eWealth Global

eWealth News

Stay up to date with the latest industry insights and news from eWealth Global

Contact Us »

Holidaymakers in exchange rate 'postcode lottery'

Saturday 26 May 2012

Holidaymakers are being charged up to £25 more to change £500 into Euros on the high street depending on where they live, with Thomas Cook and the Post Office the worst offenders, according to Which?.

The consumer group found significant regional variations in the exchange rates that the same chains offer in different parts of the country.

Branches of Thomas Cook and the Post Office were found to have the biggest regional differences.

Which? said that the “unfair” variations amount to a “postcode lottery” for consumers. It said that the higher rates are piling further misery on hard-pressed families.

The group investigated pound-Euro exchange rates in 10 locations across the UK. It visited cities including Birmingham, London, Glasgow and Norwich.

In each city it monitored the rates in Thomas Cook, the Post Office, Marks & Spencer, Tesco, Sainsbury’s and Asda.

Which? was offered €585 for £500 by Thomas Cook in Sheffield. However the amount that undercover investigators were offered fell to €554 at Thomas Cook in Manchester, a difference of €31.

Which? said that the difference - equivalent to £25 – was “potentially enough to pay for your taxi to or from the airport”.

Meanwhile Which? was offered €578.50 for its money at Post Office branches in London and Glasgow, but this fell to €565 in cities such as Birmingham.

M&S was found to offer the same rates nationwide, whereas Tesco, Asda and Sainsbury’s were not found to have “significant” regional differences in exchange rates.

Thomas Cook and the Post Office both said that they have flexible exchange rates so that they can compete with the prices being offered by local rivals, which may be higher.

The Post Office said that these flexible rates only apply in 400 branches. Elsewhere, it uses the same exchange rates across the country.

Richard Lloyd, executive director at Which?, said: “While we understand that local competition may play a part in the rates set, it is unfair that people are missing out on the best currency exchange rates just because of where they live.”

He said that holidays “don’t come cheap” and that the anomalies that Which? found “do not help hard-pressed consumers”.

The consumer body called for consistency in the rates that bureaux de change charge across the country.

A Thomas Cook spokesman said that its exchange rates are set locally by branch managers so that they can compete with other local bureaux de changes.

The move allows managers to match rival outlets if they have higher rates.

“To ensure they’re offering some of the best rates, our foreign exchange bureaux in our stores are able to offer local rates that compete with other high street currency providers. For our best rate, we recommend reserving online for either home delivery or collection in store,” he said.

A Post Office spokesman said that most of its 11,500 branches offer the same exchange rates across the country.

However 400 branches in busy urban locations can, like Thomas Cook, flex the exchange rates they offer in order to compete with local competitors.

Andrew Brown, head of travel money at the Post Office, said: “In around 400 of our branches, in areas where several foreign currency providers compete with each other within close proximity, we have made some small adjustments to the rates offered to ensure our customers continue to get the best possible deal.”

He added: “All of our customers are able to benefit from a uniform and highly competitive exchange rate, which is offered online for next day delivery free of charge to their home or to a Post Office branch, whichever is more convenient."

Mr Brown added said the Post Office also offers special rates on transactions over £500 and £1,000, and has weekly special deals on specific currencies.

There are over 20 high street foreign exchange providers in Britain

What We Offer

Connect with us
Linked In FaceBook Twitter eFX Login Sign Up

About eWealthGlobal

At eWealthGlobal our mission and values are to assist individuals and businesses throughout the world to reduce expenditure and increase wealth through simple to use technology and services.