Tip 6: Foreign Transaction Fees

There have been countless articles written online about how to save the most money whilst traveling abroad. Most advise that you pay in cash in the local currency and avoid using credit cards or ATMs. This is generally good advice, since most cards charge foreign transaction fees of anywhere between 1-3%...in addition to the currency conversion rates, which are not guaranteed to be most favorable to you (although I have found most banks to provide the best current rate when doing conversions most of the time).

Another suggested option is to get a credit card that promises not to charge a foreign transaction fee. Capital One is the most popular one currently available. But maybe you don’t want to open a brand new credit card…it can sometimes be a hassle and can impact your credit rating, especially if you already have a bunch of other cards with high spending limits.
If you do want to use a credit card internationally but don’t want to open a new card, one option that most people overlook is to just call each of your current credit card companies and ask what their foreign fee policies are. Then, once they explain the fees, ask them to waive them. Will they say yes? Of course not! This is where you need a supervisor…

In many cases, these fees are not actually controlled by the bank. MasterCard and Visa impose certain transaction fees on the banks that the banks then pass on to you. The initial customer service rep and the supervisor will be sure to point this out to you so that you won’t think less of their bank…it’s not their fault these fees are being charged, after all. This is a fair point…except that you’re the customer, and they need your business; even if it’s going to cost them a little money to keep it. After the rep explains the reasoning for the fees, you should politely respond that you understand the policy and where the fees are coming from, but you still feel that a valuable customer should be extended a courtesy of having these fees waived. Otherwise, you can tell the rep, you’ll just switch to a card without fees (mention Capital One by name to let him know you’ve done your research). And while you’re switching cards, you may just want to close your current account all together (don’t actually ask to close your account as a bluff, or you may suddenly find yourself having your account actually closed even though you were just bluffing).

At this point, the supervisor will do one of two things. He will either tell you once again that, while he values your business and doesn’t want to lose you as a customer, there’s really nothing he can do. Or he will tell you that, while he’s not authorized to waive the fees, he can offer you some other incentive to keep you as a customer. When I had this discussion with my Chase MasterCard supervisor, he came up with a unique solution. He asked me to estimate how much I planned to spend during my upcoming trip to Italy. I responded that I planned to spend about $500 with my card. He took a look at something in his system and then said that he could offer me a credit of $25 worth of reward points now…as a way of balancing out the transaction fees I would be charged for my purchases in Italy. This was actually more than I would have been charged, since their fees are 3% for foreign transactions. But for the supervisor, a courtesy credit like this is relatively easy to apply…whereas waiving the actual transaction fees might be nearly impossible. Ultimately, I don’t even need to use my Chase MasterCard in Italy if I don’t want to…but the $25 is mine to keep! But if I did end up using this card, I would know that my transaction fees aren’t really coming out of my pocket…which would, of course, make for a far more enjoyable trip!

Case Study 1: What’s Negotiable and What’s Not (Part 2)

In last week’s trip to Value City Furniture, we learned that with a little bit of bargaining we could save $100 on a new couch. Now we’ll be taking a look at a similar shopping trip, but with somewhat less successful results.

In preparation for Thanksgiving last year, my fiancé and I decided that the time had come for us to have a real dining room table and chairs…so we followed our typical strategy of going everywhere and anywhere in search of the perfect dining room. We spent a few weeks casually looking online, and one weekend we decided to journey through as many stores as we could.

Our first stop was Bob’s Discount Furniture…we had been there a few times to take advantage of its infamous free candy and ice cream (which we quickly learned was “not for take with”). But this time we were on a specific mission…and sure enough, we fell in love with the first set we saw. It had everything we had been looking for and even included a matching china cabinet…which we hadn’t really thought about, but now seemed like would be a perfect addition to the room.

Of course, I wouldn’t feel comfortable going with this dining room set until we had compared to as many alternatives as possible. So we continued on our planned trip, heading in and out of store after store, essentially comparing everything we saw to the first set. After a long, non-stop weekend, we finally settled on the Bob’s set…there was simply nothing else out there that had the look and combination that we were looking for.

So we headed back to Bob’s ready to buy…but as before, I insisted on attempting to bring the price down at least slightly. I had looked up this particular furniture set online based on the manufacturer info, and Bob’s did seem to have the lowest price by a decent margin. But I had to take my own advice and at least try to bargain a bit. What’s the worst that could happen?

We went back into Bob’s on Monday night and met a nice salesman; we asked a few questions about the warranty, shipping, and dimensions…questions that we mostly knew the answers to but wanted to confirm anyway. Then my fiancé casually went back to the car while I switched into bargain mode. I began by stating the same thing I did at Value City: “I’d really like to buy this set but it’s just a little bit more than my budget.” The salesman began talking about their zero-percent financing plan, which I listened about but wasn’t really interested in. I went into round two: “If this were even just a bit cheaper I think I’d be ready to buy right now.” But he still wasn’t budging…he said very politely that Bob’s didn’t allow for any price changes or negotiation. I had a sneaking suspicion that this might actually be their policy (whereas I’m normally inclined to assume that whatever the salesman tells me is only partially true, if at all). But I asked if I could speak to the manager just to see if maybe he would be willing to lower the price a bit to avoid losing a sale. Again politely, the salesman went to the back to get the manager. He came back a few minutes later and said that the manager couldn’t come out right now, but he confirmed the no-negotiating policy. I said I understood, but I still wanted to speak to the manager in person. He called the manager’s desk, where he clearly got no answer. I then followed him over to that desk, where the manager’s assistant was sitting out front. I asked her to call him, which she did…he said he couldn’t come out right now. I insisted to the assistant that I needed to speak to him or else I’d be walking away without buying a big dining room set; she went to his office for a few minutes and eventually came out with him following behind.

He came up to the counter, and I told him the same story I had told the salesman. In a very stern, focused manner the manager said, “We don’t negotiate prices.” I said, “Ok, I understand that, but would you really want to lose a sale because you wouldn’t lower the price by a little bit?” He repeated the exact same sentence as before. I said, “So you’d rather I not buy this dining room set at all?” He then said something along the lines of, “I have more important things to do and don’t have time for this anymore.” This caught me a bit off guard; I actually had to take a moment to consider if he had just said what I thought he had said. Now I was upset. I began saying how rude and inappropriate it was for him to say that to a customer; he just walked away back into his office. I continued to tell the assistant (with the salesman watching his sale slip away) that this was ridiculous and that I wanted the name and phone number of the main store manager right now. I told her I’d be speaking to his manager first thing in the morning and that it was totally unacceptable that he would treat a customer like this. After a few minutes of this, I told the assistant to tell the manager that if he hoped to avoid my speaking to his boss about this fiasco, he’d better come back out and apologize for his behavior. The manager called the assistant into his office on the phone; after a few minutes, she came back out and said that he heard what I said but he couldn’t come out because he was busy counting the cash receipts for the day. I responded that, had he said that to begin with, I might have been more understanding and just come back the next day to speak to him or another manager…but instead, he had been incredibly rude and risked a big sale. I walked away in what I would honestly describe as a big huff! But I didn’t leave the store…I walked with the salesman back to the dining room set and told him I would still buy this from him…it wasn’t his fault that the manager had treated me this way, and I did actually want this set, even if it meant paying full price. He was very polite and helpful through this whole process, and he apologized multiple times for his manager’s behavior. I told him I appreciate that, but I’d still be speaking to the main manager about the situation.

The next day, as planned, I called and spoke with the main store manager. He said he had actually been told by the manager in the morning that he’d probably be getting a call about this. We discussed the whole situation, and he apologized multiple times and said that, while the no-negotiating policy was indeed Bob’s set-in-stone policy, that didn’t excuse the manager’s behavior. The store manager was polite and said that, as a courtesy, he would give me a credit of $50 which I could use toward this purchase. I said that, ironically, had his manager offered to reduce the price by this small amount, I probably would have just agreed to buy it at that price and we would have never had to go through this whole mess. He apologized again and went over the details of how I could get the credit.

A week later, we received the furniture and the credit…everything was exactly as we had hoped and it looked perfect in our dining room. The extra leaf we had bought proved to be incredibly necessary for our full-table Thanksgiving dinner. Looking back, this was an interesting departure from the Value City situation. But looking at both together has demonstrated a few important notes for future transactions. The most important lesson is probably that, while it never hurts to try to bargain, it’s probably worth researching the store’s policy ahead of time. I had read a few forums online where some posters were noting the Bob’s policy…but some had responded that their experience had been that there are some negotiable items at Bob’s. So I figured I’d give it a shot; clearly, dining room sets are not on the negotiable list.

While I saved $50 on this whole transaction, it may not have been worth all the hassle and stress involved. While I normally don’t mind even the most aggressive negotiating session, this particular incident wasn’t quite as much fun as a typical customer service fiasco tends to be. Especially when I consider my earlier blog post about the “real” cost of saving on a purchase, it becomes clear that certain savings just aren’t worth it. If you’re having to call the main manager to complain about your experience, you’ve probably lessened the enjoyment that you’re supposed to get from the furniture purchase in the first place. Maybe it’s not worth focusing so much on the bottom line…after all, are you really going to even notice or remember that $50 during Thanksgiving dinner?