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).

As an example, if the internationally traded rate on a particular day was 1.50 euros per pound, making £100 worth €150; a bureau de change might "sell" euros at a rate of 1.40 (so that £100 gets the customer only €140) and "buy" at 1.60 (so that it takes €160 to get £100); the difference makes the profit for the bureau. Their round-turn profit on these trades would be €160 - €140 = €20, or 13.33%.

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 bureaux 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.