Currency conversion means changing one type of money into another type based on the current foreign exchange rate when buying or selling something. In your online store, you can check out these conversion details for each sale or refund in the order details. You can also set how much a product costs and how the currency conversion happens in your store's settings.
What is Currency and How Does Conversion Work?
Your online store uses three types of money:
- Store Currency: This is the default primary currency of your Shoplazza store. It's what you use to set the prices for your products, it's shown in your store reports, and it's what your customers see in your main market.
- Local Currency (also called Customer Currency): This is the type of money your customers see when they're shopping and what they use to pay for their orders at checkout.
- Payment Currency: This is the type of money that gets deposited into your bank account after a sale.
Risks of Currency Conversion
Currency exchange rates change all the time. If there's a delay when you're processing payments or refunds, you could lose or gain money due to these changes in currency conversion rates.
Automatic Currency Conversion Based on Exchange Rate
If you're selling in local currency, your store will automatically change the prices of your items based on the local currency you've set. This adjusts as the market exchange rates change.
Let's use the price of a t-shirt as an example, with USD converting to CAD. The default currency of the t-shirt price is multiplied by the currency conversion rate, and then the price rounding rule for that currency is applied. For instance, if a t-shirt is priced at $36.99 USD in the main market, and after being automatically converted at the real-time exchange rate, it would be sold for approximately $46.24 CAD in another market (assuming the real-time exchange rate is 1 USD = 1.25 CAD). However, when price rounding is enabled, the t-shirt's price in the aforementioned markets will be adjusted to $47.00 CAD (as per the common denomination form of CAD, rounded up).
Because there's a time gap between when a customer places an order and when they get a refund, the amounts may not match up. To keep your customers happy, we suggest that you refund the full amount the customer paid in their local currency. This might mean that you could lose or gain a small amount of money because of currency conversion.
When a customer asks for a chargeback, the currency is converted using the exchange rate at the time the chargeback happened, not when the order was placed.
Handling Currency Conversion During Checkout
Please note that the information provided assumes your store allows customers to pay in their local currency. However, if your store settings are not properly configured, and a customer tries to pay with a currency that doesn't match your store's checkout currency, a currency conversion will occur. For example, if your store is based in the United States and only accepts USD, but a customer from Canada wants to pay in CAD, the currency will be converted from CAD to USD during the checkout process.