On an average day, an estimated 8 million people fly. Of those millions, a significant portion continue to use the currency exchange booths found at the airport. While some people are conscious of the exorbitant practices of these places and simply decide to bite the bullet, countless others are still unaware. It is for those people that we’ve written this article, on the 4 ways you’re getting scammed at the airport currency exchange.
1. Airport Exchange Rates are TERRIBLE!
In the world of currency exchange, it is just the reality that there exists one rate at which a currency will be bought, and one rate at which it will be sold. The mid-point is the rate you would see were you to do a google search for the conversion rate. While it might seem unfair that this difference, or spread (as it is called), exists, it is the cost of doing business and how banks and currency exchanges cover their costs. For more information on the differences between buy, sell, and mid-rates, we’ve got an FX101 for you!
Still, not all spreads are created equal, and the one you’ll find at the airport exchange kiosk will be far greater than were you to visit your local bank or currency exchange office. Why is this? It’s not because operating costs are so much more considerable in airports than elsewhere. It boils down to the fact that the currency exchange companies realize that in the airport they have a captive clientele, who, having no other option, will be desperate and willing to pay more for foreign cash than they otherwise might have been.
So what does this inflated spread translate to? Well, it means that if you are looking to buy a foreign currency, it will be more expensive. In addition, selling your foreign money upon your return you will get far less back than what you paid for it.
2. Not So “Special” Offers
One of the primary selling tools of the airport exchange booth is the sign extolling the savings on offer and value packs offering deals on the day’s transactions. When considering such offers, however, the consumer should be very cautious. Most of the “savings” promoted are likely produced in comparison to an inflated base rate, and are therefore false. If one were to compare the rate they’d receive at their bank or local currency exchange branch, it would quickly become clear how fabricated such claims actually are.
3. Hiding the Real Exchange Rate
If any readers have recently visited the airport exchange kiosk, and attempted to take a photograph of the rates on offer there, you may well have noticed that the number you saw with your eyes doesn’t correspond to the number captured with your camera. Many companies with exchange kiosks in airports seem to have adopted number scrambling software designed to prevent their rates from being shared. No doubt touted as a security feature, the only possible objective such a function might have is to hinder the spread of knowledge regarding just how exorbitant their rates are in relation to the banks and competing currency exchange companies.
4. Hidden Fees
Were one to inquire at an airport kiosk about whether any extra fees are involved in transactions, they would almost certainly be answered no. While this answer might be correct in a technical sense (if you took a glance at your receipt you would notice a segment for fees with the charge of $0.00), it is also deceitful. While there may be no “fees” charged per se, were you to take a closer look at your receipt you would probably notice another segment designated as “Service Charge(s)”, likely to the sum of $9.95.
By adopting such a practice, these businesses can claim that they have no fees. However a fee is a fee, even if it operates under a different name, and these hidden costs only serve to see more of your money eaten up in your airport exchange transactions.
Stay informed. Stay Current.