Be careful using Travelex’s ‘buyback guarantee’

Once upon a time foreign exchange company Travelex used to offer a proper ‘buyback guarantee’ when you bought foreign currency from them. For an additional few pounds on top of the normal commission charge, you got a guarantee that they would buy any foreign currency you had left on your return at the same rate you paid for it. It was a service I often used when changing money at airports.

I hadn’t used Travelex for some time when I went to Denmark at the end of October. At Heathrow, as I had done so often in the past, I went to Travelex to buy, on this occasion, Danish kroner. I asked for a buyback guarantee, paid over the usual additional fee, and was told this would mean I would be able to change my money back at the ‘spot rate’ on the day. I assumed this meant the rate might move a bit in my favour or a bit against me.

Imagine my surprise when I tried to change back my remaining currency using the buyback guarantee, and found I was facing a loss of 27% (!). When I remonstrated with Travelex staff, they told me that a thrusting new CEO had moved into the company and that this virtual destruction of the buyback guarantee was one of his initiatives.

I wrote to Travelex to complain and said I felt I should have been warned at the outset that the ‘buyback guarantee’ no longer protected the customer, but they dismissed my comments, saying only that they would in future ask staff to ‘clearly communicate exchange rates before a purchase is confirmed’. If this means anything, it should require staff to say something like: ‘please be aware that purchasing this buyback guarantee will not protect you from suffering a substantial loss of perhaps 25% or more on any money you change back.’

Has anyone else had a similar experience to me?