How do airport currency exchange windows stay in business?
It is well known that the exchange rates offered by airport currency exchange windows are poor - see these stories from the BBC for example: Holidaymakers hit as pound falls (20 July 2018) and Tourist pound now down at close to just one dollar (14 Dec 2018).
I have been aware of this for a long time, and for the last 15-20 years of travel I have simply used my card at the nearest ATM when I arrive. I am therefore amazed that the windows manage to stay in business. Is there something else that these windows offer the traveller to make using them worthwhile and therefore keeping their business viable?
Best Answer
Maybe some people end up with some spare cash when they leave a country for good. Their choices basically are:
- Keep those bills as a souvenir.
- Spend them in Duty Free.
- Exchange them at the window to reclaim those money at least partially.
Since Duty Free's price policies rival those of exchange windows, it probably makes more sense to exchange your bills at airport's exchange rate.
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Are airports Good for currency exchange?
Currency exchange shops and kiosks in airports are not the best places to exchange money. For the best rates, try a local bank or a bank ATM to make your currency exchanges. Check to see if your U.S. bank offers foreign ATM fee refunds for using a foreign ATM.How can I avoid the exchange rates?
Exchange Currency Before You Travel. Open a Bank Account That Doesn't Charge Foreign Fees. Pay With the Local Currency. Finding Cards With No Foreign Transaction Fees.Does it cost to exchange currency?
Your bank's ATM network is likely the best option. You may be able to withdraw cash in the local currency with competitive exchange rates and low fees (1% to 3%). Use your institution's app to find an ATM near you. Try to withdraw larger amounts if your bank charges ATM fees.Is it better to exchange currency at home or abroad?
Although this depends on many factors, including which currencies you want to convert and which country you are travelling to, generally speaking exchanging your money AFTER you travel will provide you with a more favourable exchange rate. The rule is simple: the more common the currency is, the cheaper it will be.How to Exchange Currency | Why You Should NEVER do it at The Airport
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Answer 2
How do convenience stores stay in business when they charge much higher prices than supermarkets? It's easy -- they are selling convenience.
Similarly, airport money exchange counters are convenient, especially for people who trust cash more than electronic transactions (if I'm carrying cash it can get stolen, but it can't be used to drain my bank account), or for people who don't have good credit cards with reasonable foreign transaction fees. And there are still many places in the world where cash is preferred or is the only thing accepted.
If you've ever gone thirsty on a hot summer day when surrounded by street vendors selling bottles of cold safe water for cash-only you'd understand.
(Note: my analogy of convenience stores may not be globally applicable. Here in the US they are corner shops selling a small selection of merchandise at high prices, but they are easy to get to, don't tend to have checkout lines, and are generally open 24 hours a day. Many are located at gas (petrol) stations.)
Answer 3
Using an ATM internationally may require some pre-planning that most people don't do. As a savvy traveler, you probably already know what your bank is going to charge you for an international withdrawal, but I don't think most people do. You may have notified your bank in advance that you're traveling, so that they don't suspect fraud when an international withdrawal comes up, but I'm sure many people don't know that they need to do this, or just forget to.
Answer 4
Many (e.g. Travelex) also allow you to pre-book your cash for collection at the airport. The rates are much better (seemingly their own online rate, which, while not in the top 10 today, is quite reasonable). This provides a profit stream for the company, while for the user it provides convenience (you're hanging around there anyway) and peace of mind (collect potentially large sums of money somewhere secure).
Of course, the last minute travellers who don't (have time to) plan provide a good revenue stream for them, and it's a good idea to have some cash on arrival, though not as universally necessary as it was a few years ago.
Answer 5
They are convenient, well-branded, and trustworthy. Even an idiot (or first time traveler?) can easily get money there, whether or not they know the exchange rate is bad. A person with excess money may care more about the convenience than the poor exchange rate.
Sources: Stack Exchange - This article follows the attribution requirements of Stack Exchange and is licensed under CC BY-SA 3.0.
Images: Pixabay, Tima Miroshnichenko, Tima Miroshnichenko, Alexander Mils