How to Handle German Merchant Contracts
Welcome to Germany! Moving to a new country can bring about a vast array of cultural, lifestyle, and financial differences. Our aim is to help alleviate some of the challenges that develop from this huge transition. Specifically, addressing those unknown aspects of German day-to-day business and how you, as a new arrival to this amazing country, can prepare to incorporate these aspects into your own day-to-day life. For starters, German merchant contracts function a little differently than those you may be familiar with in your previous location or duty-station.
A prime example revolves around establishing and cancelling contracts with German organizations, such as T-Mobile or ADAC (Allgemeine Deutsche Automobil-Club). When establishing a contract, pay close attention to the terms of the contract, particularly stipulations surrounding exceptions to cancellation and how cancellation of the contract is generally defined. Some German contracts allow you to cancel the terms immediately, whereas others are set for a fixed period, usually between one-to-two years. These fixed period contracts could also automatically renew at the contract’s end, so pay special attention to this detail if you do not anticipate using the contractual services for longer than a year.
Some German merchants use external companies for services such as insurance. For example, a cell phone contract might have a breakdown of all associated costs that make up the total payment displayed. Keeping track of this breakdown will help prepare you for any potential charges assessed to your account, and avoid possible confusion and concern down the line. Keep in mind some charge on a monthly basis, while others charge annually. We recommend scrutinizing these initial contractual terms to better assist you in determining why a German merchant may have charged your account.
If you need to cancel a service, German merchants typically require cancellation to be executed in writing of some kind, be it an email, physical letter, or an online form. Keep in mind that some German merchants may accept special cancellation reasons associated with U.S. military members. Inquire with the German merchant prior to cancellation to determine if this clause may apply to you. When a cancellation request is submitted, the German merchant should respond acknowledging your request, resulting in a written acknowledgement by the merchant with a defined end date of their contractual services to you. We also suggest contacting the merchant for a follow-up to verify any possible additional charges they may assess.
Check out more of our tips for PCS-ing to Germany, including our favorite financial hacks and a guide to shopping for a car overseas.
If you have any questions, don’t hesitate to contact Service Credit Union’s Foreign Exchange Department at 1-800-936-7730 if located in the US or at 00800-4728-2000 if located internationally. We hope you enjoy your time in Germany, however long it may be!
