Wednesday, April 3, 2013

Business Math + Banker's Math II: The Shoe That Didn't Drop

In my first installment in this series I recounted how Budget Rental Car padded their CEO's bonus by adding 4% to my rental bill in Italy for a foreign currency conversion charge, even though I thought I was avoiding it by using my Capital One credit card.  Apparently I had agreed to this fee when I signed my contract in Italy, though I don't recall reading it there and unfortunately I've misplaced the contract and can't check the exact wording.

I contacted Budget's Customer Service and asked how I could avoid this in the future, particularly since I had reserved two more foreign rentals, this time in Chile.  I'll let you go to the first blog the read the email exchange that ensued in which I received confusing and contradictory advice, ending with the rather astonishing admission that there is no universal policy about this fee:
Budget: Thank you for contacting Budget. Budget locations in Italy and in Chile are independently owned franchise locations and may have different policies in place which deviates from standard policy. As advised, renters are to make their currency request [my emphasis] at the beginning of the rental. We apologize for any misunderstanding or inconvenience. If we can be of further assistance, please let us know.
As I pointed out previously the problem with "making a currency request" is that in one Budget email I was advised to request that the charge be in local currency, and in another email told to request that it be in U.S. dollars.

I gave it one last shot by contacting the Customer Service people in Chile directly:
Me:  My wife and I have reserved Budget cars in two locations for our upcoming trip to Chile:  Santiago (#xxx192US3) and Puerto Montt (#xxxxx5US1). I would like to avoid any currency conversion charges for these two rentals by Budget.  My credit card does not assess these and I would like to take advantage of this feature.

 How can I be certain that Budget will not assess me currency conversion charges?
 After considerable delay I received the following reply:
Budget Chile:  Dear Mr. Richard Sherman: According your request, inform you that is difficult for us confirm that you will not have any currency conversion charges, because we do not have any control over foreign banks, also our values and charges are systematized, maybe you could leave the guarantee with your credit card and pay of lease in cash.
 Everybody clear?

My interpretation of Budget Chile's email is that either (a) they were being deliberately unhelpful and if I wanted to avoid the Budget charge I would have to obtain wads of Chilean Pesos to pay the final bill, or (b) they had no idea what I was talking about because they never levied conversion fees themselves, unlike the Budget folks in Italy.

I went ahead with these rentals last month when we visited Chile, mainly because Budget's rates were very competitive and because I felt prepared to do battle over this.  Each time we picked up our car I asked the agent if there would be any additional charge for converting Pesos to Dollars, and I asked the same question again when we returned the cars.  All four times the answer was "no."

Of course, the proof is in the credit card statement, and so I have been waiting to see what the final charge amounts would be, as compared to the official exchange rates. The answer is now in, and to be "fair and balanced" (I can't believe I just said that), I have to report that Budget Chile did NOT add a conversion charge!

The lesson here is to travel to Chile and avoid Italy.  No, wait -- that's not it.  The lesson is that we consumers have to be constantly vigilant about business and banking practices in order to avoid unnecessary and unjustified charges.  And we can't become complacent just because we think we are prepared, like my use of a fee-free credit card. This becomes really difficult when you're in a foreign country and foggy from jet lag, but that's when you're most vulnerable.

Confusion, complacency and lack of information are a banker/businessman's best friends.