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I recently did a warranty exchange with a $25 service fee:

  • I gave $500 deposit on my VISA card.
  • They shipped the replacement.
  • I returned the old item.
  • They refunded $475 to my VISA card.

which from my point of view means I paid $25.

The complicating factor was that the warranty was with a US company and I was in Canada.

I expected to pay $25 plus the standard 2½% exchange fee, or $25.63. And that is what happened, but I also paid a 2½% fee on the $500 deposit and on the $475 refund.

The result is that instead of the expected 63 cents, I ended up paying $25 in exchange fees on what was effectively a $25 transaction.

Even so, what the company and VISA each did was both obvious and reasonable, so I can't blame either of them. It was my mistake for not thinking about it first.

The company didn't offer any option other than credit card for the deposit.

The question is, what could I have done differently to avoid this reasonable but exorbitant fee?

Note that the above amounts are all in US$, and the situation is independent of what the actual exchange rate was. To make it easy assume the rate was 1:1.

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    This does not seem reasonable. They could have authorized the credit card for $500 and only settled it if you didn't return the item. The authorization would not have cost you anything.
    – GaTechThomas
    Commented Oct 10, 2023 at 14:16

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Seems your simplest path is to find a bank/credit card that doesn't charge you foreign transaction fees. We have these in the US although I assume banks make up for it with a worse exchange rate, so you might end up paying this anyways. I don't know about Canada.

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  • Yes, we did eventually get a no-fee US$ credit card and bank account, which will also be handy when traveling in the US (which of course we haven't done because COVID-19 happened right after we got it).
    – Ray Butterworth
    Commented Oct 10, 2023 at 15:38

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