to exchange
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to exchange / return
To bring a purchased item back to a store and receive another item or the money back in return.
Ich möchte diese Hose umtauschen, sie passt mir nicht.
I would like to exchange these pants; they don't fit me.
'Umtauschen' (to exchange) is a separable verb. The prefix 'um-' goes at the end of the main clause. In subordinate clauses and in the infinitive with 'zu', the verb stays together.
Ich tausche die Jacke um, weil sie zu klein ist.
I am exchanging the jacket because it is too small.
How can you recognize the meaning? If it is about money (euros, dollars), it means currency exchange. If it is about products (pants, gift), it means returning goods.
Können Sie mir sagen, wo ich hier Geld umtauschen kann?
Can you tell me where I can exchange money here?
When you return an item and get something else in exchange, the preposition 'gegen' (for/in exchange for) is often used.
Sie können den Pullover gegen eine andere Größe umtauschen.
You can exchange the sweater for another size.
When exchanging currencies, the target currency is connected with the preposition 'in' (with the accusative).
Am Flughafen kann man Schweizer Franken in Euro umtauschen.
At the airport, you can exchange Swiss francs for euros.
to change / switch
'wechseln' and 'umtauschen' can both mean that something is replaced by something else. 'wechseln' is more general: you can change batteries, clothes, your seat, or money. With money, it means changing a currency or banknotes into others. 'umtauschen' is used especially when you bring a purchased item back to a store and get something else or your money back in return. You can also say 'umtauschen' for currencies. Learners often confuse the words because both have to do with exchange. As a guide: in a store, with an incorrect or unsuitable item, you usually say 'umtauschen'; for many other replacements, 'wechseln' fits better.
Sie hat die zu kleine Jacke im Geschäft umgetauscht.
She exchanged the jacket that was too small at the store.
Vor der Reise wechselt Maria am Bahnhof Euro in Dollar.
Before the trip, Maria changes euros into dollars at the train station.