Customers in foreign markets being charged international transaction fee when purchasing

[CamM1]

Our business is based in the US. We use Shopify Markets to sell to Australia. We have fixed, local prices set.

Our site: https://sheilathelabel.com/

However, we recently had a complaint from a customer. They bought a product for AUD$275, but their credit card showed they were billed $283.25. Initially I couldn't figure out how this could have happened - the Shopify logs showed we only charged $275. But then I realized that the difference was 3%, and what happened was that their bank charged them an "international transaction fee." This is unfortunate, since we have priced in AUD so Australian customers do not expect to be charged an "international" transaction fee. It is a bad experience.

I found this on the Shopify wiki: "International transaction fees (or foreign transaction fees) might be charged to your international customers by their bank or credit card issuer, even when their credit card is charged in their local currency. For example, if your business is based in the United States and a customer in Canada places an order, then their bank might still apply an international transaction fee even if their credit card was charged in CAD." https://help.shopify.com/en/manual/international/pricing/fees#international-transaction-fee

Why do banks consider transactions in local currencies to be "international"? I don't understand why this happens. And is there anything which can be done about it? It undermines the point of localization when customers are then surprised to discover that your business is not local.

Does anyone have any advice about how to manage these bad experiences?