Foreign Transaction Fees for USD to USD

I, like many others out there, avidly review my credit card statements. I view the card’s activity online before statements to make sure there aren’t any unauthorized purchases on there. I don’t think I’ve actually found any in the eight years I’ve had this card. When statements come around, I like to know exactly what finance charges are applied. This month, for the first time, I saw “FOREIGN TRANSACTION FEE*FINANCE.” Having never made a foreign transaction on this card, I immediately questioned it through their secure messaging system.

Date/Time: 05/13/09 07:22:15 PM
You wrote:
I would like more detail on the following as I do not recall making any foreign purchases:
05/12/2009 FOREIGN TRANSACTION FEE*FINANCE CHARGE $1.92 Transaction Type: 3 Post Date: 05/12/2009 Reference Number: 00000000 Charge To: Standard Purch

     Unsurprisingly, the automated response was useless.

Date/Time: 05/13/09 08:06:44 PM
Customer Service Wrote:
The Foreign Exchange Transaction Fee will appear as a separate line entry item on the statement with the following label: “PURCHASES*FINANCE CHARGE*FOREIGN TRANS?.
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     I filled out their survey linked to with the “Let us know.” line to let them know that the quick responses quoting the FAQ don’t actually help people with real questions. Then I replied.

Date/Time: 05/13/09 08:17:26 PM
You wrote:
The information I requested was not given. I would like details on what that specific FOREIGN TRANSACTION FEE*FINANCE CHARGE of $1.92 was for. I did not ask what a FOREIGN TRANSACTION FEE was.

     Thankfully, their live responses don’t take very long at all. I wasn’t expecting to hear from Citi customer service again last night.

Date/Time: 05/13/09 09:24:47 PM
Customer Service Wrote:
We would like to inform you that charges from the Valve in the amount of $39.99, $9.99 and $14.99 are subject to the 3% Foreign Exchange Transaction Fee.
The Foreign Exchange Transaction fee is a 3% fee billed to an account by Citi if the customer makes a foreign purchase in a foreign currency that is converted into US Dollars or foreign purchase made in US dollars. See your Card Agreement for additional information.

     Now wait a minute. Valve Corporation is based in Bellevue, Washington, United States of America. I live in the same country! Where are these foreign purchases coming from? I looked over my statement online, checking the Valve purchases from last month. The were there, just as they should be, with the right prices and everything. There was nothing in the transaction details, on my card statement or on the receipt from Valve, to indicate that these charges would be subject to foreign exchange fees.

     The only thing that caught my eye as strange was the name of the company associated with the transaction. Previously, my purchases through Valve’s Steam game delivery system have been listed as “STEAM GAMES WWWSTEAMPO BELLEVUE WA”. Last month’s purchases were listed as “VALVE HOOFDDORP 06”. Hoofddorp? Yes, Hoofddorp. The Netherlands.

     I asked some online buddies if I’d managed to miss some huge news about Valve being bought out by some company in Holland. Nope, no one’s heard anything about that. In fact, no one I talked to had any foreign transaction charges from their banks for their purchases from Valve last month.

     I replied to customer message and stated that Valve is in Washington, I’m in Ohio, and there should be no foreign purchases. I then contacted Valve:

« MESSAGE BY YOU ON WED, 13TH MAY 2009 6:11 PM »
Recently I purchased three games through Steam. Two were gifts (Left 4 Dead, Orange Box), one was not (Braid). I, and the person receiving the gifts, are located within the US. Last I checked, so was Valve. After reviewing the statement of the credit card used to purchase these games, I have found I received a foreign transaction fee on those purchases. I have never received such a fee before, and this is the only card I use to purchase games through Steam. What is going on here?
The transactions are listed on my credit card statement as the following:
04/27/2009 VALVE HOOFDDORP 06 $9.99
04/27/2009 VALVE HOOFDDORP 06 $14.99
04/22/2009 VALVE HOOFDDORP 06 $39.99
My account and billing information have always been set to Cleveland, OH, US, but it appears these charges are through Hoofddorp, Holland. I see no reason for this to have happened as all previous purchases have shown as STEAM GAMES WWWSTEAMPO BELLEVUE WA and incurred no extra finance charges.

     The response from Valve’s customer support confirmed that they are, indeed, a US company.

Hello Amanda,
Even though the transaction was listed as an international transaction, we are a US company. The purchase was completed through a secondary processing location. You will need to contact your bank and explain that we are a US company and request that this fee be lifted.
Should you have further questions, please feel free to contact us.

     I relayed this information to Citibank; their response was to call their customer service number. After speaking to their Indian call center, I was informed that they would be “making a note” on my account and “passing it along, right away.”
Later this evening I received an email response from Citibank stating simply;

Unfortunately since there secondary processing location is outside of the US there is a fee associated with the transactions.

Citibank is charging a foreign transaction fee for a US citizen to purchase a product from a US company because the US company outsourced their payment processing to the Netherlands.

Looks like I’m not buying any games from Valve anymore.

Steam Subscriber Agreement; Section 4.A & 4.B (Wherein there is no mention of possible foreign transactions for purchases made by residents of the US).


Valve offers some Subscriptions for free, and some for a Subscription fee. All fees are stated in U.S. dollars unless otherwise specified.

A. Payment by Credit Card.

When you provide credit card information to Valve, you represent to Valve that you are the authorized user of the credit card that is used to pay for Merchandise or Subscription or other fees and authorize Valve to charge your credit card for any Merchandise or Subscription or other fees incurred by you. For recurring monthly Subscriptions, each month that you use such Subscription(s), you agree and reaffirm that Valve is authorized to charge your credit card for the Subscription fee. You agree to notify Valve promptly of any changes to your credit card account number, its expiration date and/or your billing address, and you agree to notify Valve promptly if your credit card expires or is canceled for any reason.

B. Charges to Your Credit Card.

ALL STEAM FEES ARE PAYABLE IN ADVANCE AND ARE NOT REFUNDABLE IN WHOLE OR IN PART. Valve reserves the right to change our fees or billing methods at any time and Valve will provide notice of any such change at least thirty (30) days advance. All changes will be posted as amendments to this Agreement or in the Rules of Use and you are responsible for reviewing the billing section of Steam to obtain timely notice of such changes. Your non-cancellation of your Account or an affected Subscription thirty (30) days after posting of the changes on Steam means that you accept such changes. If any change is unacceptable to you, you may cancel your Account or a particular Subscription at any time as described below, but Valve will not refund any fees that may have accrued to your Account before cancellation of your Account or Subscription, and Valve will not prorate fees for any cancellation. If your use of Steam is subject to any type of use or sales tax, then Valve may also charge you for any such taxes, in addition to the Subscription or other fees published in the Rules of Use. The European Union VAT (�VAT�) tax amounts collected by Valve reflect VAT due on the value of any Steam Software or Subscription as well as import VAT collected which is to be paid to the tax authorities for the importation of Merchandise.

As the Account holder, you are responsible for all charges incurred, including applicable taxes, and all purchases made by you or anyone that uses your Account, including your family or friends. Information on how to cancel your Account or a particular Subscription can be found at Valve reserves the right to collect fees, surcharges or costs incurred before you cancel your Account or a particular Subscription. In the event that your Account or a particular subscription is terminated or canceled, no refund, including any Subscription fees, will be granted. Any delinquent or unpaid Accounts must be settled before Valve will allow you to register again.

Edit on 5/15/09 @ 8:45 AM

Sent this to citi, even though at this point I consider this Valve’s fault.

It is still a transaction between two entities within the US in US dollars. It is ridiculous that Citi will still charge for it. It’s like saying I should pay international rates on my cell phone for calling your 1-800 number because it forwards to a call center in India.

Edit @ 9:06 AM
Found someone else had a similar issue in December; the charge went through London.

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