A foreign transaction fee for a U.S. travel booking? Now you’re roaming alone

Brandy Hamill knows the importance of reviewing her credit card statement after booking a trip. If she hadn’t taken a look at hers, she might have missed the strange surcharge when she booked a flight on Travelocity.

And when I say “strange” I definitely mean it in every sense of the word. Weird, odd, mystifying — and a little troubling.

Hamill picks up the story:

I booked a roundtrip flight from Los Angeles to Toronto for December through Travelocity with Air Canada.

However, the charge showed up on my credit card from a ‘foreign’ location so my bank charged me a 3 percent foreign transaction fee. I was surprised, because I had booked with Travelocity and didn’t expect a foreign transaction fee, so I attempted to get a refund for the fee.

Hamill spoke with two Travelocity representatives and three supervisors for a total of nearly two hours. The online agency conferenced the bank on their call to resolve the transaction fee that had apparently been wrongly charged to her card.

In the end Travelocity gave me the $15 service fee back and a $50 gift card toward a future package from them (they offered $25, but I made a cogent argument I could just get charged a foreign transaction fee when using my gift card).

However, it should be noted that they would not change the charge from Air Canada, and from my understanding had no power to do so. They also did not want to give me the full amount of my foreign transaction fee, which came to a total of $16.71.

I contacted Travelocity on Hamill’s behalf. Here’s its response:

Chris, this is a technical error, as all of our charges are supposed to be generated out of San Antonio. If that had happened correctly, the customer would never have been charged the foreign transaction fee.

When our Customer Service Team refunded $15, they were actually refunding the Travelocity service charge, so we’ve submitted a refund request for an additional $1.71, to fully compensate the customer for the fee they were charged and alerted those who made the initial refund aware of the discrepancy. We will also explain this to the customer.

A couple of observations: First, I’m happy that Travelocity fully compensated this customer for her inconvenience.

Second, it’s probably not worth two hours of your time to recover a few dollars. Think of how much employee time Travelocity spent in this epic battle over $16? Wouldn’t it have been easier to credit the customer quickly?

And finally, and most importantly, Hamill was correct to review her credit card statement after making the booking. That’s a lesson we can all take away from her bizarre foreign transaction fee odyssey.

  • http://blog.flightwisdom.com Flight Wisdom Guru

    Even without an agency, we’ve discovered CC companies charging this on charges made online with foreign airlines. We spoke to several airline employees we know, in an unofficial capacity. This is what we came up with.

    Officially, foreign transaction fees can be charged on any transaction in which a foreign organization is receiving your money, ie Air Canada, which certainly sends its money to a Canadian bank.

    In theory though, if your transaction is priced in United States dollars for a flight originating in the United States, it should not constitute a foreign transaction. Which is the best argument you can give your credit card company. If you purchased a ticket from Montreal to Vancouver though, you are out of luck.

  • Barbara Liguori

    I, too, was hit by a “foreign transaction fee” by MasterCard when I booked a cruise with Viking River Cruises through my travel agent in Tucson, AZ. The price for the cruise was quoted in dollars, and Viking has an office in California. I called Viking Cruises at the California officeand was told that all payments go to Viking headquarters in Basel, Switzerland. When I called Citibank, I was told by an ignorant representative that my purchase was made in Basel, Chile! She insisted that it was a foreign exchange even though the transaction was in US dollars, and I never left this country. I was charged the full 3% foreign transaction charge as if I had made the purchase in Swiss francs.

    I read the Citibank cardholder agreement from cover to cover, and there is absolutely no mention of a single-currency fee for a cross-border transaction. There is only the statement about a transaction fee of 3% when the purchase is made in a foreign currency and the transaction in foreign currency is converted into US dollars. I believe this is in clear violation of the Truth in Lending Act and I am pursuing the matter further with MasterCard, since Citibank is not disclosing the nature of this fee.

  • Dina

    That is the best argument I used when I called the 5/3 bank that issued my CC. I paid Martinair (Holland based) for the trip from Miami in USD, and then discovered that I’ve been charged foreign trx fee. I tried to argue with the bank with no luck. Any ideas how to handle that successfully to recover those fees?

  • Aman

    I have had a similar charge on a ticket booked via Orbitz. It was for a roundtrip from LAX to Vancouver, Canada on Air Canada. I have followed up with Orbitz, but they are intent on making me talk to the Bank of America. Any hints on what I should do?

  • Edda Katz

    I had the same experience with a Travelocity booking that Brandy Hamill had, except that in my case it involves an Air Canada flight from Philadelphia to Toronto. So far, I have exchanged several emails with Travelocity customer support but have gotten nowhere, and have also had one unsuccessful phone call with them.

    But I don’t intend to give up. For me this is a matter of principle. From the links I followed under “you may also be interested in these articles” elsewhere on this web page, it appears that similar fees are being incurred in all kinds of transactions, much to the surprise and detriment of consumers.

  • Ipadirvine

    It should be disclosed then confirming the cc purchase through the travel agent /online booking service.  The reason it is charged in a different country is to save the company the fees in foreign money conversion.