New Zealand-bound HUGH SELBY was sitting on the plane when he realised he’d been stung in a currency exchange at the airport. It didn’t stop there… 

I knew it would cost more than other options. I’d been warned many times that it was always more expensive than anywhere else.

But I did it anyway and I got stung.

Fortunately, following a series of emails, resort to a tribunal, and belated commercial common sense, I can smile.

What remains is to share with you what I learned so that you and yours avoid the traps that caught me.

Being able to pay for things when you go overseas is as much necessary preparation as a current passport, visas, travel insurance and international roaming or a travel sim on your phone.

So, you check out your debit/credit card options, think about whether you need a travel card preloaded with one or more foreign currencies, and finally: “How much foreign cash should I take with me?”

The large shopping malls often contain an outlet for travel cards and cash. Australia Post also offers this service. A search on Google quickly brings up a range of competitive providers. Purchases can often be made online.

Simple, straightforward, but not done in time by so many people: hence Sydney International Airport has a surprising number of kiosks buying and selling currency, all run by the one company that operates worldwide.

I decided, at that airport, that more overseas cash would be handy.

If I truly needed more cash, the better way to get it was to use my pre-loaded travel card in an ATM at my destination.

Foolishly, I went to one of the kiosks. The kiosk employee was efficient, debited my card, counted out the overseas currency and gave me a printed receipt.

It shows what I paid, an exchange rate, what I received and that there were no fees. 

Given that one Australian dollar is worth more than one New Zealand dollar, in simple terms I was expecting to receive rather more NZD than shown on that receipt.

The “cost” of this transaction only dawned on me as I watched the inflight movie. 

I had paid $A603 and received $NZ545. The easiest way to see the “charge” for this transaction is to convert that $NZ545 back to AUD at the then exchange rate: 1 NZD = 0.9162 AUD. That is, $NZ545 = $A499.

Hence I paid $A104 to convert my $A603. That’s 17 per cent.

Believing that the employee had made a mistake by treating my $A603 as $NZ603 and converting that amount into AUD, that is, $NZ603 = $A552, but allowing for a lower exchange rate to get $545 (as shown on the receipt), I decided to ask for a refund (of what I saw as the underpayment) when we came back to Sydney.

I did so. The kiosk employee was less than helpful.

A number of emails followed between me and their “customer service”. They repeatedly claimed: “Our selling rate for NZD was 1 NZD = 1.107571 AUD… this means $A1 = $NZ0.902876.” That is, $A603.63 X $NZ0.902876 = $NZ545.

And there, at last, the explanation. Where the receipt shows “Exchange Rate”, it does not say what that rate means: is it a buying rate or a selling rate? 

I understood it as the rate at which the company would exchange my AUD for NZD. Not so. Nowhere on that receipt, nor at any time while I was at the kiosk, was it made clear that a very different, and much more expensive to me, rate was being applied.

Peeved and aggrieved I pursued a refund in the NSW Tribunal. For reasons unknown to me the company failed to show up for the hearing.

The Tribunal awarded me the “shortfall” between what I got and what I expected to receive, as well as the Tribunal filing fee and the fee charged by ASIC to provide a company’s registered address (to which documents for litigation can be sent).

Because I knew that email was going to be much quicker than mailing the Tribunal orders, I emailed those orders to “customer service”. Their response was so different to my earlier experiences with them.

Within eight days they had paid my full claim, drawn up a brief agreement to put everything to bed, and had the Tribunal decision set aside. Where there’s a will there’s a way.

Looking back on this short saga (litigation completed in 2.5 months is very quick) I see two clear reasons for it occurring. First, I was stupid to do a foreign currency deal at an airport when there are so many cheaper and readily accessible options. Second, the details on the company receipt are misleading. 

Just as my conduct has changed, so must the company’s. I get it that manning kiosks, especially at an airport like Sydney, requires a tidy profit on each transaction. That said, a simple change to their paperwork – one that made clear the rate being applied – could do much to improve their image, decrease complaints, and avoid litigation.

Legal affairs columnist Hugh Selby is a former barrister. His free podcasts on “Witness Essentials” and “Advocacy in court: preparation and performance” can be heard on the best known podcast sites.