Hotel Booking Scam

[Guest BKKvisitor]

While in the process of booking a reservation through Hotel2Thailand.com I saw a notice that I would be assessed an additional fee for using a credit card. I believe it was 3.75% for a VISA or Mastercard and over 5% for AMEX. I had never encountered this before and, of course, refused to proceed with the reservation process.

 

I believe that I will stick with Asiarooms where I have always received good service and value.

[Guest namjai]

They seem to be charging you back the fee from the credit card companies. My store is charged 2.25 % for visa/mc and 5% for American Express. While I would love to charge my customers for this there is no way I would. Part of the expense of doing business.

[Guest Trongpai]

You have to shop around to find banks that are not charging the "international service charge". It's generally listed in a document often called "the schedule of fees" and goes by different names.

 

One of my banks that issued me an ATM card was linked to Visa and although the bank did not list an international fee, visa did. Some of the internet banks do not charge but that can change at the drop of a hat.

 

Do a search on bankrates.com (USA banks only) to sort banks and then click on each bank to check all the fees.

 

I am on an old contract with Citibank mastercard and don't get charged a fee until 2008 when I either agree to the charges or they drop me.

[khaolakguy]

The charge referred to is nothing to do with International service charges. It is the charge applied by Credit Card companies to suppliers. Credit card companies do not believe that this should be passed on to customers but should come out of the suppliers profits, however I have regularly found, in Thailand, that smaller businesses pass this charge on to customers. Low profit margins perhaps excuse this??

[Guest wowpow]

The credit card companies have mostly insisted that retailers do not impose an extra fee on their users. However the practice seems to be growing and is prevalent in Asia, particularly with smaller traders.

 

I not that IKEA in the UK - and presumable worldwide - are charging a credit card fee. There is no charge for direct debit.

 

I used to be very anti additional charges but on reflection,there is a certain logic to it, especially for large purchases. If the trader says it is an expense of the business then everyone pays for it whether they use one or not. If the credit card user pays the fee then, prices can be lower and the charge goes only to those who use the service.

 

The historic reason traders did not pass on the fees was that they expected to increase their business by offering payment by credit card. Now virtually everyone does.

 

A 'scam' is a dishonest scheme or intent to defraud. Hotel2Thailand can hardly be accused of that when they openly declare their charge.

 

[bkkguy]

The credit card companies have mostly insisted that retailers do not impose an extra fee on their users.

 

under recent Australian law changes the retailer is now free to charge extra fees for credit card purchases and the practice is increasing

 

bkkguy

 

 

[Guest BKKvisitor]

IKEA my be adding a credit card fee in the UK, buy I believe that it is illegal to charge a purchaser a fee for how they chose to pay for items in any state in the US.

 

Given the protection provided purchasers using credit cards compared to all other forms of payment (at least by US banks), I wouldn't be too quick make a direct payment in advance for goods or services unless I knew and trusted the seller. Direct payments is Ebay's greatest headache.

 

The lessons here are plain: (1) read the contract and (2) talk with your feet.

[Guest Pearl69er]

This is been going for a few years now BKKvisitor but those percentages seem to have got out of control. I think most businesses really want to push peple into using eftpos cards or cash.

[2lz2p]

You have to shop around to find banks that are not charging the "international service charge". It's generally listed in a document often called "the schedule of fees" and goes by different names.

 

I agree with the poster that noted using the term "scam" when the site clearly notes the fee will be charged is inappropriate. As mentioned by others on this thread, it is very common in Thailand for businesses to add the percentage charged to them by their bank for using a credit card, e.g., several years ago before retiring in LOS, I stayed at the Lek Hotel in Pattaya -- they had a clearly posted sign that an additional percentage (4% as I recall) would be added for credit card payment.

 

Some places that do not add the charge are major department stores (Carrefour, Lotuc, Big C, etc.) and some other establishments. BUT, the purpose of this post relates to ANOTHER RECENT PRACTICE by some larger businesses that one needs to be aware of -- depending on the amount of "international" conversion charge made by your credit card company - the exchange rate they use, and the amount exchange rate used by the business doing the transaction, the practice could be either beneficial or detrimental. I have encountered it so far at: Bangkok Pattaya Hospital, HomePro, and IT City (top floor at Tukcom).

 

If you use a credit card (at least from USA, don't know about UK, Australia, etc.) at the mentioned establishments, they will print out a credit card slip in "dollars" instead of baht. The slip usually shows the conversion rate, which is 1 to 1.5 baht less than the going bank rates. Since I have one credit card that does not charge an international conversion fee and the exchange rate is close to the published bank rate, I use that one here in Thailand -- not often, but do so when it is a large purchase or my quarterly visit to BPH (with 90 day supply of medicine, it runs around 18,000 -20,000 baht).

 

What I don't like is they don't ask you in advance which you prefer - US dollars or baht - at IT City, they didn't know how to cancel it and redo it in baht -- at homepro, the cashier had to ask for help, but they were able to cancel the "dollar" transaction and then use "baht.". Now, if using the card, I try to remember to ask for charge to be in baht when using those establishments or other places that might have switched to this system -- needless to say, using dollars is advantageos to the business as they "collect" a fee of 1 to 1.5 baht per dollar (not sure if this extra income is shared with the credit card processing bank/company) -- so, it will not surprise me if more and more busineses don't switch to this method.

 

 

 

 

[Guest BKKvisitor]

There was much discussion about a year ago on another board about the practice of billing in dollars (or pounds, or euros, etc.). This always works to the advantage of the seller, as the previous poster noted. LESSON: examine the charge receipt and don't sign it unless it is in the local currency. This is a scam and it's not restricted to Thailand.

 

The other issue noted above is the fee that most banks are now charging the credit crd customers for international charges. To the best of my knowledge, Visa and Mastercard levy a 3% charge and AMEX a 2% charge. But some banks (not many) do NOT levy any charge.

 

For those of us who do use credit cards for international charges, it's a good practice to ensure that the bank used the correct exchange rate for the date the charge is posted. You can check this on the following website:

 

http://www.oanda.com/convert/fxhistory

 

I've had three charges in the past year computed at an incorrect rate. All three were reluctantly amended when it was called to the attention of the credit card company.

 

[Guest fountainhall]

BKKvisitor must be mistaken on the additional charges. The supplement for paying by Amex in Thailand is traditionally higher than VISA by at least half to one percent.

 

Another point to consider on conversion rates. Although I live in Thailand, I choose to keep my cards based outside the country, partly because my main VISA card gives me a 50% increase in the air miles I earn when used outside country of origin (my Amex routinely has this 50% now for spending anywhere). Even taking into account VISA's conversion rates. I regularly do the math and, as a frequent traveller, reckon I come out slightly ahead most times. I will only pay the extra percent to use my Amex card in Thailand if there is a special reason. For example, for a couple of months this summer my local Amex added a further 66% to earned mileage for use 'overseas'.

 

I know some will query: is it really worth it for air miles? For economy tickets, I think probably not, if only because prices ex-Bangkok are so relatively cheap. But if miles are used for long-haul business class, the answer is unquestionably 'yes'.

[Guest Aunty]

Still these credit card charges are very annoying, and how else are you suppose to pay for accomodation booked via one of these internet sites anyway? And given that these are all electronically done anyway, it does seem an easy way to screw cutomers out of a few extra baht to me. Add an extra 3% for this, 5% for that, and 2% for something else, and these rates don't look so cheap after all.

[Guest BKKvisitor]

BKKvisitor must be mistaken on the additional charges. The supplement for paying by Amex in Thailand is traditionally higher than VISA by at least half to one percent.

 

 

There may be some confusion here. The US bank that provides my AMEX card adds 2% of charge total as fee for conversion. The US bank that provides my Mastercard adds 3% of charge total as a fee for conversion.

 

AMEX does charge the business more than Visa or MC (as noted earlier) for "processing" the charge.

 

A to the advantage of using a booking service compared to dealing directly with the hotel, it's determined on a case-by-case basis. If your talking about the major hotel chains, you're generallly--but not always--better off dealing directly with them. But with some of he independent hotel and serviced apartments, you're better off with a booking service in most cases (exceptions exist like Tarntawan Place).

 

I've used many different booking services. In my experience, Asia Rooms provides the best value. There are no "add on" fees (taxes, service charges are all included in the posted daily rate). You an choose to view the rate in baht, pounds, euros and other currencies.

 

[Guest Trongpai]

IKEA my be adding a credit card fee in the UK, buy I believe that it is illegal to charge a purchaser a fee for how they chose to pay for items in any state in the US.

 

That true in USA for a transaction in USA. If they want to charge you a 3% service charge, and they are willing to give you a bill saying that it's a surcharge for using a bank credit card, Mastercard will credit your account.

 

Good luck getting a bill listing the charge. One way they get around it is to offer a 3% discount for cash. Sort of like farang pricing, your not getting charged more, Thais are just given a discount.

[Guest fountainhall]

The US bank that provides my AMEX card adds 2% of charge total as fee for conversion. The US bank that provides my Mastercard adds 3% of charge total as a fee for conversion.

 

Sorry for misunderstanding your point about deductions, BKKvisitor. I am amazed that US banks get away with such large deductions. My Amex is issued directly by Amex and VISA by a major bank. Both cards are based in Hong Kong and conversion rates run around 1% - 1.5% maximum. Compared to the conversion charges for cash - and the convenience, these are entirely reasonably in my view. I do know there is a debit card in the UK which waives all currency premiums on overseas transactions, but can't recall the issuing bank's name.

[Guest ToyFan]

My Mama Told Me, You Better Shop Around. Those fees add up big time.

 

Now the interest rate on Cash Advances is often less than that on purchases. I have before me a 'promotional' offer for a cash advance @ .0% until July 1st (At which time it goes to the rate for purchases) or 4.99% for the life of the loan\until fully paid off.

Even with a 'Transaction Fee'*** of, typically, 3%\Min $10\Max $50.00 - $60; this may work out less than the rate you may be charged for purchases and less than what your investments are earning.

So, even at home, take the Cash Advance, deposit it & pay in cash.

 

When going to Thailand, do the same but, not only that; check with your bank because it may offer free travelers checks to those over a certain age*. It may be as low as 50 but at some it is 55 or 60.

The Currency Exchanges give a better rate for travelers checks.

Get the checks in large denominations, $500 or $1,000** because, in addition to the percent Thai currency exchanges charge based on the monetary amount of the transaction, there is a per-check charge, same per each check whether you cash a 20, a 100 or a 1,000.

*Auto Club offers free travelers checks for members as may some other organizations & credit unions.

** You may need give the bank or auto club up to a weeks notice that you want large denomination checks as they may not keep them on hand.

** Some banks require you join a 'Seniors Club' (Which may carry extra advantages, like discounts.)

 

***Many credit card companies are now charging a fee equal to the Cash Advance\Transaction Fee every time you use an ATM. The only notice of this change may have been on one of those small folders, you may have thrown away unread, that come tucked in with the statement announcing 'changes to your card agreement.'

 

American Express Travelers Checks are insured but they will no longer replace them overnight. A friend lost a bag containing all his T' checks & credit cards, passport\visa, tickets...He went to the (Main) Bangkok office. AmEx found the bag and everything was still in it.

.

[Guest BKKvisitor]

Thanks to all who offered great advice and insight for international travelers. I want to add one more item about the used of credit cards in general when traveling abroad:

 

Don't use cards for minor purchases, meals, bar tabs, etc. Not only are you incurring extra costs, you run the risk of having your card information stolen. And with Big Brother watching (see other post about the fellow from the UK) using a credit card creates a paper trail of your movements.