A mystery shopping exercise by the money transfer service revealed that travellers get different exchange rates from the Post Office depending on where they live.

The research, carried out by Consumer Intelligence, analysed the walk-in exchange rates offered at Post Office branches in six different locations. It then calculated the difference between the exchange rates offered and the mid-market rate, provided at the time of the collection.

The study found that the pound to euro rates for £250 vary by €1.01 at one branch in Manchester to €1.084 in another in Bristol, and pound to dollar rates for £250 vary from $1.18 in Manchester to $1.22 in Bristol.

Customers exchanging pounds to euros were getting just €1.01 at one Post Office in Manchester, compared to a mid-market rate of €1.11, losing holidaymakers the equivalent of €26 for every £250 exchanged.

For Post Office customers at a branch in London exchanging £1,000 for euros, they were offered a rate of €1.056, compared to the mid-market rate at the time of €1.11, meaning they lost out on an extra €57.80.

Overall the analysis found that exchange rates offered for pounds to euros across all the Post Office branches in the mystery shop differed by up to 8 per cent.

Rural rip-off

The research also looked at the rates offered at rural locations. It found customers at a Post Office branch in a village outside Cardiff were getting a rate of just €1.01 to the pound for £250, compared to €1.08 in the Cardiff city centre branch, a difference of €17.29.

Similarly, customers at a Post Office in Bishop Sutton were offered a pound to euro rate of just €1.05 compared to €1.084 in an inner city branch in Bristol.

The difference between the in-branch and pre-order rates at the Post Office was also significant. For a £1,000 exchange into euros the branch rate would have lost holidaymakers an extra £31 compared to if they’d done the same transaction online.

Transferwise accused the Post Office of a “lack of transparency” and “unfair rates”. It said that by advertising holiday money as “fee-free” or “0 per cent commission”, the Post Office and other high street providers mislead consumers into believing they are getting a good deal.

Shop around for currency

Kristo Käärmann, CEO of TransferWise, said: “With a busy weekend for travel and millions of Brits taking advantage of the long weekend to head abroad, a third of holidaymakers will still get their cash from expensive high street bureau de change. With deliberately confusing jargon and sneaky mark-ups in the exchange rate, these firms make it impossible for Brits to work out how much they’re really being charged and are deliberately leaving holidaymakers out of pocket.

“Timing couldn’t be worse for holiday money as the pound hit a 10-year low against the euro last week. Even small deviations from the mid-market rate can be costly, over a holiday adding up to the equivalent of a family meal out or even a night in a hotel. Over a lifetime this adds up to £4,791 lost to poor exchange rates and fees. With currency volatility set to continue it’s more important than ever that people check the real exchange rate before they buy their holiday money or they’ll continue to take the hit.”

A Post Office Spokesperson said: “Like many other providers our exchange rates on different currencies do vary dependant of the amount of the transaction and also whether purchased online or in branch. Our 0 per cent commission rates offer great value and in addition to our competitive rates our network of over 11,500 in towns and villages across the UK offer unrivalled convenience, allowing people to purchase and pick up currency locally.

“The majority of the Post Office’s 11,500 branches offer the same exchange rates on all currencies. However, in some areas where there is a high level of competition from several travel money providers, we may make small rate adjustments to remain competitive and ensure our customers get a great deal in their local area.”