Avoiding the Foreign Transaction Fee

[Terrence0]

I have a suggestion for Airbnb.  Currently, they have a very inefficient policy that they pass off onto the traveler.

I have a credit card that doesn't charge foreign transaction fees (like many other avid travelers) - my bank covers these fees for me.  Airbnb charges foreign transaction fees to book based on location - in fact, if you are booking and you switch the currency to the local currency of the listing, you will see a 3% lower cost (the foreign transaction fee cost) than if you look at it in another currency.  For my last 2 trips I have attempted to pay in the local currency (for example, if I am travelling to France, I will try to pay in Euros), but Airbnb will not let me do this.  Instead, they force me to pay in US dollars because I live in the US (even though I want to and have tried to pay in Euros), then they take my US dollars, convert them to Euros themselves, charge me a 3% fee (which my bank would have done for me for free!), and then pay the host in Euros.  This is dumb and inefficient - even worse, they pass this inefficiency off on me.  Give customers the option to pay in the currency of their choosing.

[Jeff-And-Cheryl0]

Its going to come out eventually - On another similar note - glad to see United Airlines in the US roll back its "Basic Economy" fares today - but at least they had competition so the consumer voted to fly other airlines.

Any Board of Director member with airbnb with 1/2 a brain would tell them to clean this up.  Yes, improve profits but not in such a crappy underhand, hidden way.  Airbnb is supposed to be a disrupter -  so why would you follow the crappy "hospitality" model of most hotel chains of treating cutomers poorly that they are suppsed to be disrupting?  Just piteful that a start up tech company goes this route.

[Helen322]

So, I don't know if this part was the same before, but the new regulations,

https://www.airbnb.com/terms/payments_terms ,

include this incredibly transparent and helpful statement:

--

2. Key Definitions

“Adjusted Exchange Rate” means the Base Exchange Rate plus a 3% fee charged by Airbnb for certain cross-border transactions.

--

The term is liberally used in the rest of the text.

No clarification about which are the "certain" transactions.

(Of course, needless to repeat, it shouldn't even be there. Online payments in other currencies are automatically taken care off in a way that ensures the final payment is the exact amount stated in the destination currency. I even bore myself by having to repeat the obvious.)

[Jeff-And-Cheryl0]

@Helen322

Thanks for sharing! 

Not sure what is said prior .... but I have seen airbnb getting bad press and maybe legal pressure.  Having a fee hidden in the FAQ's or Terms and Conditions does not make for a good consumer experience or being transparent in your order process.  Im getting ready to book an airbnb stay (no option for this one to book elsewhere) this week so will see if the booking process makes this transparent. My beat is it will not be transparent.  Agree 3% is still crazy!

[Ian193]

Thank you everyone for the information. It was confusing to me why I had to pay the 3%, and also the question of how good the rate is, when I wanted to book and pay in Euros for Spain, but find it always converting to AUD (as I am Australian).

Yes it is very annoying that AirBnb does this, and the thing that has come out of it for me is that they simply don't care what their customers think (even though it is a big thing that the Hosts get top reviews!).

We already pay the AirBnb service fee. Why should we be lumbered with the additional 3% + poor rate fees?

Thanks for the suggestions of other booking sites. I'm now checking Homeaway.

[Mercedes105]

Indeed being a frequent traveller to Spain and being able to pay in EUR, Airbnb does not allow me to do so and I have to pay the exchange rate every single time which it is a considerable poor exchange rate. I already pay the services fees. Is Airbnb sorting this out and offering the traveler the option of paying in whichever local currency the booking is for?

[Steve306]

This is the hidden cost of booking with Airbnb, all of which I am sure is illegal, they should warn you first and state the exchange rate they are going to use and give you the option to pay in whatever currency you want. Most other business manages to do so.  Its a very big money earner for them so dont expect them to give this scam up easily. Get them to give you a full breakdown of the charges and exchange rate applied. It took me months to get this and i have to admit their behaviour was very surprising.It not the charges they make its the non-disclosure that is unfair and I think illegal.

[Daniel592]

More Airbnb users need to be made aware of of this hidden charge.

Please post comments linking to this thread on Airbnb Facebook posts or on twitter.

[Alistair21]

Have to agree - it's a total scam,and against Visa's operating principles for one:

The chargeback rules are very clear about this. On the Visa website, the Guide for the Lodging Industrydescribes all the chargeback reason codes. On page 46, reason code 76 is described for cases such as these:

• Cardholder was not advised that Dynamic Currency Conversion (DCC) would occur
• Cardholder was refused the choice of paying in the merchant’s local currency

[Jeff-And-Cheryl0]

@Alistair21

That is very interesting....The 3% fee is very hidden and not visible when the price, plus cleaning fee, plus service fees are visible. 

[Bernard150]

This is a real problem. I am trying to pay for an Airbnb booking in the US using a US credit card. Because I am making the booking from outside the US they insist on billing me in the local currency, converting that to US dollars and charging 3%. On the current booking I am making it works out to an additional $300! Really irritating. Does anyone now a way around this?

Bernard

[Jeff-And-Cheryl0]

@Bernard150

Wow!  I know I made a reservation back in the US from outside the US.  I am a US resident with a US credit card and I did *not* get charged that money grabbing hidden fee 3% on that one.  But I may have had my VPN on using a US location (a possible solution for you, but then again a VPN costs a onthy fee).  That is really a scam if they are charging you that 3% for that reservation.  

I would email airbnb's customer service - good luck with that. Let us know how it works out for you.  Good luck.  I was told by airbnb that it is all based on where your credit card is issued from and not your location from your IP - but I would never put anything past some of these companies (Uber, Ticketmaster with class action lawsuits)

[Bernard150]

Thanks for your response. I did email them and will post whatever they reply.

My credit card is issued in the USA and billed in dollars in the USA.

I think you are right -  the VPN is the key. Not sure how one uses a US VPN when one is outside the US. Guess I will need a different discussion group for that.

Bernard

[Liz228]

The VPN is an easy fix, but I'm not sure it will solve the problem. (I use Strong VPN but assume every VPN service allows you to pick the IP in whichever country you use...) I made a booking from the Caribbean for a South American AirBnB property, using a US credit card and AirBnB insisted on converting things to British Pound Sterling (and charging me the related fees).

The question of where AirBnB deems your credit card to be issued is a more complicated. AirBnB insists I have a UK-issued card, which I do not. It was issued in the US and bills in US currency. When I pointed this out to AirBnB, they refused to budge and told me to contact my card issuer. 

Instead I chose to simply avoid using AirBnB for that booking. Their loss. 

[Jeff-And-Cheryl0]

@Liz228

Just crazy what airbnb is doing to lose customers.  I read that their top Marketing executive has just left - lets hope somebody decides to make their customers (guests and hosts) first!

[Eric-And-Lena0]

Hi Liz,

Can you explain how the VPN method work to avoid the foreign transaction fee? I have Private Internet Access for VPN and I can switch my IP to be US based or to other countries.

I played around with it and I wasn't able to get the foreign fee to go away. 

I am from the USA and my no-foreign fee card was issued in the USA as well. Do I have to change my IP to a USA IP when booking or do I have to change it to my current location's IP? I've tried both and didn't seem to work.