that back to him. It's part of the compensation he
is owed.
In the case of the OP, however, the situation is slightly different
again. The airline was at fault - they lost the OP's baggage. But he
did get it back eventually; it was just late.
It's then a question of what is reasonable compensation for the
inconvenience, and the cost of replacing items that were needed urgently
(if any). It might however be subject to a statutory or contractual
limitation.
Since it presumably isn't worth going to court, that's a matter for
negotiation between the OP and the airline. It's not really related to
the actual baggage charge paid, with or without the currency loss.
Reasonable compensation might be more or less than that, depending on
the circumstances.
Obviously the airline's starting position is just to reimburse the
original charge, in the original currency. If the OP wants more than
that, then the argument should be about how much inconvenience he's
suffered, rather than the currency loss.
--
Tim Jackson
ne...@timjackson.invalid
(Change '.invalid' to '.plus.com' to reply direct)
Mark Goodge
typed:
>On Fri, 15 Oct 2010 07:35:03 +0100, Mark Goodge wrote...
>> If both buyer and seller are using the same currencies, that distinction
>> isn't important, because the values will always be the same to both. But if
>> they're not, then the exchange rate on the second transaction may be
>> different to the first. In which case, the buyer will either get slightly
>> less or slightly more bck than they spent. But that's not the retailer's
>> problem. The customer paid him (say) $100, he refunded $100. The fact that
>> $100 now buys slightly more or slightly less GPB than it did a week ago is
>> none of his concern.
>
>I would agree if the refund took place merely because the customer
>decided he didn't like what he'd bought and sent it back. In that case,
>the buyer should take the currency risk.
>
>However, the situation is different if the goods were faulty. Then it
>*is* the retailer's problem. He should pay what it takes to make the
>buyer whole. Since the buyer is having to bear the currency loss, the
>retailer should pay that back to him. It's part of the compensation he
>is owed.
The retailer owes what he was paid. Nothing more, nothing less. If the
customer chooses to take that repayment and convert it to another curency,
that's his choice. But the transaction between the customer and the
retailer took place in the retailer's currency, and that's the currency
which matters when it comes to determining who is owed what.
Tim Jackson
> On Fri, 15 Oct 2010 21:30:02 +0100, Tim Jackson put finger to keyboard and
> typed:
> >
> >*is* the retailer's problem. He should pay what it takes to make the
> >buyer whole. Since the buyer is having to bear the currency loss, the
> >retailer should pay that back to him. It's part of the compensation he
> >is owed.
>
> The retailer owes what he was paid. Nothing more, nothing less. If the
> customer chooses to take that repayment and convert it to another curency,
> that's his choice.
Not necessarily. For example, forgetting currency issues for a minute,
if a retailer contracts to sell you an item in good working order for
�100, and is unable to do so, then you are entitled to claim the cost of
getting that item elsewhere. Even if it costs �110 elsewhere.
Of course, you have to mitigate your loss. If there are two equally
good alternative sources, you have to take the cheapest.
In real life, of course, the retailer will resist paying out any more
than the original �100, and it might not be worth the hassle of pursuing
more. But you are entitled to.
Similarly, if you have work done on your house by a builder, and then
discover after you've paid for it that the work was unsatisfactory, then
you are entitled to have it put right. If the builder can't or won't do
so, then you are entitled to have the work done by someone else and to
sue him for the extra cost.
Roland Perry
22:25:02 on Fri, 15 Oct 2010, Mark Goodge
<use...@listmail.good-stuff.co.uk> remarked:
>The retailer owes what he was paid. Nothing more, nothing less. If the
>customer chooses to take that repayment and convert it to another curency,
>that's his choice. But the transaction between the customer and the
>retailer took place in the retailer's currency, and that's the currency
>which matters when it comes to determining who is owed what.
But in my case the retailer changed his mind about shipping the item at
all. After accepting the order. Now, I realise I can't realistically sue
for the extra costs of buying the item elsewhere (especially as this
supplier was the highest priced vendor I found), but I can expect to
receive all my money back.
--
Roland Perry
Mark Goodge
typed:
>On Fri, 15 Oct 2010 22:25:02 +0100, Mark Goodge wrote...
>> On Fri, 15 Oct 2010 21:30:02 +0100, Tim Jackson put finger to keyboard and
>> typed:
>> >
>> >However, the situation is different if the goods were faulty. Then it
>> >*is* the retailer's problem. He should pay what it takes to make the
>> >buyer whole. Since the buyer is having to bear the currency loss, the
>> >retailer should pay that back to him. It's part of the compensation he
>> >is owed.
>>
>> The retailer owes what he was paid. Nothing more, nothing less. If the
>> customer chooses to take that repayment and convert it to another curency,
>> that's his choice.
>
>Not necessarily. For example, forgetting currency issues for a minute,
>if a retailer contracts to sell you an item in good working order for
>£100, and is unable to do so, then you are entitled to claim the cost of
>getting that item elsewhere. Even if it costs £110 elsewhere.
Yes, but that doesn't actually change my main point. There are
circumstances in which the retailer can be liable for damages as well as a
refund, but, even so, the amount he owes is whatever the amount actually
is, in the currency in which the damages are awarded. So if he owes $110,
then he pays $110. Again, if the customer chooses to convert that amount
into another currency then that's entirely his choice.
S
wrote:
In this case the retailer decided to back out of the transaction after
taking the payment, so presumably by then a contract has been formed,
so he should refund the customer's loss.
Would you be happy if you ordered something from Zimbabwe, the
merchant charged your card, a week later changed his mind and refunded
the billion Zimbabwean dollars you paid, which by then were only worth
10% of their original value in pounds?
Mark Goodge
typed:
>In message <08hhb69h15gb253uq...@news.markshouse.net>, at
You can indeed expect to receive all the money back that the retailer
originally received from you, in the currency in which you paid it.
Tim Jackson
> Yes, but that doesn't actually change my main point. There are
> circumstances in which the retailer can be liable for damages as well as a
> refund, but, even so, the amount he owes is whatever the amount actually
> is, in the currency in which the damages are awarded. So if he owes $110,
> then he pays $110. Again, if the customer chooses to convert that amount
> into another currency then that's entirely his choice.
The retailer is at fault if he delivers faulty goods. Therefore what is
owed is indeed damages, and not merely a refund.
Damages means that the retailer should pay the amount by which the
customer has been damaged. And the customer has been damaged by the
exchange rate loss.
Mark Goodge
>On Oct 15, 10:25 pm, Mark Goodge <use...@listmail.good-stuff.co.uk>
>wrote:
>>
>> The retailer owes what he was paid. Nothing more, nothing less. If the
>> customer chooses to take that repayment and convert it to another curency,
>> that's his choice. But the transaction between the customer and the
>> retailer took place in the retailer's currency, and that's the currency
>> which matters when it comes to determining who is owed what.
>
>In this case the retailer decided to back out of the transaction after
>taking the payment, so presumably by then a contract has been formed,
>so he should refund the customer's loss.
The customer's loss is what he paid the retailer. And that payment is
measured in the currency in which the transaction took place.
Let me suggest a different situation, which is in some ways analogous to
the one under discussion. Suppose I have some money in a long-term savings
account - the type which penalises you for early withdrawal - and I see
offered for sale an item that I want so much that I think it's worth losing
the interest to obtain. So I withdraw the money from my account, at the
cost of a month's interest, and go and buy the item.
Unfortunately, a week after I buy it, it becomes clear that it isn't
working properly and return it to the retailer. The retailer is most
apologetic, but, as the item is a one-off, there is no possibility of
replacing it and the fault is one which is not amenable to repair. So,
instead, he gives me a full refund.
Now, from the retailer's perspective, we are both back in the situation we
were before (except that he now has an unsalable item on his hands, of
course) - I've got my money back, and he no longer has it. But I have lost
out overall, because even if I out that money back into my savings account,
I won't get back the lost interest.
In such a scenario, does the retailer owe me the lost interest?
Alternatively, consider the situation where I want to buy something, don't
have any cash on me, can't pay by card and the only ATM available is one
which charges for withdrawals. So I withdraw teh cash and pay the fee in
order to be able to buy the item. But, again, it's faulty so I take it back
and the retailer refunds me. Is he also liable to reimburse me for the ATM
transaction fee?
In both cases, I think it's pretty clear that the answer is "no". And the
same applies to a cross-currency transaction. The actual transaction, and
the contract, takes place in the currency in which the retailer operates.
By choosing to buy the item in a way which requires me to exchange some of
my currency for that of his country, I am accepting the costs and risks of
the currency conversion. If the purchase fails to work out as I had
intended, I can't recoup those costs from the retailer.
>Would you be happy if you ordered something from Zimbabwe, the
>merchant charged your card, a week later changed his mind and refunded
>the billion Zimbabwean dollars you paid, which by then were only worth
>10% of their original value in pounds?
No, I wouldn't be happy. I'd be utterly livid. But I'd mostly be annoyed
with myself for being such a fool. I wouldn't be under the impression that
I was owed anything other than the sum I paid in Zimbabwean dollars.
Stuart A. Bronstein
> Damages means that the retailer should pay the amount by which
> the customer has been damaged. And the customer has been
> damaged by the exchange rate loss.
Don't non-tort damages have to be forseeable? Let's say you walk
into a shop in Germany and buy something (with Euros) that turns out
to be defective. You take it back and get a refund. When converting
your Euros back to Pounds you get a bit less than you paid due either
to conversion costs or a different exchange rate.
Is that shop owner responsible for your loss on the money exchange?
Tim Jackson
> Let me suggest a different situation, which is in some ways analogous to
> the one under discussion. Suppose I have some money in a long-term savings
> account - the type which penalises you for early withdrawal - and I see
> offered for sale an item that I want so much that I think it's worth losing
> the interest to obtain. So I withdraw the money from my account, at the
> cost of a month's interest, and go and buy the item.
>
> Unfortunately, a week after I buy it, it becomes clear that it isn't
> working properly and return it to the retailer. The retailer is most
> apologetic, but, as the item is a one-off, there is no possibility of
> replacing it and the fault is one which is not amenable to repair. So,
> instead, he gives me a full refund.
>
> Now, from the retailer's perspective, we are both back in the situation we
> were before (except that he now has an unsalable item on his hands, of
> course) - I've got my money back, and he no longer has it. But I have lost
> out overall, because even if I out that money back into my savings account,
> I won't get back the lost interest.
>
> In such a scenario, does the retailer owe me the lost interest?
I think Stuart Bronstein may have put his finger on the difference. In
your scenario, your loss of interest is not foreseeable by the retailer.
In the situations described by Adam (the OP) and Roland, the currency
loss was foreseeable, because the airline and the US trader could see
that they were dealing with a customer from another country.
Tim Jackson
> Don't non-tort damages have to be forseeable? Let's say you walk
> into a shop in Germany and buy something (with Euros) that turns out
> to be defective. You take it back and get a refund. When converting
> your Euros back to Pounds you get a bit less than you paid due either
> to conversion costs or a different exchange rate.
>
> Is that shop owner responsible for your loss on the money exchange?
Your argument is that that's not foreseeable. But now consider the
situation where the German retailer advertises the goods on the Internet
in euros, quoting a price for p&p to the UK, and happily accepts an
order for delivery to a UK address. Can he not foresee that the
customer will be exchanging pounds for euros, and risks a currency loss
if the goods are faulty and have to be refunded?
Likewise, is the currency risk not foreseeable in Roland's case, where a
US trader changed his mind and refused to ship the goods to the UK after
he'd taken the money for them?
And is it not foreseeable in the OP's case, where the airline made a
baggage charge when taking a UK customer back to the UK, and was paid
with a UK credit card?
Stuart A. Bronstein
>> And is it not foreseeable in the OP's case, where the airline
>> made a baggage charge when taking a UK customer back to the UK,
>> and was paid with a UK credit card?
>
> But it is not only "risk"; that supplier can also see an almost
> equal probability that rate changes will bring the frustrated
> buyer a gain. To believe that there is a net probability of loss
> is to be bullish on the future strength of sterling.
True, except for the fact that in currency transactions there is a
spread between the purchase and the sell price. Even if there had
been no change in the exchange rate, purchasing a currency and then
selling back exactly what you received will result in you ending up
with less money.
Whether that loss is forseeable in any specific case will depend on
the facts of that situation. However if the seller knows that the
buyer has to purchase local currency before the transaction can go
forward, it seems reasonable for him to understand that there might
be some loss on the currency transaction if the sale does not take
place.
Stuart A. Bronstein
> As I just wrote elsewhere in this thread, while there is a
> foreseeability of a change in exchange rates that does not
> necessarily imply loss to the buyer.
No, but it's forseeable that there might be a loss.
Chris R
news:gs2ob6hp8cktg1667...@4ax.com...
> particular currency and I believe that a party who performs under such a
> contract while using resources denominated in another currency must be
> willing to accept the risks of both exchange rates and exchange fees.
>
True if the contract is performed, but not necessarily if the other party
then breaches the contract.
Chris R
John Briggs
> On Mon, 18 Oct 2010 09:10:14 +0100, "Stuart A. Bronstein"
> <spam...@lexregia.com> wrote:
>> "Anthony R. Gold"<not-fo...@ahjg.co.uk> wrote:
>>
>>> As I just wrote elsewhere in this thread, while there is a
>>> foreseeability of a change in exchange rates that does not
>>> necessarily imply loss to the buyer.
>>
>> No, but it's forseeable that there might be a loss.
>
> arrangement places all of the risks and the costs of exchange conversion in
> either direction on buyers who are using resources denominated in any other
> currency.
Obviously not, or Roland's seller wouldn't have got cold feet about the
transaction. But it was unacceptable for the seller to cancel the
transaction after taking payment.
--
John Briggs
Tim Jackson
> >
> >> As I just wrote elsewhere in this thread, while there is a
> >> foreseeability of a change in exchange rates that does not
> >> necessarily imply loss to the buyer.
> >
> > No, but it's forseeable that there might be a loss.
>
> arrangement places all of the risks and the costs of exchange conversion in
> either direction on buyers who are using resources denominated in any other
> currency.
Even if the US trader is in breach of contract?
Suppose the US trader simply banks your money and fails to send the
goods. Obviously you can sue him. If it is significant, it would be
common to include a claim for loss of interest on the money prior to
judgment (at some reasonable interest rate). Why not also for any
currency loss?
Adam Funk
> I think Stuart Bronstein may have put his finger on the difference. In
> your scenario, your loss of interest is not foreseeable by the retailer.
> In the situations described by Adam (the OP) and Roland, the currency
> loss was foreseeable, because the airline and the US trader could see
> that they were dealing with a customer from another country.
I was about to concede that the merchant is only aware of the credit
card's foreignness if the system is set up to detect it ... but then I
remembered that in some places this is now detected and used to push
dynamic currency conversion --- to the detriment of the consumer.
9: Never opt for "dynamic currency conversion"
This is the fastest-growing rip-off of British holidaymakers. Shops
will let you pay in sterling rather than local currency, but the
currency conversion rate used will be lousy and it will cost you
1%-5% more. The same goes for cash machines, which will offer
"press yes for GBP, no for EUR". Holidaymakers should just press
"no".
http://www.guardian.co.uk/money/2009/feb/28/saving-money-travel-holidays-budget
Roland Perry
Oct 2010, John Briggs <john.b...@ntlworld.com> remarked:
>>>> As I just wrote elsewhere in this thread, while there is a
>>>> foreseeability of a change in exchange rates that does not
>>>> necessarily imply loss to the buyer.
>>>
>>> No, but it's forseeable that there might be a loss.
>>
>> Not to someone in the USA who is quoting their prices in USD. AFAIAC that
>> arrangement places all of the risks and the costs of exchange conversion in
>> either direction on buyers who are using resources denominated in any other
>> currency.
>
>Obviously not, or Roland's seller wouldn't have got cold feet about the
>transaction. But it was unacceptable for the seller to cancel the
>transaction after taking payment.
They admitted that their system was less-than-perfect because of the way
it allowed entry of an 'unacceptable' International address, but I agree
that it's also wrong to charge the card (rather than pre-authorise, for
charging later) if there's a possibility of discovering later you were
out of stock [1] or that you weren't going to be happy to complete the
order.
[1] which happened for other UK-based vendors who had accepted orders
for the same item.
--
Roland Perry
Roland Perry
Oct 2010, Adam Funk <a24...@ducksburg.com> remarked:
> 9: Never opt for "dynamic currency conversion"
> This is the fastest-growing rip-off of British holidaymakers. Shops
> will let you pay in sterling rather than local currency, but the
> currency conversion rate used will be lousy and it will cost you
> 1%-5% more. The same goes for cash machines, which will offer
> "press yes for GBP, no for EUR". Holidaymakers should just press
> "no".
On the other hand, if you are buying something on expenses and want to
know how much to put on the claim form, it's more convenient to get a
receipt in Sterling (or even Euros) than some unknown foreign currency,
especially when you won't be getting your Credit Card bill until after
you need to have submitted the claim.
--
Roland Perry
Adam Funk
I can see that, but I prefer to get a good deal when my employer is
paying too ;-) and I can check my credit card on-line.
Roland Perry
>>> 9: Never opt for "dynamic currency conversion"
>>> This is the fastest-growing rip-off of British holidaymakers. Shops
>>> will let you pay in sterling rather than local currency, but the
>>> currency conversion rate used will be lousy and it will cost you
>>> 1%-5% more. The same goes for cash machines, which will offer
>>> "press yes for GBP, no for EUR". Holidaymakers should just press
>>> "no".
>>
>> On the other hand, if you are buying something on expenses and want to
>> know how much to put on the claim form, it's more convenient to get a
>> receipt in Sterling (or even Euros) than some unknown foreign currency,
>> especially when you won't be getting your Credit Card bill until after
>> you need to have submitted the claim.
>
>I can see that, but I prefer to get a good deal when my employer is
>paying too ;-)
For the few pounds involved, it'd cost them more at my hourly rate to be
faffing around.
>and I can check my credit card on-line.
So can I (for some, anyway); but they'd want a printout, which means
taking a hard copy, redacting the other items... more faffing around.
--
Roland Perry
dhild...@gmail.com
> I paid airline baggage charges in foreign currency on a UK credit
> card. The bags were delivered late and the airline agreed to refund
> the full amount, but the refund appeared a few weeks later at a
> different exchange rate, so I lost out in GBP. What party, if any, is
> responsible for the difference?
>
> (Since the airline screwed up, I don't see why I should be out of
> pocket on a full refund; but the difference is not large.)
I had an unauthorized (renewal) credit card charge in US$ (I lived in Canada). Called the company and while they provided a refund, it was short due to the exchange rate (charged me $143CDN and I only received $137CDN after the refund). When I questioned them, they (Company that charged my card), suggested I contact my credit card company because I was refunded the amount I was charged on their end. I called my credit card company and they provided the difference. When I asked what would happen if the situation had been reversed; refund greater than amount charged, I was advised that it would have been my lucky day!
Reentrant
>When I asked what would happen if the situation had been reversed; refund greater than amount charged, I was advised that it would have been my lucky day!
--
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