You’ve got to spend money to save money

This is the story of how I applied my business savvy in New York City.

The conversation that started it all

On my first day in NYC last year, I had the following exchange with a shop assistant in Sephora*:

SA:  Ma’am, would you like to pay in US dollars or Australian dollars?

Me: (upon seeing that the foreign exchange rate on the credit card machine was 0.9474) Whaaaaaaaaaaaaaaaaaa?  But I just checked xe.com this morning, and it was supposed to be near an all-time high of $0.99!  Hang on, my xe.com iphone app says it’s still at $0.99…?

SA: …Ma’am?

Me: I’ll pay in US dollars, please.

* this retelling has possibly, potentially, may have been a tiny bit embellished for dramatic purposes.  Maybe.

I also still can’t believe they kept calling me “ma’am”.

When you spend money, others make money too 

Obviously.  But what I discovered in that Sephora store is that someone else in the complicated credit card web — merchant, credit card network/processor, bank, whoever — was trying to get just that little bit extra from me through their foreign exchange shenanigans.  And so were all the other stores I visited, because shop assistant after shop assistant offered me terrible exchange rates (but otherwise excellent service).

Having armed myself with xe.com for up-to-date information and my trusty 28 Degrees credit card for optimal (international shopping) exchange rates, I was miffed.

And what’s more?  This is by no means limited to shopping overseas in person, this happens all the time online!  Sometimes they’re sneaky and know you’re from Australia, so by default you are shown the pricing in Australian dollars. Then they try to sell it to you as “have the extra security of paying in your local currency”!  Pffft.  I’m not buying that.

Take, for example, this Karen Millen dress on asos.com:

You can either buy this for A$239.75 or £140.00.  But at this very moment, £140.00 is only A$207.24 — isn’t that ridiculous?  That means if you pay in Australian dollars, then you’ll be paying up to A$32 more!  Even if you were to pay with an Amex, which generally has higher international conversion fees and transactions fees, that is waaaay too much.  (I’ve chosen this dress because I like it, and because the model kind of looks incredulous.  Or maybe she’s smizing, I don’t know.)

And even worse, for some reason, the Australian brand Mimco has done something weird with their pricing, so that it’s more expensive to buy a bag in Australia than in the UK!!!

Oh dear, this has turned into a bit of a rant.  I guess the moral of this story is, if an overseas store/website offers payment in Australian dollars, do a quick conversion check to see if you could save some money while spending money.

Of course, not all websites do this.  For example, shopbop.com provides the other currencies for reference only, but actually charge your credit card in US dollars.  If this is the case, then choose your credit card or payment method wisely… but that is a story for another day.

Since the dollar has hit another all-time high, I am going to do some browsing and save some money now — wish me luck.

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