Booking travel? Beware foreign transaction fees

Many of my travel tips come from my own personal experience, or those relayed by my friends. Here’s something that happened to a friend last week:

Travis* was looking for a good hotel deal for a trip to San Francisco, and used one of my favorite sites: Kayak. Kayak is a great way to search multiple travel suppliers/resellers at once, especially for hotels. In many cases, booking directly with a hotel chain will get you the best possible price, especially for a pre-paid-in-full non-refundable rate. But many properties also make inventory available to wholesalers for good rates, which at times (especially in non-peak seasons) can offer lower prices. And Kayak will show you all available rates.

So Travis found availability at a particular hotel at which he’s stayed before, and Kayak displayed prices offered by several resellers — the lowest rate was offered by Skoosh.com. Travis clicked through to their site, which processed the reservation and gave him a confirmation.

A couple weeks later, Travis received his credit card statement. In addition to the pre-paid reservation for the San Francisco hotel was a mysterious $13 “foreign transaction fee.” Travis contacted his credit card company, and learned that the fee was associated with the Skoosh.com reservation. As it turns out, Skoosh.com is a UK-based company.

Skoosh.com's address

I took a look at Skoosh.com, and there is almost nothing on the site that would inform a user that they are based in the UK. Prices are displayed in U.S. dollars (there’s a drop-down that lets you change to another country’s currency); only if you were to look through the site’s “Contact Us” information or their liability disclaimer would a user see that they are in the United Kingdom.

So how does this affect you? There’s no difference in your reservation if you use a booking agency in another country — the hotel will still make a reservation for you, and the agency will provide you with a confirmation. But various credit cards have different procedures for handing foreign purchases. Some cards absorb these transaction fees (apparently, all Capital One cards do); others will pass along the transaction fees to the cardholder, typically 1% to 3%. And Travis’ card, apparently, passed this fee along to him.

Therefore, a couple travel tips you should know:

  • Check with your credit card company to see whether or not they absorb foreign transaction fees, or if they pass them along to the cardholder (and if so, what is the percentage)
  • When booking through a reseller, particularly one you’ve not heard of or used before, verify the location in which they operate their business. If you suspect they may be a foreign company, contact them to learn where your transaction will be processed.  (Although they may be home-based in another country, they may still have a transaction processor within the U.S.)
* – Not his real name…
 

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