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Questions on foreign currency transaction and refund

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New Community Member

Questions on foreign currency transaction and refund

Here it comes the questions regarding foreign currency purchase and refund:

 

I want to know, if I purchased an item from UK website charging me in GBP, paypal charged me in AUD after conversion, if I do a refund, would I be refunded in full amount of AUD as whatever I paid?

 

From the paypal official website under User Agreement, section 14.6, it says:

 

"14.6 When you send a payment in which you perform a currency conversion using PayPal (i.e. converting the currency in which you fund your payment into the currency to be received by the recipient) and later there is a refund, return or Reversal, we will generally reverse the currency conversion and complete the refund, return or Reversal in your funding currency using the exchange rate which prevailed on the date of the original transaction."

 

It seems from the above that it is very clear that they will use the same exchange rate on the date when they charge ur bank in AUD by converting (in this case) the AUD to GBP as the seller price is in GBP.

 

HOWEVER, I also saw another posted by another customer in 2012 (sadly remained unanswered) saying he was refunded in foreign currency in full amount but after converting to his home country currency, he lost some money, meaning PayPal didn't refund him in full amount- not using the exchange rate which prevailed on the date of the ORIGINAL transaction- because if so the exchange rate charging you and refunding you should be the same, meaning you get refunded for exactly for what you paid for.

 

So can anyone answer me whether I'll be refunded in full- definition is, refund whatever exact amount I paid?

3 REPLIES 3
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Moderator

Re: Questions on foreign currency transaction and refund

Hi KittyL,

 

When a refund is issued where a currency conversion took place for the initial payment then the exchange rate used should be the same as the one used to fund the original payment.

 

If this is not the case then I would suggest you contact PayPal directly by email or phone and request that they take a look into this.

 

Let us know how you get on!

 

Siobhan 

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New Community Member

Re: Questions on foreign currency transaction and refund

Hi Siobahn,

 

Thank you for claryifing your policy regarding exchange rates and refunds. I purchased an item on Feb 13 in the amount of $107.54 USD ($1 CAD for $.70 USD). $153.43 was billed to my credit card. To make a long story short, there was a delay with my purchase with the vendor and we both agreed to fund the money. On Jun 21, I was refunded $134.25 CAD ($1 USD for $1.25 CAD). How did I lose approx. $20 or 13% of my original amount with a simple refund!?

 

I reviewed 8legged response to your thread with buy rates and sell rates. When I called Paypal customer service, they attributed the discrepency to the exchange rate but in between Feb and now, there is an $0.08 difference (approx. $1 CAD to $0.78 USD as of yesterday).

 

When I pointed out to them that on Jun 01 I received a refund in full for $118.50 CAD ($89.89USD) for a product that I attempted to purchase originally on Apr/18 for $118.50 CAD ($89.89 USD), the specialist agreed with me but was still trying to use the exchange rate as the reason.

 

I had my concerns escalated and I am awaiting for a response.  I wouldn't have gotten this far without your informative post. Once again, thanks a bunch!

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New Community Member

Re: Questions on foreign currency transaction and refund

well they say "using the exchange rate which prevailed on the date of the original transaction. ", but dont tell you if they are using the SAME exchange rate the operation was done with, or the Exchange rate for that same date but using the "Sell Rate" or the "Buy Rate" they can use the sell rate for the original conversion AUD->GBP that gives them some money, but that same date the "Buy Rate" GBP->AUD is lower, giving them some more money.they are not lying, they used the exchange rate that prevailed in that date, they just used the buy rate first time and the sell rate the second.

 

😛