Back in the '70s, actor Karl Malden told American TV viewers, "Don't leave home without them.” He was referring to the traveler’s check, then the safest way to carry money while traveling for business or pleasure, but now it seems that traveler’s checks, just like those commercials, are becoming a distant memory.
While many hotels and tourist destinations still accept traveler’s checks, many retail outlets, particularly in Europe, have ceased to accept them and are putting many travelers who have relied on these checks for decades in cash-flow limbo.
John Z. Wetmore traveled to Vienna, Austria two years ago and found that even his hotel wouldn’t accept his traveler’s checks. “I had traveler’s checks denominated in Euros, but I couldn’t cash them at my hotel,” said Wetmore. “I ended up cashing them at a bank, but the fees were painful.”
With horror stories like these becoming more commonplace, is it safe to say the traveler’s check is dying? To better understand where the traveler’s check stands today, it might help to recap its past.
In the mid-20th century, as travel became more common in the U.S. and toward the end of the century, when international travel was taking off, travelers sought traveler’s checks as a way to carry something close to cash safely. For a relatively small fee and peace of mind, companies such as American Express, one of the largest issuers of these checks, promised quick and easy replacement if the checks were lost or stolen.
Most retailers accepted the checks as cash, but that began to change with the prevalent use of credit and debit cards. Now Great Britain’s UK Payment Council’s National Payment Plan has announced it will phase out all paper checks by 2018, and the Federal Reserve of St. Louis issued a report showing that the use of traveler’s checks reached its peak during the 1980s and 90s, but has declined each year since.
American Express officials assert that traveler’s checks are a core piece of its brand, saying that they’re still accepted at hotels and other retail outlets in 150 countries. An official with American Express even said the company experienced growth of outlets in Asia and Latin America. But David Owen, a tour guide for PowderQuest Tours, which takes travelers on guided snowboard tours in Chile and Argentina, disagreed and said the traveler’s check is dead in those countries, too.
“The few places that accept them charge a large commission to change them,” said Owen. In addition they give you terrible exchange rates, often 10% less than the rate you would get via an ATM machine or exchanging U.S. cash for pesos. You have to stand in line and sometimes wait hours before they honor the check.”