Does getting 19 percent less than the bank rate on foreign currency exchange sound like a good value proposition to you? Probably not. But that's what happens to British travelers who exchange pounds for euros at some British airports—and something similar could happen to you, too.
Bad Exchange Rates at Airports
The Moneycorp exchange desk at Southampton airport recently exchanged 500 pounds for just 439 euros, when 500 pounds should have yielded 542.5 euros at the bank rate and no less than 537 euros at a no-fee ATM.
A recent report from TravelWireNews notes that Moneycorp did a little better at Stansted, but those locations still valued the pound below a one-to-one exchange when the actual rate was 1.085 euros to the pound. The report also notes that other exchange desks did the same.
Although the TravelWireNews release didn't address the issue, I've found that airport ATMs operated by exchange outfits tend to give the same lousy rates as the exchange desks.
RELATED: New ATM 'Scam' Targets Travelers
An exchange rate as low as 19 percent is probably a bit worse than the average loss. But not by much. I regularly see rates in the range of 15 percent below bank rate.
How to Avoid the Airport Exchange Gouge
No wonder why I, along with just about any other unbiased source, keep saying, "Don't exchange cash, and particularly don't exchange cash at an airport." Even the 3 percent foreign-charge "gouge" on some credit card charges pales by comparison to the typical airport gouge.
Of course, it's easy to avoid this gouge by not putting yourself in the position to exchange currency at the airport. Even if you have no local currency on arrival, use a credit card to get into town or find an ATM operated by a legitimate bank.
More from SmarterTravel:
- Beware the New Airport ATM Scam
- The New Credit Card Scam That Preys on Hotel Guests
- 11 Hidden Travel Fees You Probably Overlook
Consumer advocate Ed Perkins has been writing about travel for more than three decades. The founding editor of the Consumer Reports Travel Letter, he continues to inform travelers and fight consumer abuses every day at SmarterTravel.