Holidaymakers trying to get the best value for their Irish pounds when converting them to foreign currency face a bewildering range of exchange outlets.
Foreign notes and travellers cheques are now available everywhere from travel agents to department stores, and many such outlets are open late into the evening.
While plenty of competition is usually good for the consumer, such is the complicated arithmetic involved in calculating foreign exchange rates that the range of commission charges and currency rates available on the high street can be baffling.
In Dublin just £10 worth of currency in notes can cost anything from zero pence to £2.50. For cheques and drafts, the commission can be as high as £3.50. Rates at which notes are bought and sold can vary significantly from bank to bank, from day to day, and even sometimes from one branch of a bank to another. To further the confusion, in several outlets visited by The Irish Times last week, different rates were quoted on signboards inside and outside the same branch.
Perhaps the most controversial exchange rates of all are those of the Bank of Ireland's Dublin airport operation. The bank levies a minimum commission of £2.50 at the airport compared to a minimum of £1 in its high street banks. Exchange rates at the airport are in some cases less favourable to the customer than exchange rates in the bank's ordinary branches. Earlier this summer, Senator Shane Ross called on the Minister for Public Enterprise, Ms O'Rourke, to ensure there was competition for B o I at the airport. He told the Seanad: "The Bank of Ireland, like Aer Rianta, fleeces tourists for as much as it can get out of them because it has no competition in the airport. If there was competition, the margins between the buying and selling prices of foreign exchange at the airport would be immediately slashed."
Ms O'Rourke replied that she was unaware of the "Bank of Ireland monopoly at Dublin Airport", but undertook to "make enquiries" about it. A spokesman for the Minister subsequently told The Irish Times that Ms O'Rourke would like to see several banks given a chance to operate at the airport in the year 2000 and that she would make this clear to the chairman of Aer Rianta, Mr Noel Hanlon.
According to a Bank of Ireland spokesman, its franchise at Dublin Airport comes up for renewal every few years when other banks have the opportunity to compete for it. "The airport branch is not a high street bank and the rates and commission charges reflect that. For a start, it opens at 6 a.m. and doesn't close until 11.30 some evenings. It has to carry a complete range of foreign currencies, even the most obscure ones. Some of those foreign currency stocks mightn't be sold for six months, and their value might decrease in the meantime. The cost of staffing for such a long working day had to be factored in. The line between the operating costs and the profits of the airport operation is very thin."
Asked if Bank of Ireland would object to having a competitor at the airport, the spokesman replied that the number of franchises available at the airport was "a matter for Aer Rianta".
Elsewhere, the main banks largely mirror each other in terms of charges and rates and the most intense competition is to capture the public's imagination with a unique selling point. Marks & Spencer on Dublin's Grafton Street is an example of an outlet where foreign currency is being offered commission-free. In most of the main banks student and elderly customers are entitled to free foreign exchange. Allied Irish Banks is giving out coupons at its branches which entitle customers to a 50p discount on commission. Trustee Savings Banks recently allowed Tesco supermarket receipt holders to buy travellers cheques at the bank commission-free. TSB's travellers cheque provider also offered customers scratch cards which could win them a trip abroad.
Mr Michael Casey, head of treasury at TSB, says special offers are an important means of attracting customers.
"It's a competitive market. All the banks would tend to be looking at similar margins and they're matching each other in terms of charges." Companies such as Thomas Cook, which sells holidays and offers foreign exchange, provide a challenge to the banks because "they allow customers to complete all their transactions in one premises. It means banks have increased the focus on their own competitiveness".
Mr Casey says: "We're always looking for new ways of attracting people into our banks and to remind them that the service is available. It's no different from marketing a shop in that sense, you hope your offer will strike a chord with the customer." However, the charges that most surprise foreign travellers are often the ones that aren't advertised on colourful electronic boards in the window of your local bank. Credit cards have their own rate of commission, which is charged on every transaction you undertake abroad, usually at the rate of 1.75 per cent. The exchange rate is determined by your bank. Withdrawing money with an ATM card abroad will also incur commission of between 2 and 2 1/2 per cent.
While travellers cheques sometimes cost more in commission than cash transactions, they can be cancelled if stolen and the traveller has less opportunity to overspend in an unfamiliar currency. They can often be cashed commission-free when you return to Ireland if you go back to the bank in which you bought them.
If you plan to holiday in the European Union next summer, the good news is that rates should be more generous thanks to the arrival of the euro. The conversion rates of member states will be irrevocably fixed from January 1st, 1999, and the risk element for banks in buying stocks of foreign notes will be eliminated, giving them the scope to offer the consumer significantly better exchange rates.
