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View Full Version : Knowledge Base: International Exchange Rates (buying & selling)



mechanicaljen
02-06-2013, 07:26 AM
Probably worth mentioning.

Yesterday, I went to purchase a Western Union international wire transfer. I ran the exchange rate. Yesterday and today... 1 Dollar = 0.74 Euro, according to Google.

The gal behind the counter asks me how much money I'd like to send, in dollars. I needed to send 314 Euros. So...math tells us that 314/.74 = $424.32. So, I asked for $426 to be wired, but in Euros. So, she punched it all in, adding in fees on top of that. All's well right?

I get my receipt. They had wired 299 Euros. Turns out, they had used an exchange rate of 1 Dollar = 0.70 Euro. I tried to explain this to the cashier, and she entirely blanked out.

Since this is for a model purchase. I *needed* to send 314 Euros. But I didn’t necessarily want to pay another fee, to send just a few dollars. Happily, it was hashed out – but using the 0.70 exchange rate.

So, it is my fault for not verifying what exchange rate Western Union was using. Do not count on their rate being the same as what a quick Google search will bring up. But, perhaps this info will help one you folks avoid a time sink.

JoeCool
02-06-2013, 07:45 AM
i'm not sure if it's the same or even relevant but when i use paypal to send a payment internationally - if our exchange rate in australia is $1.04 against the US dollar, then i know i will get only $1.01.

and this can be the same when i use my credit card (not sending a paypal c/c payment but using the card directly) for international purchases, although sometimes the bank will give a slightly better exchange rate compared to paypal who are just totally greedy anyway.

i think the exchange rate depends on whether it's a buy rate or a sell rate. and as we are 'selling' our aussie or usa dollars to buy another country's currency it's classed as a selling rate which is why it's always a few cents under what is advertised as the exchange rate. anyway i'm pretty sure i've got my facts right, if i've made a mistake let me know.

thanks Jackie Siebel:blueflower

Mary
02-06-2013, 08:09 PM
Exactly what JoeCool said. There is a different rate for buying & selling.

And, not every business or shipper is using the same exchange rates. It's like the weather, it can be different in different places at the same time. If you want to see this in action, go to an airport's international area where they have bank kiosks exchanging money. If they have more than one bank, each one may be using a slightly different rate.

It's best to ask what currency and amount you want the other party to receive. If the teller is challenged as the one in this story was, ask what exchange rate they are using to send money to XX, and then calculate. (Account for fees as well.) :)

Really, a teller should be competent to sort this out for you ... but we know what that can be.

mechanicaljen
02-07-2013, 07:00 AM
Yep..I take full responsibility for the snafu. Had conditions been different (different teller/had I had sleep the night before/not coming off a 12 hr shift into a crowded grocery store to purchase a transfer) I probably would have caught it. Thing is? I know better.

Anyhow. I know the majority of folks here will probably never have to deal with this situation. My love of European china, though...sometimes leads me into situations like these ;)