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1937 posts

Uber Geek
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Topic # 60607 28-Apr-2010 21:06
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I haven't placed any Amazon.UK orders for quite some time and when I went in tonight I found that I was offered Amazon's own currency conversion service. Basically here's how it works (as far as I can work out):

Usually you buy from overseas website. The cost of your order is only locked in the website local currency (ie. GBP for Amazon.UK). They may take a day or longer to sort out your order. When your order ships, they charge your CC for the GBP amount. In the mean time the currency rate may have fluctuated - you pay whatever your bank rate is for that day, PLUS a currency conversion fee of between 1% and 3.5% depending on your card issuer.

Amazon now lets NZers be charged in NZD instead, with the following potential advantages:

No fluctuation - the price quoted in your baskets (in NZD) is what you are billed for, in NZD. Ideally you also get no currency conversion fee either, because technically you are billed in NZD, and should not be charged for any foreign currency conversion. However Amazon disclaim that your card issuer MAY still impose fees (not specified what these fees might be).

Has anyone used Amazon's Currency Converter? I am blessed in that I have the cheapest credit card in New Zealand for overseas purchases and only pay 1% or 1.1% (I forget). That's the MasterCard fee - my card issuer is the only one I know of in NZ that doesn't add their own fee to "clip the ticket" (cheers The Warehouse Financial Services).

I'm curious as to whether the Amazon currency conversion rates are less competitive than our local banks, thereby reducing any benefit (and potentially increasing the overall cost).

But then again the rates may in fact be quite low. Does anyone know from experience or care to comment?

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Uber Geek
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  Reply # 324558 29-Apr-2010 09:43
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I never use it and it's always ends up cheaper using my ASB Visa (2.1% margin = 0.85% Visa + 1.25% ASB). Maybe I've always gotten lucky with currency fluctuations, but I suspect that Amazon use less than favourable rates or include a margin at least equal to the bank/CC.

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Ultimate Geek
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  Reply # 324597 29-Apr-2010 10:41
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It stands to reason that any company that is accepting risk, in this case currency fluctuation, that they would offer the most favorable rate for themselves plus a margin of error.

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