Timeline for What costs do banks incur on processing credit card refunds in foreign currency?
Current License: CC BY-SA 4.0
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| Jun 13, 2018 at 0:09 | comment | added | Greendrake | @quid I am not too sure what those "currency exchange costs" are in either direction, hence the question. On purchase, banks sell local currency and buy USD at the Visa/Mastercard rate, on refund they receive USD and sell it back for local currency — again at the payment system's rate (which of course will fluctuate). The process is completely automated so the 1-3% they charge is merely their margin for profit, not actual cost. Apparently most banks make goodwill but performing refunds in such a manner that customer gets back what they paid to the fullest degree possible. Some do not. | |
| Jun 12, 2018 at 23:50 | comment | added | quid | Why would the currency exchange costs only exist in one direction? All of the costs that exist to exchange from NZD to USD would exist to exchange from USD to NZD... I'm actually surprised your other 4 cards don't charge the fee on refunds. | |
| Jun 12, 2018 at 23:20 | answer | added | xirt | timeline score: 1 | |
| Jun 11, 2018 at 8:39 | comment | added | TripeHound | Fair enough, it was just a idea... in the UK, credit-card companies bear partial/joint responsibility with the merchant for fulfilling the transaction, so I could see that it was possible that refunds for different reasons could be treated differently (but having never needed to get a refund, it was, as I say, speculation). | |
| Jun 11, 2018 at 8:34 | comment | added | Greendrake | @TripeHound banks have no idea and have no interest to know why payments are refunded. The described behaviour has been consistent within each bank for many years no matter what the refunds were about. | |
| Jun 11, 2018 at 7:03 | comment | added | TripeHound | Pure speculation: Could it depend on why the refund was made? For Merchant, bank or card-processor error, or if the goods were "unfit" etc., I could believe/hope any charges would be reversed. If you "just changed your mind", I could see them charging an additional transaction fee to send the money back in a different currency than your own. | |
| Jun 11, 2018 at 3:08 | history | edited | Greendrake | CC BY-SA 4.0 |
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| Jun 11, 2018 at 2:33 | history | asked | Greendrake | CC BY-SA 4.0 |