I do agree that banks may or may not give you what you consider a fair exchange rate, but the spreads at the airport approach and often exceed ten percent.

When traveling yourself, I suggest using a "fee free" credit or debit card to get the best exchange rate.

You made a mistake because the rate posted on www.xe.com  is the value of the currency not the exchange rate at banks or other venues..no one will ever exchange at those rates. The bank told you wrong too because banks or airport exchange will always charge you fee for the exchange.

My bank posts their "buy" and "sell" price for major currencies on a daily basis. These numbers can be up to $.05 off from the supposed exchange rate.

Dear Tamara:
Although you checked you bank's rate for exchange, I wonder what they would go for on the black market? I am sure the rates would be at least 5 to 10 dollars higher than they banks anyway. The question is with that is that you would have to be extremely careful with who you would deal with. I was just wondering is what you lost significant when you made the conversion?

Why would someone be in the US and have no $'s? It's easy to get $'s from an ATM with a foreign debit/check card (as you can use a US card in Europe). Even with the bank charges, it still comes out less expensive than converting currency at banks and airports.

The fee to exchange AND the rate.  Even Paypal would be better but, depending on the overall amt, a wire transfer would get you a better rate and the sender would have to pay the fee for the wire.  In these two cases, you could even negotiate the rate to use for the transaction.  Use a temp or a zero bal acct to accept the wire.  The guy could also have done either of these two things from over here rather than just showing up with Euros.

You get the best rates in the banks in the country the guy came from.  
Now that does not do you any good.
In the US A National Bank is your best bet.  But they will always knock off a percentage from the official exchange rates.  It is a hedge to cover any change in rates between the time you give them the Eros and the time they can unload them for Dollars.  (and often gives them a bit of a profit for the service).

It would be wise to add a 20-25% markup if paying with Euros (or other currency).  If they don't like it they can change to dollars before hand.

Major Banks keep a certain level of the major currencies, but exchange rates change often depending on the markets. To exchange money other than at a major bank is to ensure the house gets paid first. Airports and other off-brand locations are notoriously greedy and take advantage of the unwashed.

They are close but you never get 100% accurate. The difference is often minimal.

Happens to me quite often on my expense reports. When I com back, the rates may be higher or lower depending on the exchange rate. My company has a policy to pay the difference but you have to submit another expense report.

Sometimes the difference is worth and other times it is not. All happens because, Credit card companies use rates when the transaction is posted in their system.

There is no currency or commodity that holds steady over time, if it did then, there would not be any arbitrage.

I agree with Vanica.  I've had short trips to SA, Europe, and E. Asia the past two years and using a cc was always most convenient and also offered the best exchange rates.