Last night BBC Watchdog investigated the difference in exchange rates offered from the same providers at various locations throughout the UK and revealed that the same providers can offer up to a 40 Euro difference (when exchanging £500 into Euros) between branches.
Riz Lateef at BBC Watchdog explained how exchange rates are determined internationally by global factors such as economic growth, inflation and political stability. During the past 12 months the British pound has fallen in value against 80% of the major currencies around the world making it far more expensive for us Brits to go on holiday.
The exchange rate you will receive when you purchase holiday money will vary due to the factors mentioned above and the rate offered by each currency provider will differ slightly depending on their costs and profit margins.
Or so you would think........
BBC Watchdog contacted the 10 leading currency firms and revelled that the same provider does not offer the same exchange rate across the country. On the same day they found that the Post Office, Thomas Cook, No.1 Currency, Ice PLC, American Express and Travelex offered different exchange rates at different locations across the UK.
When exchanging £500 into Euros with No.1 Currency you would receive 572 Euros if you visited the Cardiff branch where as up in Glasgow on the same day you would receive only 566 Euros.
The Post Office offered 565 Euros in their Camden London branch but only 555 Euros in Leeds. Thomas Cook offered 570 Euros in Cardiff and only 537 Euros in their Newcastle branch.
Exchange rate differences weren't based just on regional differences, the BBC programme found a difference within cities from the same currency provider. For instance when exchanging £500 into Euros, Ice PLC offered 574 Euros in their Earls Court, London branch but 3 miles away in Westfield you would receive 564 Euros.
When the major firms were asked why exchange rates varied from one location to the next it became clear that local competition was a major factor.
But is this fair on you?
If you live in an area with numerous currency providers up and down the high street you are likely to get a getter exchange rate and have more money to spend whilst away. However if you live in an area with fewer bureau de changes you are likely to get a worse exchange rate.
Airport currency providers have even less competition and will offer you a much worse exchange rate to convert your cash. Watchdog was unable to confirm which airport provider offered the best exchange rates as they also vary depending on location!!
If you were to convert £500 into Euros with American Express you would receive 536 Euros at Edinburgh Airport or 510 Euros in Birmingham Airport. Travelex offered 537 Euros in London City Airport or 513 Euros at Liverpool Airport whilst Ice PLC offered 560 Euros at Norwich Airport and 520 Euros at Luton Airport.
Riz Lateef confirmed "If you are unprepared changing money can be the same as playing a game of chance. Exchange on the wrong day with the wrong company and in the wrong city or airport and you could end up losing out."
However there are simple steps you can take to ensure you don't suffer from the pitfalls of this unfortunate post code lottery. Nick Trend Consumer Editor from the Telegraph Travel recommends that you "order it (travel money) online in the UK before you go..... For the very best deal make sure you pay all of your big bills such as eating out using your credit card." (Remember to pay the balance off of your card at the end of each month to avoid any charges and never to use your credit card to withdraw money from a cash machine)
We have found that nearly every currency provider offers a better exchange rate online than in branch. If you order in this way to can avoid the post code lottery and get more Euros or Dollars for your pound. The major providers such as Ice PLC an Travelex offer an airport collection service so you can order online and collect just before your flight to save time and still get the best exchange rate.
On the high street the Post Office offer preferential rates to customers that purchase online for branch collection.
Our travel money comparison table can show you who is offering the very best exchange rate, you can order your currency online and choose to have it delivered to your home address or arrange for branch collection.
Watch the BBC One Watchdog Travel Money Episode