If you’ve ever dared to wait until you get to the airport (you’re brave indeed if you have) then you’ll probably have seen the 0% commission headline plastered around the terminal. It’s got to be a good deal, right? Paying 0% commission surely means that you’re paying nothing extra at all?
Sadly that’s just not true. There’s no such thing as 0% travel money commission, even though, according to travel money expert Daniel Abrahams speaking to Cheap Flights recently, it’s offered by pretty much every single travel money company.
“Always remember that travel money companies make money in two ways,” Abrahams says, “the fixed transaction cost and secondly profit built into the exchange rate.” So really, when companies are offering you 0% commission, the reality is that they’re giving with one hand and taking away with the other.
The commission is a relatively small portion of the profits travel companies are raking in – the rest of it comes within the rate of exchange. Abrahams says it’s probably best to ignore the commission entirely, treating the exchange rate as the “most important cost that exists within a travel money purchase. Think of it as the “hidden fee”. As such, focus solely on the rate being offered.”
Unless you want to pay through the nose for your foreign currency it’s absolutely essential to do your research BEFORE you get to the airport – even if that only means a quick walk down the high street, or a few clicks through the best known websites. Travel money comparison sites; the Post Office; even leading travel agents are likely to offer you a better rate – at the very least you need to know what that rate is.
“A good travel money deal should be between 2 and 4 per cent away from the real, “mid-market” exchange rate” says Abrahams. If you don’t know what the actual exchange rate it’s going to be hard to know whether you’re getting a good deal or not.
In case you didn’t notice, airports are pretty expensive places anyway. When you’re paying that much for a sandwich, what makes you think you’re going to get a bargain for 500 euros? MyTravelMoney.co.uk’s mystery shopper visits found that travel money bureaus in airports could actually be taking as much as 10% from your purchase – in an airport 50 euros could get you a lot of duty free.
This extra 10% is concealed within the actual exchange rate offered by the airport bureaus, allowing them to advertise 0% commission relatively guilt free.
That’s not to say that travel money bureaus in UK airports are always a bad option. Abrahams has some advice to those who do still plan on making full use of airport facilities:
“As a pro tip, if you do want to use an airport supplier, book online and reserve for collection. It’s a very efficient service and will save you 5-8 per cent of the total value of your currency purchase,” he offers. Likewise, on some occasions the cashier might be open to negotiation. Abrahams says you should “never be afraid to tell the airport cashier you are not happy with the rate offered. More often than not, they will fight hard to win your business.” You could even ring the bureau before you arrive (if leaving it to the last minute was a conscious decision) and ask if you could take advantage of the rates offered on the company’s website. Even if you’re in the taxi on your way to the airport you might be able to reserve some money at the online rate if you’re lucky. It doesn’t hurt to ask.
The best money-saving advice for UK holidaymakers is that leaving everything until the eleventh hour isn’t always your best option; you could save a small fortune booking a hotel at short notice, and grab a bargain when it comes to last minute flights, but when it comes to currency exchange