hi romurphy@eir
callaybags - you are correct in that the banks make their money from the exchange rate that they get and they give to the customer
there is however there always is difference in exchange rate between buying and selling a currency, Bid = buying a currency Ask = selling a currency.
The difference between the bid and the ask is called "the spread".
the spread is kept as profit by the wholesale broker/specialist handling the transaction. In truth, the spread goes to pay a number of fees in addition to the broker’s commission. Note: This is not the same commission you pay a retail broker. The wholesale broker isnt your bank it is the supplier that the bank buys off.
Having say all that the difference between buying or selling a currency is only around 10pips. i.e 1.8200 and 1.8210.
But this does not explain the difference in exchange you revived, what does explain the difference is the margin (difference in exchange rate they get and the exchange rate they give to you)
they have given you an exchange rate around 6% off what they receive, this is not unheard of. It does however depend of the your were exchanging. as 6% is normal for tourist rates i.e bureau de change.
normally you would expect this for amounts under €1,000
if you are exchanging larger amounts i.e €10k + i would recommend not using your bank but using a independent currency specialist as you are likely to get a much better exchange rate.
i hope this information has been of use
regards
Alex