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Whereas what they're legally obliged to do is refund the amount the customer paid.
Didn't the customer pay €500?
It's not down to the shops in other countries to cover fx fluctuations when they're advertising things in their local currency.If they sold it for £450 then fine, refund £450 (and they take the hit or not).
If they sold it for €500 then refund €500.
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Good point. I suppose if the thing was priced in Euros, then you either have to pay in Euros from a Euro-demoniated account or bear the costs of converting your chosen currency into Euros and back again. The difference seems a lot though, even taking account of PayPal's less than competitive exchange rates.
Whereas what they're legally obliged to do is refund the amount the customer paid. If it was a UK shop I'm assuming most people wouldn't be happy receiving a refund of the money they paid less the card transaction fee.