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.

[Adam185]

I actually didn't get (or maybe I didn't see this 3% charge). Are they embedding it into the "service fee" line item? I fine tooth combed everything. If it is added to the service fee line item without any sort of notification, that is just too shady. I changed my currency to Euro, so perhaps that circumvented the 3% fee. I did use a US Amex.

[Jeff-And-Cheryl0]

@Adam185

 I missed seeing this hidden 3% for the first 3 bookings I did in Italy last year. Bottom line. If you have a US based credit card account and book in another country that the host has listed the property in a non USD currency you are paying the hidden 3%. You can switch currency but you are still paying the 3% conversion fee as well as the crappy exchange rate. No way around it that I have read. Sure we have credit cards that dont chage you and I a conversion fee - but airbnb does so anyway!

You have to dig deep to see it.

1: Click “View Itinerary”

2: Look for the Billing Area and click “Detailed Receipt”

3: Look ¾ of the way down the page, below “Need Help” and under “Cancelation Policy”

4: SURPRISE – you have been in my opinion ripped off.  I have read that sometime ago yhey did not do this ... but at some point airbnb made this rip off change.

Here is what it says:

“Cancellation policy: Moderate. Certain fees and taxes may be non-refundable. See here for more details.

A 3% conversion fee was applied to this booking”

Here are 2 communications from Airbnb

 EMAIL 1:

AIRBNB • 17700 ANSWERS • 100% HELPFUL

No problem! You’re most welcome. 

Conversion fee applies if you pay in another currency than the host has listed the property. Your currency is determined by your country of residence and your billing address of your payment method. So for example if you have US bank account and you book a place in France (EUR) 3% applies. 

I know this is frustrating, and this is a popular complaint, but at the moment the system works this way. What I can do for you right away is filing your feedback to the development team concerning demand for an option to select currency to pay in, I hope they will take it into account and implement it on the future website updates. 

Best wishes, 

------------------------------------

EMAIL 2:

Rob N, May 9, 17:18 CDT:

Hello Jeff,

I'm sorry that you've been back and forth a few times with a few different case managers. Bottom line, if a guest is paying in a currency different from the default currency of the country where the listing or experience are located, Airbnb will charge a 3% conversion fee on your total cost; the conversion fee accounts for Airbnb’s holding costs and foreign currency risks.

Here is further information on the matter.

Had to take out link

Thanks so much and sorry if you're displeased with the fees Airbnb applies to particular reservations,

Rob

Hope that helps explain it .....Please let me know if you see it???  I just checked my currnet booking and its there - it so pisses me off.

-Jeff

[Derek43]

To be fair, practically NOBODY gives you the exchange rate you'll find on Google. That is what's known as the "mid-rate"—half way between what the currency exchanges will give you to buy or sell a foreign currency.  AirBNB's rate is actually 1½ to 2% better than my bank would give. However, since my bank doesn't charge 3% on top, I'll come out ahead if my bank does the exchange. It's the 3% exchange fee on TOP of the fact that they have about a 10% spread between the buy and sell rates that is unfair.  To get the mid-rate, you'd need to have a bank account in the foreign country,  and use a service like TransferWise.

[Sylvain42]

Derek, don't take this the wrong way but your bank really sucks if AirBnB's rate is 1.5% to 2% better (and yes I'm considering the exchange rate, before the fee). I have accounts at 3 major banks in the US and they all use a rather fair exchange rate (maybe <0.25% from true mid), and 2 out of the 3 charge no foreign transaction fee. This makes the AirBNB charges even more absurd.

[Derek43]

Sylvain, I don't take it the wrong way. When I first saw my bank's rates I burst out laughing because they had the gall to post it on their wall below a sign that said "we NEVER charge a conversion fee".  I should bloody hope not on top of the 15% spread between buy and sell!  They seem like a pretty normal spread for the UK, though.  I've never really looked at the exchange rates of my Canadian bank though.  I swear this is the only way UK banks make money—they don't charge me for anything else, while my Canadian bank has a fee for everything.

[Morah0]

Interesting discussion.  Curious:

Though I host in Israel, most of my guests are from the US.  I list my place in dollars.  This way they don't get annoyed by what seems to them to be fluctuating prices.  Now I see that there is an added benefit. 

I have the money deposited into my US bank account, but was considering having it deposited here.  In that case, would I have to pay the conversion fee?

[Derek43]

I'd definitely say use the US account, and then if you need to transfer money back to Israel there are much cheaper options than either letting AirBNB or your bank handle exchange.

[Judah1]

This is bad advice. Regardless of how you choose to get paid, Airbnb imposes the conversion fee. There's no additional fee to get paid in Israeli Shekels vs US Dollars because Airbnb is charging the customer the 3% regardless. If Morah would prefer Israeli Shekels, it would be cheaper to get paid directly in Shekels and not need to pay to convert from USD to Shekels again.

[Derek43]

"Regardless of how you choose to get paid, Airbnb imposes the conversion fee. "

How do you figure that?  If the listing is in dollars, and the deposit account is in dollars, and the payer's account is in dollars, how is AirBNB getting to charge a conversion fee?  AirBNB's ALREADY charging a service fee for the actual listing, but when there's a currency difference they charge a further 3%.

As for getting paid in Shekels, yes, she would make more money that way, but she's already said she has chosen to list in dollars for her customers' benefit.  Having made that choice, you can get transfer costs down to 0.5% or even less if you use another service.

[Judah1]

"How do you figure that?  If the listing is in dollars, and the deposit account is in dollars, and the payer's account is in dollars, how is AirBNB getting to charge a conversion fee?  AirBNB's ALREADY charging a service fee for the actual listing, but when there's a currency difference they charge a further 3%."

I wish you were correct, but unfortunately you are not. I am a US host with a listing outside the US. I charge in USD, get paid in USD, and 100% of my customers are Americans paying in USD. Yet Airbnb still imposes a 3% conversion fee on all my customers. Why? Simply because my listing is not located in the same country as where the guest is currently located. So yes, you can't believe that Airbnb is charging to convert money that isn't actually getting converted, but unfortunately Airbnb decided to act like bandits and charge BS fees for imaginary currency conversion.

[Judah1]

You won't be directly paying the conversion fee, but your customers will. One way or another it's coming out of your earnings. Customers will be seeing higher prices and asking for better rates or you'll simply get fewer bookings (until you lower your rate).

[Miko1]

I think there was someone on this thread who was renting a property in Israel and listing it in USD. However, she later realized that for US customers Airbnb still charged a conversion fee simply because her listing was in Israel. So take a moment to savor this: USD to USD converted to and from Shekels. Only no conversion actually takes place, it's just Airbnb double-dipping to the tune of 8% on both sides (refresher for those that joined recently - the 3% conversion fee is added to an artificially inflated exchange rate, bringing the total to ~8%).

PS. I just loved the email from support that claimed to forward one's complaint to the development team. As I stated previously, Airbnb has worked HARD to make the fee unavoidable (it could be avoided until the end of last year). I'm willing to bet that there are people from the company trolling this thread as we type, just in case someone actually comes up with an idea on how to defeat the fee so that they could plug it ASAP.

The funniest part of this whole story is that had Airbnb just decided to raise their fees by a few percentages, nobody would've batted an eye (OK, maybe a few would have complained). It's just their sleazy dishonesty that has people riled up. Everybody with half a brain knows (or should know) that this is by design.

[Jeff-And-Cheryl0]

@Miko1

Agree....If Airbnb raised thier rates at least it would be transparent.

[Steve306]

Exactly, they should just publish exactly what the charges are along  with various worked examples, then it's a take it or leave it or adjust the rental price to cover these hidden costs.

[Daniel592]

I really like the idea of Airbnb and have used it extensively. But the company is now abusing its dominant position with underhand tactics like this.

My wife and I are travelling in Europe for several months soon and have chosen to book through booking.com for most of our accommodation because of this. With all Airbnb's fees and hidden costs it is not so competitive anymore.