‘Postcode lottery’ on currency exchange leaves holidaymakers short-changed

The Momentum UK Team 25 May 2012

Regional variation on the currency amounts offered by the same providers could mean that consumers in certain areas are getting significantly less from their travel money, according to a recent report.

Regional differences between branches

The ‘snapshot’ study conducted by Which? reviewed in-house exchange rates offered for £500 in 10 different UK locations on a single day. They found ‘significant regional variation’ on the amount of Euros offered by two of the UK’s biggest travel money providers.

Thomas Cook showed differences as high as €31 between branches. Their best Euro provision of €585 was offered in Sheffield with the weakest offering found in Manchester of €553.80 - ‘potentially enough to pay for your taxi to the airport’ according to Which?. Glasgow, Leeds, Haverfordwest and Croydon all offered the same amount of €583 while Southampton and Birmingham quoted €580. London offered €575.80 and Norwich €575.

Notable regional differences were also highlighted in Britain’s leading foreign currency supplier, The Post Office. In contrast, Sheffield offered the lowest Euro provisions of €565 as did Haverfordwest and Birmingham. London and Glasgow offered the highest €578.50 with Southampton, Norwich and Manchester slightly behind at €574.85.

Marks and Spencer were the only provider offering consistent rates throughout the UK. Sainsbury's demonstrated no significant variations while differences were ‘not common’ amongst Asda and Tesco branches.

Executive director of Which?, Richard Lloyd 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.”

“Holidays don’t come cheap and these anomalies don’t help hard-pressed consumers. Currency providers need to make sure their rates are consistent to ensure a fair deal for everyone.”

Alternative options

The report also investigated differences between rates offered by online suppliers in comparison to central London branches. This investigation was executed over an 8-week period comparing the amount of Euros offered online and in-store. 22 foreign currency suppliers were examined including Marks and Spencer, Thomas Cook and Post Office and high street banks Barclays, Halifax, HSBC, Lloyds TSB and NatWest.

It was found that ICICI a popular online provider offered  €587.14 compared to HSBC where the average was  €562.78. This difference of around £21 led Which? to encourage consumers that it is ‘vital to shop around for the best deal’.

The report also noted that many of the best credit and debit cards on the market offered greater value for money on overseas purchases than the increasingly popular prepaid cards meaning that this could be another option for Britons wanting to get more currency for their pound.

Plan ahead

M&S Money stress the importance of planning ahead for your travel money provisions. Not only could this help you to secure the best deal but certain currencies are not widely available and may need to be pre-ordered such as Hryvnias and Zloty, the currency of Ukraine which is home of some of this year’s Euro 2012 matches.

Jane Lawson, Head of Travel at M&S Money:

“To get a competitive rate on your travel money it's always advisable to plan ahead and purchase your currency before you depart for the airport. However, with less-common currencies, like the Hryvnias and Zloty, which often aren't available on-demand, it's especially important to ensure you obtain your currency in advance.

"Those heading to the Ukraine should also be aware that old or damaged bills may not be accepted and, as it's a cash economy, travellers' cheques and credit cards aren't widely accepted, so it's particularly important not to leave your currency to the last minute."