Agoda Pay Later: How I ended up paying more at Agoda?

Hey, folks. If you are using Agoda to make your hotel booking, are you aware that you may be charged more if you choose the Agoda Pay Later option? Read on and I’ll share with you my recent experience and how you can avoid such unexpected charges.

This is a public service announcement as I did not intend to churn out any post just before a trip – I have too many Travel To-do items to clear. Hope this post will help someone save some money when planning their travel.

Agoda Pay Later pin

 

History: I’ve been a fan of Agoda since eons ago

I have been with Agoda for many years, probably even before they became this popular. Their platform has consistently produced lower prices when compared to other hotel booking portals.

However, since 2017, I found myself having to deal with a premium charge of about 7% compared to the price that was shown to me during booking. This puzzled me as I have always been using the “Free Cancellation” option. And it had never created a price variance that would cause me to sit up, let alone to write a blog post on it. 

7% in hotel fees isn’t exactly a negligible cost when we are talking about hundreds of dollars in payment per transaction.

 


Not easy to know I was charged more by Agoda

As someone who is into finance and investment, I do keep a record of my expenditure. If I didn’t, I honestly wouldn’t have noticed the price variance charged by Agoda between “Booking Date” and “Charged date”.

By the time my card was charged (weeks or months later), my memory had failed me as to the amount presented during booking confirmation. I tried using Agoda’s portal to trace my bookings, but could no longer see the “Old Price”. I could only see one price, i.e. the new (and higher) price that they charged to my card.

When the old price was no longer viewable, there’s no easy way to know that I was paying more. Luckily, I’d manually recorded the price in my Travel excel sheet when making the booking.

An example to help you visualize the scenario

This is an example to help you visualize the scenario.

  1. On 8 January, the booking was confirmed at S$500 using ‘Free Cancellation, Pay Later’ option
  2. On 22 January, S$535 was charged to credit card – that’s $35 more than what consumer had agreed to
  3. Customer’s Booking history now only reflects $535. He can no longer see the $500 that he had earlier agreed to.
  4. He may not be able to recall or verify that there was indeed a $35 premium to the new price

 


Why Agoda charged me 7% more than the price shown during booking? 

After noticing the 7% premium charged to my card, I gave Agoda a call. Here’s why I was charged more and how you could avoid facing a similar situation.

Agoda’s representative told me that it was because I had chosen Free Cancellation, Pay Later option which was open to currency fluctuation. I fully understand because when I’d decided to take up that option, I was prepared for currency variance, but didn’t anticipate a 7% fluctuation within two weeks. 

I would have bought his argument if I wasn’t attuned to finance or investment. “But JPY-SGD only fluctuated within a 1% band. Why did Agoda charge me 7% more?”, I asked the local representative.

For those who are into investment, you would know how the Japanese Yen is a stable currency which many buy into when hedging their position.

Agoda Pay Later

Reason No. 1 offered by Agoda Rep

The patient Agoda representative then explained that the rate I saw online was the wholesale currency rate. Actual rates used by organizations and banks would be less attractive. Well, of course, I understood this concept.

So I added further, “Yes, I’d used wholesale prices 2 weeks ago to compare against forex wholesale prices of today. It’s within a 1% variation.”

Reason No. 2 offered by Agoda Rep

He then explained that banks could charge more on their end resulting in a higher fee. This didn’t seem like a valid explanation to me because I would be charged by bank whether I opt for same-day payment or Pay Later option. In either case, banks need to earn – so this is a constant to me.

“Do you mean the bank would charge me less if I’d chosen the “Pay Now” option?” 

Reason No. 3 offered by Agoda Rep

Obviously, he couldn’t continue this reasoning with me based on logic because I think he knew deep down that I was charged more than what I should have been charged for.

He replied, “I can only share that there is overhead costs when you choose to Pay Later.”

What he said above was very vague, but I think he might not be in a position to share too much. As a consumer, I can only interpret this as a confirmation that Agoda charged more than the currency fluctuation to compensate for the additional resources required to provide this Pay Later option. However, to a consumer, we weren’t told we would need to pay anything more than actual currency variance. So this, in my opinion, isn’t fair to consumers.

I didn’t say much thereafter and was surprised when he volunteered to give me a refund of the nett difference. But he made me agree that this was a one-off concession.

 


How do you avoid being charged a premium?

Does it mean you will be charged a premium whenever you choose a Free Cancellation booking option at Agoda?

Agoda Pay Later pin
Choose this option and you’ll likely end up paying more

It depends. If you choose a Free Cancellation, Pay Later option, you would likely be paying more (quoting what the Agoda customer representative told me). Based on my experience, it’s about 7 times more than the actual currency fluctuation. This happened to my last two bookings (Phuket and Japan) since 2017.

The way to get the price you see during booking while still enjoying free cancellation is to opt to PAY NOW instead of PAY LATER.

What does ‘Free Cancellation, Pay Now’ option mean?

Even if you choose to PAY NOW, you can still enjoy free cancellation. That would help to lock in the price as promised by Agoda.

One thing remains unclear – if I cancel later, will I receive a refund of the actual amount deducted or those subject to Agoda’s currency rate (which doesn’t seem attractive). That is, will I receive $100 or $93 (7% less)?

 


In a Nut Shell, avoid using Agoda Pay Later option 

Things seem to have changed because I didn’t experience such wide price swing previously with Agoda. If you are firm on your hotel decision, it may be cheaper to choose either Book Now, or Free Cancellation > Pay Now.

Will I continue to use Agoda? 

Yes, as long as Agoda offers me the best price as compared to other booking portals. So far, Agoda seems to be able to beat the market. I just have to be very careful when confirming the booking. I will refrain from selecting “Pay Later” option in future.

If I am not at the stage of committing to the hotel and prefer some flexibility, I may book using other booking portals, such as Booking.com.

Travel & Save: Enjoy 10% savings at Booking.com when you book your hotels through this special link.

Am I happy with Agoda?

I think things can be spelled out clearer to prevent any misinterpretation or misrepresentation. When a hotel portal advertises “Free Cancellation: book risk-free and lock in this great price today”, it isn’t clear that this ‘price lock-in feature’ would be void if a customer chooses to pay later.

Furthermore, is there a need to charge 7% more when actual currency fluctuation is just a fraction of that (1%)? I did not receive a clear explanation on this.  

Agoda Pay Later

There is certainly room for improvement! Or perhaps the fault lies with me getting way too comfortable with Agoda, having used it for many years without any problem. Maybe whatever happened was indicated in some fine prints that I’d missed? Did you notice something written about this in Agoda’s fine prints? Do you read fine prints? Do most customers read full terms and conditions? ;)

For curiosity sake, I just skimped through that whole page of T&C and didn’t find anything relevant. 

Hope this post that I churned out in a hurry would help you save some money. Share this post with your family and friends to help them too (share button on the left or bottom of this article). Chat soon and see ya!

 


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12 thoughts on “Agoda Pay Later: How I ended up paying more at Agoda?”

  1. Hi, thank you so much for this. Lucky me to stumble upon a thread in Tripadvisor regarding Agoda. Anyway I`d like to ask you a few question if that`s okay.

    1. In My Booking page on Agoda there is a statement like this, below the total price.

    You will be charged the IDR equivalent of MYR 995.65 on your pay date of Friday, July 12, 2019. Exchange rates may vary.
    Included in price: Service Charge 6.6%

    According to that statement, will I pay an amount equal to MYR 995.65 on the deadline given (fee inc) or MYR 1066 (995 + 6.6% fee)?

    2. Booking.com or Agoda.com is best in terms of price transparency? No hidden fees etc

    Thank you.

    1. Hi Donny, thank you for stopping by.

      1. Based on what you have indicated, I will interpret it that the price MYR995.65 is inclusive of service charge, i.e. MYR995.65 should be the fee to pay. However, the statement also indicated that it’s subject to exchange rate fluctuation. So you probably wouldn’t know how much you will be charged until your card is deducted.

      2. I have only recently resumed using booking.com because Agoda consistently produced the lowest fees until the recent experience. One thing you may like to know, both of them are under the same company, i.e. Priceline.

  2. My wife and I just went through a very similar experience with Agoda. My experience in complaining was similar to your own. Little did Agoda know I have a background in Mathematics and worked in Forex in New Zealand a long time ago. My own calculation is that we were charged 7% more (the same as your own calculation) for our booking in Myanmar than we should have been AFTER allowing for exchange rate variation between the time of booking and when the credit card charge was put through. My phone conversation with Agoda initially seemed promising but in the end I just got an email a couple of days later stating something like ‘exchange rates vary’ etc. much as you did. A google search of others having similar issues produced pages of results and led to your article.

    I can’t be bothered pursuing it further with them over just a few dollars though I suspect if I went back over earlier bookings I’d have found the same discrepancy and found that we’ve been done out of a lot more than that if I added it all up. I will simply cease to use Agoda and encourage others to do the same.

    In future, we will be using booking.com as their policy (when we’ve used them before) is to be far more transparent and honest and it is easy to reconcile their charges as they charge in the hotel’s currency and let you are your credit card company worry about the exchange rate (which you then see on your statement). I’d rather pay a bit more to use an honest and transparent company than continue using a company that is misleading (the best I would say) in their charging practices.

    1. Thanks for sharing your experience, Mark. It seems to confirm that “Pay Later” will definitely increase the fee no matter whether the Forex move against or in our favor. It wasn’t like this in the past, and its seems to me like a relatively-new profit-boosting practice.

      Yes, I think a lot of people wouldn’t even know they have been charged a higher price as audit trails available to consumers are gone. Also, many who are not into Finance or Investment would just accept the reasons provided for the variation. I used to use Booking.com years ago until I found Agoda offering a better price. Perhaps, it’s time to relook at Booking.com again. :)

      1. My wife and I have been talking about all of this a bit further today. I think we will continue to look at Agoda as well as Booking but I think we will likely be making future decisions on which to use for an individual booking based on the Agoda price possibly being 7% (or more) greater than what is stated on their site because of this hidden practice. Frankly, unless Agoda is at the very least a generous 10% less (and preferably a LOT more than that) than the Booking price, I’m always going to be inclined to choose the company that is honest in their dealings with customers (Booking) and not use the one whose policy seems to be to mislead intentionally (Agoda).

        The lack of an audit trail with Agoda has always been one of those back-of-my-mind concerns I’ve had and now I know why it has always bothered me. Booking.com are clear in what they do: when the transaction comes up on our credit card statement, I can see the charge in the foreign currency from Booking or the hotel directly and make sure it is the same as what we booked. (I then see the credit card company’s forex rate and then finally the NZD figure of course; all very transparent and I know I’m not being cheated)

        I also had a conversation today with a friend who used to see it from the other side of the transaction: he ran a hotel in Australia. He had warned me ages ago about all the problems he’d had with Agoda when dealing with them and how much easier it always was working with Booking. I got a very much deserved “I told you so!” from him this morning.

        We’ve had a number of other niggling concerns with Agoda over the last couple of years we’ve used them but I don’t want to complicate things by getting them into them here. We never had issues with Booking and will be happy to use them again in future. Ironically, of course, they are both part of the same big company!

          1. Unfortunately … and I really hate to raise this possibility … the explanation might be that one is run out of Asia (i.e. Agoda) and the other is run out of the Netherlands (Booking). Is the explanation of the vastly different ways they treat their customers as simple as that? It would be sad if that were the explanation.

          2. I’m not quite sure about the regulatory difference in different regions of the world. Maybe someone who is familiar can shed some light.

  3. I’m also dealing with this issue at the moment! Adding my experience here just in case it stops others from falling victim.

    I had made a “Pay Later” booking for a hotel in Thailand a few months ago, I had to call Agoda today to update my credit card for the booking as the original one had expired. I was told once the credit card details were updated I would be charged instantly (wasn’t an issue for me), however they also said they can only charge me in my credit card currency (AUD) rather than the local currency of the hotel (THB), this is where I got a bit suspicious. Based on the locked-in rate of 18,146 THB they said I would be charged $825 AUD, I quickly checked the exchange rate (XE) while still on the phone and it should have been $750, I questioned why their exchange rate was almost 10% worse than XE on the very same day and they could not provide an explanation, I even escalated to the supervisor and he also couldn’t explain.

    I could understand perhaps a 2 – 3% mark up on the XE exchange rate but 10% is just ridiculous, it sounds like they are fabricating the exchange rate as he quoted the price before even charging my credit card. For larger bookings this can cost someone hundreds of dollars.

    Valuable lesson learned, DO NOT use the “Pay Later” option!

    1. Hi Chris, thanks for sharing your experience with the online community. It’s certainly not fun to be quoted a 10% premium over the actual Forex. I’ve checked on my end and you’re right, the wholesale rate is just AUD750. Marking it up to AUD825 sounds hefty and unreasonable.

      Just to clarify, what was the amount that was supposed to be charged based on your initial booking? And in which currency? Did you manage to get a favorable outcome after speaking to the supervisor? Hope things turn up well so that you can focus on other travel logistics.

      1. Hi Nicole, I tracked down my booking confirmation email which stated $726 AUD based on the exchange rate back in February, after checking historical exchange rates it looks like they used the wholesale rate to quote. Since then the AUD has declined 4% but their new quote ($825 AUD) is now 14% higher, this is a 10% difference which they could not explain. Very shady tactics to initially quote based on the wholesale rate but when it comes time to charge the customer they use an extremely inflated rate! I work in Finance so I’m familiar with exchange rates but even the average consumer would notice such a large mark up.

        Even though the supervisor was agreeing with my points regarding these dodgy exchange rates he still could not provide a solution. Luckily the booking was refundable so I contacted the hotel and asked them to match Agoda’s price so I could book with them directly, they agreed and I happily cancelled my Agoda booking. Hotels always prefer for guests to book directly so they’re usually very accommodating with matching prices.

        1. Wow. That’s a great strategy. Thanks for sharing. I want to try it too. :) And I’m happy things turn out well for you. I think the inflated markup should be a top-down “strategic” move. The staff probably can’t do much, except front unhappy customers.:(

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