topic US dollar rip off in Buying

US dollar rip off

peteriou — Tue, 06 May 2014 13:09:32 GMT

The Australian dollar is currently worth $1.07 US. Why are product from the US still selling at a higher rate then the Australian. Eg a US product is selling for $300us eBay calculates to pay in our dollar $310.

Re: US dollar rip off

cherry*135 — Tue, 06 May 2014 13:23:54 GMT

1 USD = 1.07 AUD

300 USD = 323.54 AUD

Re: US dollar rip off

k1ooo-slr-sales — Tue, 06 May 2014 15:07:17 GMT

@peteriou wrote:
The ~~Australian~~ US dollar is currently worth $1.07 US Australian.

(sorry, just had to correct you Opening Post, the rate was the wrong way around)

eBay provide a 'guide' to the exchange rate when you view an item, but this is not the rate that you will pay when you pay for an item. My last US purchase was about a week ago and the PayPal exchange rate was about A$1 = US$0.89 even though our dollar was trading over US$0.92 at the time.

Even banks do not provide the exchange rate you see on the news or read in newspapers when you complete in international transaction.

Re: US dollar rip off

cq_tech — Tue, 06 May 2014 15:12:27 GMT

The difference between the listed amount and the actual amount paid is due to the 2.5% surcharge which Paypal charge as a premium for performing international (cross-border) transactions.

Re: US dollar rip off

digital*ghost — Wed, 07 May 2014 01:36:37 GMT

Sadly, it's now 4% - it was increased several months ago. If you add 4% to the estimated conversion showing on eBay, you'll get the price you'll pay via PayPal, give or take a few cents (the higher the price, the greater margin for a discrepancy in actual cost, but it should still be quite close).

Re: US dollar rip off

cq_tech — Wed, 07 May 2014 01:55:04 GMT

Actually DG, the rates vary slightly according to the type of transaction, but you are essentially correct. For purchases, it is 4% for all countries other than the US or Canada, where it is 3.5%. Seems that usury is still alive and well in the land of Paypal. 😞

From the current Paypal Fee Schedule:

When funding a Commercial Transaction where the buyer pays in AUD and the merchant receives USD or CAD we apply a currency conversion fee of 3.5% above the wholesale rate.

Assuming you wish to buy an item that costs $100 USD:
- Example wholesale rate: $1 AUD for $0.96 USD.
- Rate applied: $0.9275 USD.
- You will be debited: $107.81 AUD.
- Currency conversion fee: $3.65 AUD (included in the debited amount above).
When funding a Commercial Transaction where the buyer pays in AUD and the merchant receives a foreign currency (not USD or CAD), for example EUR, we apply a currency conversion fee of 4.0% above the wholesale rate.

Assuming you wish to buy an item that costs €100 EUR:
- Example wholesale rate: $1 AUD for €0.74 EUR.
- Rate applied: €0.7115 EUR.
- You will be debited: $140.54 AUD.
- Currency conversion fee: $5.41 AUD (included in the debited amount above).

Re: US dollar rip off

digital*ghost — Wed, 07 May 2014 02:44:40 GMT

Well, that explains why my calculations have been a little off for USD amounts lately - you shouldna told me LOL, as I've been blissfully ignorant, which led to pleasant surprise every time I saw the final payment amount was a few cents lower than my calculations. 😄

Re: US dollar rip off

aussietastic — Wed, 07 May 2014 03:47:51 GMT

Yes it stinks! and it stinks real bad.

Makes you wish you had studied a bit harder at school.

It is simply legitimised criminality under the guise of free enterprise. A huge fee for something that costs cents.

Like the recent bank late payment fees furor which were found by Federal Court to be in breach of contract, of coarse the problem of this attitude by banks had been a long standing one and not everyone has the opportunity to organise a class action of 30 000 plus customers to achieve a result.

It also takes various shapes and forms, I purchased an item from America back when the dollar was at parity. The purchase site didn't accept PayPal so used my Visa card, now when paying I said I was paying in Au Dollars and they charged we a conversion fee at that time (about 3 something %), which I thought was standard and everything went fine no problems, until I got my Visa statement.

There was a charge for International transaction of 2.5%, I nearly fell over backwards. I rang the bank and they said yes that is correct. I said isn't Visa designed for international transactions?They basically said yes and suck it up!

You pay 19% interest plus an annual fee....... and they want more!!!!

The rich get richer and their a law unto themselves....... PEOPLE NEED TO RISE UP!!

Re: US dollar rip off

cq_tech — Wed, 07 May 2014 07:02:11 GMT

For a long time my bank (CBA) was charging the same 2.5% fee on international commercial transactions as Paypal, then when the bank increased that fee to 3% last year, it was actually cheaper for me to pay for international purchases via Paypal.

However, I'm very pleased that you corrected my obsolete information above DG, as it is now cheaper for me to pay for overseas purchases using my Mastercard instead of Paypal, by between 0.5% and 1% (which isn't very much in the grand scheme of things, but it's still better in my pocket than theirs). 😉

The only thing I'm not clear about now is what fees would be payable if I was to use Paypal with funding from my credit card instead of my bank balance for a purchase from the US.

Surely I wouldn't be slugged with a 3.5% surcharge from Paypal, plus another 3% from my credit card provider. Or would I?

I'm not all that inclined to make a test purchase simply to find out for myself.

Re: US dollar rip off

k1ooo-slr-sales — Wed, 07 May 2014 09:45:35 GMT

if you buy something from the USA and use PayPal to pay for it then PayPal work out the currency exchange (including their fee) and then debit your account the Australian dollar amount of the transaction. Because PayPal are withdrawing A$ there is no currency exchange fee from your bank.

Re: US dollar rip off

davewil1964 — Wed, 07 May 2014 10:04:12 GMT

Also, cq, there is usually a flat charge on top of the % cut they take.

Re: US dollar rip off

cq_tech — Wed, 07 May 2014 16:53:03 GMT

Thanks slr & dave. Of course, it's perfectly logical that Paypal would withdraw funds from my credit card in A$ and I can't even begin to imagine why I thought otherwise.

For relatively low value purchases I'm perfectly happy to use my bank account for funding but for more expensive items, and particularly those from overseas, I feel much happier in the knowledge that I have the additional protection that my credit card provides.

However, so far I've had absolutely no issues whatsoever with Paypal with regards to the four INRs which I've experienced during the last 10 years (one of which ultimately turned up two weeks after being refunded, so I simply paid the seller once again).

Re: US dollar rip off

lyndal1838 — Wed, 07 May 2014 17:52:18 GMT

CQ, while your bank does not charge a fee for using paypal I think this is the place to warn posters that some banks/financial institutions do.

I have one of the GE Money cards that I use for interest free purchases. In the early days of using ebay I had that card attached to paypal. I made 3 purchases, one from the USA and 2 local (AU$) purchases.

When they hit the account all three had overseas transaction fees. I rang GE Money and was told that no matter what the currency I would be charged the fee because paypal is a US company.

Needless to say, that card was very quickly removed from paypal.

Re: US dollar rip off

cq_tech — Wed, 07 May 2014 18:02:07 GMT

Very interesting, Lyndal. Neither GE nor Citibank have very good reputations in this country and it's easy to see why.

Re: US dollar rip off

amber-eyed-girl — Wed, 07 May 2014 18:27:06 GMT

Lyn, amex was the same. Charging a conversion/overseas fee on an amount that had already been converted, by Paypal.

That was some years ago now, and when queried, they did say that was a mistake and they were looking into rectifying it.

They then subsequently declared it an error, across all their account holders, and refunded.

The card had been cancelled, and they restarted the account to give a credit. They made good, and made certain of it 🙂

Re: US dollar rip off

lyndal1838 — Thu, 08 May 2014 15:43:58 GMT

My OH had an American Express card when he first came out here but very quickly realised it was not the card of choice in Australia so got rid of it

Much the same with Citibank...he opened an account with them because it was a bank he was familiar with and they were offering very attractive conditions and accounts while trying to establish themselves in Australia. I also had a card on his account and when he decided to close the account someone mucked up the paperwork. Despite paying the outstanding amount by cheque (yes, that is how long ago it was) and returning our cards to the bank, they decided the account was mine and that I still owed them the amount of the balance that had been paid by cheque. That was a very unpleasant 6 months trying to convince them that I was never the account holder and the amount had been paid.

I am now the holder of an American Express Card by default.....I have been a David Jones account holder for over 40 years and now American Express have taken over the DJs accounts. Unfortunately I was in the early stages of an interest free purchase that still had 2 years to go when the changeover occurred otherwise I would have closed my DJs account in protest. These days I use that card only for special offers to DJs account holders and they are few and far between now.

Re: US dollar rip off

amber-eyed-girl — Thu, 08 May 2014 18:41:57 GMT

Closed our Amex as it could hardly ever be used...considering the conversion error

the limited places it was accepted without paying a surcharge

the annual fee

the flood of "offers" to upgrade for five times as much

but...they did refund their overcharging...at least that showed some honesty.