Currency conversion losses in credit card bill due to merchant mistakes
An overseas merchant whom I have purchased from before made an erroneous transaction on my credit card bill. The dispute has been resolved and the money refunded. The problem is incurred currency losses as a result of the currency conversion losses. It amounted to a total of 6% of the transacted amount. I could buy several lunches with the loss.
Imagine if an overseas merchant were to make a wrong transaction of USD10k, then refund the amount, the currency conversion losses would amount to USD600. It is also not uncommon for some merchants to charge twice by mistake. I have heard of that happening in hotels when the staff is new and inexperienced.
I have contacted the merchant. They have yet to respond. I wonder what else can I do if the merchant stubbornly refuse to do anything.
What protection do credit card consumers have when this happens to them? Do we have to suck it up?
The credit card is issued in Singapore and the merchant is from the United States.
That is the correct thing to do. You should try to resolve problems like this with the merchant first.
No, you don’t have to suck it up. The charge was unauthorized and regardless of what the merchant says, you are not required to pay it. Your next step would be to report the unauthorized charge to your credit card company and your unsatisfactory attempt to get the merchant to fully compensate you for the losses that they caused you. They are required to do so.
If someone makes a mistake that causes you to suffer a loss, they are responsible for the full amount of loss they caused. The mistake is their fault, as they conceded, so the exchange losses you suffered as a result of it are also their fault because they flowed directly from it.
Yes, it’s bad luck, but that’s life. You can throw a rock 100 times and not break a window and you don’t owe any money. But if you throw it once and it happens to break a window, you’re paying for the window. Sometimes small mistakes have big consequences. Don’t like to pay for them? Be more careful.
Update: Let me rebut a comment to this answer as others probably feel the same way:
False. The merchant initiated the currency exchange by posting the transaction. Merchants know that sometimes they cause currency exchanges and, in this case, they did. The currency exchange was the direct, predictable, and automatic consequence of the merchant’s actions. If you make a mistake, you are fully responsible for its direct, foreseeable consequences, whether or not you intended them or were specifically aware they would happen.
Again, false. He contacted the merchant and told them what happened.
False. The merchant is responsible for any harm that directly flows from their mistake. This is a basic principle of law. If you throw a baseball and it happens to hit a window, you’re responsible for the broken window. This is true even if you can often throw a baseball and not break a window or if you didn’t immediately know you hit someone’s window. The merchant made a mistake, they’re responsible for the harm they caused.
Fortunately, you don’t have to. In pretty much every country, there are already laws that say that bank/card networks can’t attempt to enforce an unauthorized charge. The original charge was unauthorized, so it can’t make him responsible for any payment.
No, it ignores the attempt to obfuscate the simple facts that the merchant is responsible for the harm they caused and that the bank/card network has no legal authority to enforce a charge that is indisputably unauthorized.
If the transaction was without authorization, you have to dispute with your card service provider. The transaction should be nullified. In such cases the merchant gets flagged for unauthorized transaction.
In this case it looks like you have taken a service and then cancelled due to some reason and there is a refund. In case of refunds, Card Companies don’t take the risk due to Foreign Exchange.
Related question Exchange gain on credit card refund