International Exchange Rates

[torrle.livejournal.com]

Food for thought. What to do on refunds?

This thought just occurred to me and I'm curious what your views are.


Person A commissions Person B, who is from a different country.
Time passes.
Person B refunds Person A, but the currency exchange has shifted significantly.

Which currency rate does Person B refund an equivalent to?

Example 1: You're paid $50 on a commission, which worked out to $35 in his currency.
Now, on refund, that $50 you were paid is only worth $30 in their currency.

Do you convert back the same $50 (they get back less than what they paid), or convert more to make sure it works out to match what came out of their pocket (and costs you more)?


Example 2: You're paid $50 on a commission, which worked out to $35 in his currency.
Now, on refund, that $50 you were paid is worth $45 in their currency.

Do you convert back the same $50 (they get back more than what they paid), or convert less to make sure it works out to match what came out of their pocket (and costs you less)?

What should be the guideline on this?

Comments

[drake-anaya.livejournal.com]

I think it depends on why the money is being refunded.

If it's because the artist made an error (shouldn't have taken on the work in the first place, etc), then the buyer should be compensated fully in their currency.

If it's because the buyer broke the contract, decided to pull out, etc etc, the artist should only be responsible for refunding the amount they received in their currency and not to exceed what the buyer paid in their currency.

that way, the buyer isn't paying for the artist's mistakes/problems, and the artist isn't paying the buyer to be a hassle. :D

that's my take on it, though I'm sure others will have different opinions.

[kerstin-orion.livejournal.com]

That makes sense to me.

[vantid.livejournal.com]

That's what I was going to say.

[matrices.livejournal.com]

I state in all my transactions that its done in US funds..

This way, its simply the same amount to me (recieving or refunding). Weather their country's money has lost or made money on it, that should be irrevelant. I'm also careful about those sort of terms (i.e. transactions will be done in Euros) since I'm taking the risk that I will loose money if I need a refund.

That sort of statement "done in (specified) funds" is enough for me. Though I've never had a problem before...

[crssafox.livejournal.com]

That's a very good point. If the US$ is suddenly worth a different amount in another country's currency, it probably means the economics are going funky there. It's like... they might get "more money" back, but they may have to pay higher prices for things.

That's why it's a good idea to do all transactions in US$, rather than worry about conversion rates.

I see it more like this.

[sorethumb.livejournal.com]

You were only given $50, right?
Why give any more back? It's THEIR currency that's going down/going up.. (In fact, it might be going down 'cause they're investing in YOUR currency!)

The actual things here is currency which matters to you ($) and the picture which matters to them (picture). :3

Re: I see it more like this.

[growing-rose.livejournal.com]

Hear hear. I had to ask for someone to refund me the other day and hell, I even lost a dollar because of the transaction fee but then I realized she probably lost a dollar because of the transaction fee her way in the first place. :P

Re: I see it more like this.

[torrle.livejournal.com]

I wasn't given any money. I'm citing an example.

Why would it be 'just theirs' going up or down? Rate changes are due to things that happen on a global market.

Let me put this another way. Say you spend $50 on a commission to someone in another country. For whatever reason it later gets cancelled and a refund is arranged. As the currency rate has changed, you now only get back $45. Would you get pissed off? Would you not be expected to entitled to the original amount? Why or why not?

I'm gauging from your response whether or not you think that's acceptable. ;)

And really, I think money matters equally to those on either side of the bargain... but that's just me.

[gothwings.livejournal.com]

The individual should receive the full amount they paid in their currency should a refund be necessary, regardless of the exchange rate at the time of the refund.

Whether or not this makes the customer/artist richer/poorer is of no consequence. If the exchange rate is as it is at the moment with GBP versus USD then it may be advisable to state that it could take longer to obtain the full refund amount.

It may mean that either party is better or worse off, but that is the fair and responsible attitude.

The attitude of "well it's not my fault the Dollar/Euro/Pound is worth less now than it was" is unethical and should not be practised. If you do that, you will probably find yourself appearing here with a complaint attached to your name.

As always, Common Sense should prevail.

Well.

[sorethumb.livejournal.com]

I would have been disappointed, but it's my country's currency market that was the problem, not the artist's problem.
The same problem is found in any stock investment: if you invested in a company that declined in after you invested in it, sure you'd feel bad, but while the shares didn't change in value, what you invested in it did.
That's what I'm saying.

[hissylizard.livejournal.com]

If you charged $50 for a comission that is later cancelled, you should refund $50, regardless of what the exchange rate has done in the meantime. If it's improved, then good for them. If it's worsened, then sucks to be them. That is the way every transnational business will do things, and there's no reason for you to do different. You're an artist, not a money-market trader!

[thaily.livejournal.com]

I refunded a $200 commission once when I found that for some reason I just -couldn't- do it. The customer had been exceptionally patient but after 2 years I insisted I pay her back (even though she still wanted to wait, I had made sketches but none of them felt right to me). I paid her back $200, regardless of exchange rate.

Consider this though, exchange rate aside, the customer could ask that you pay them the interest too, which could suck if the commission was bought for a significant amount to begin with.

[silverfoxwolf.livejournal.com]

I've done a lot of internation transactions and normally I pay at the doller price exchanged from pounds sterling. Paypal can pay in dollers or pounds so usually I pay and recieve dollers from the US at whatever price is set.

It's like most things in money changing, soemtimes you win sometimes you loose. I will always stick with the price I paid being the price refunded.

[quoting-mungo.livejournal.com]

That's what I'd do, too.

Mind, I'd also advice a "good until" date on commission payments. I've got payments more than two years old I haven't been able to do the art for because the commissioner simply never gave me anything to work by.


-Alexandra