Bureau de Change
A
Bureau de Change is an organisation or facility which allows customers to exchange one
currency for another. Although
French in origin, the term is widely used throughout Europe, so that visitors can easily identify such facilities when abroad.
Bureaux de Change are often located inside
banks or
travel agents, as well as in international
airports,
train stations, etc. They make profit, and compete, by manipulating two variables: the
exchange rate they use to calculate the transaction, and an explicit
commission for their service.
The exchange rates charged at public
bureaux are generally related to the rates available to the banks themselves, but adjusted to always be in their favour. Indeed, a
bureau will often display a board listing separate "We buy" and "We sell" rates for each currency they deal in; this allows them to "sell" a currency (e.g. a UK
bureau converting
sterling to
euros) at a lower rate than they "buy" it (e.g. converting the euros back to sterling). To clarify this, imagine that the internationally traded rate on a particular day was 1.5 euros to every pound, making £100 worth €150; a
bureau de change might "sell" euros at a rate of 1.4 (so that £100 gets the customer only €140) and "buy" at 1.6 (so €150 becomes only £93.75); the difference makes the profit for the
bureau.
Commission is generally charged as a
percentage of the amount to be exchanged, subject to a minimum fee for small transactions; some
bureaux advertise themselves as commission-free, and then make up the lost profit through the exchange rates they offer. As an additional complexity, some
bureau offer special deals on either commission or exchange for customers returning from holiday with leftover foreign currency which was bought at that bureau - although this generally only covers notes, not coins.
In general, changing money at a
Bureau de Change before travelling can be cheaper than withdrawing it using a foreign
cash dispenser (through a system such as
Cirrus Network) or paying directly with a
debit or
credit card - although this varies depending on the bank/card issuer, and the type of account held. However, there are security risks in carrying large amounts of cash, especially for those travelling for extended periods (who are likely to need more money), to insecure locations, or taking insecure types of holiday, such as
camping. One alternative for such purposes is to buy
traveller's cheques.
In
2002 many
bureaux de Change reported substantial reductions in profits due to the elimantion of the currencies of the Eurozone (and being replaced by Euro). This is an income which they continue to be without.
While it is certainly true that bureaux de change do not generally like buying/selling coins of foreign currencies, they will often accept them, but at what could be described as an extortionate rate. This is due to the higher cost of storage, compared with banknotes. It is also due to the fact that, if they cannot sell them back to others, they will have to be shipped back to their origin (which would be much more expensive than notes)
The notable 1994 news parody
The Day Today featured a spoof
soap opera called
The Bureau, set in a "high class" bureau de change and run by soap-opera stereotypes (the arrogant boss, the gay man, etc.). In the programme, the soap supposedly replaced the
BBC Nine O'Clock News, and then failed to attract large audiences leading to it being sent on tour on the back of a lorry. This was a reference to the failed BBC soap opera
Eldorado.
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Exchange rate*
Digital gold currency exchanger*
Continuous linked settlement*
Financial instruments
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Gold standard*
List of international trade topics*
Hyperbolic coordinates*
Table of historical exchange rates*
Currency Pair*
Foreign exchange market
