As I had posted earlier in the thread, my sister-in-law has been visiting for a week, and we have had the opportunity to test out DCC at some establishments. Many of us have speculated that DCC is rare in the US and can easily be avoided in cases where it does exist. I have always suspected that the choice, if offered, would appear on the electronic signature pad, and the customer would be in full control of pushing the proper currency selection. We had tried the Cheesecake Factory and West Elm a week ago, and we saw no DCC at either location. My sister-in-law then proceeded to spend down her available USD in cash since she didn't much like the way the AUD:USD exchange rate has gone in the last two years.
We finally struck gold at Forever 21 in San Francisco. The cashier was patient while I was scrambling to get out my phone to take the following photo (and attached receipt):
The screen stayed at the DCC selection until the NO button was pressed. Since the DCC offer was 3% and the card used has a 2.5% currency exchange fee, not much was saved by opting out of DCC. As more issuers convert to foreign transaction fees, this calculus will undoubtedly change.
These transaction posted using the Visa exchange rate of 1.294202 AUD/USD from 2/14:
DCC Offer: A$33.20
DCC Markup: 3.00%
Posted Amount: A$32.23
Currency Exchange Fee: A$0.81
Amount Saved: A$0.16
We then went across the street to Kate Spade, where we also encountered DCC with a similar setup. When my sister-in-law specified to the cashier to pay in USD, we got a blank stare. While I wasn't able to see the cashier's point of view, I don't think the cashier had any way to force the currency selection. Here is what we saw:
I was in a better position to help her decline DCC and get a subsequent photo showing the standard electronic signature pad with amount in USD. Like the receipt from Forever 21, there was no mention of DCC.
DCC Offer: A$210.25
DCC Markup: 3.333%
Posted Amount: A$204.08
Currency Exchange Fee: A$5.10
Amount Saved: A$1.07
Macy's at Union Square in San Francisco didn't present any DCC, and showed the standard screens I've seen everywhere in the US about e-mailing or printing a receipt:
Posted Amount: A$33.47
Currency Exchange Fee: A$0.84
A purchase the next evening at Panera Bread did not yield any DCC:
One potential caveat here is that the above transaction didn't ask for a signature at all, likely owing to the < $25 amount. I should have added a pastry for $0.99 to meet the threshold required for a signature.
Finally, we made a purchase at a Napa winery on Monday without any hint of DCC either. There was no electronic signature pad, but the magstripe reader was integrated with the register. I was watching the touchscreen on the register like a hawk, and I saw no indication of DCC or a currency choice pop up.
In summary, we have only seen DCC in retail establishments, and it's been easy to circumvent in the two cases where it was present. Since the vast majority of big box retailers, department store, supermarkets, etc. have electronic signature pads, I assume that DCC isn't a big problem even when one encounters it in the US. More data points are needed, specifically for sit down restaurants and hotels. I think in the case of restaurants, DCC could be avoided by having the waitstaff void and rerun the transaction. Tipping culture is a good motivator here.
A more problematic case might be at hotels. Most hotels will swipe your card for an authorization hold and then discreetly slip the room bill under the door overnight on the day of departure. In contrast, at most hotels outside of North America there is the physical act of checking out where the reception will run your card for the full amount rather than in the background. This is good when overseas since I've been burned by DCC when using easy checkout procedures. Again, I think the customer service culture would prevail and allow for a DCC-free bill if the case arose. However, even in the case of a chargeback, you would win since Visa regulations require that you opt-in by marking accept on the written agreement.
While I recognize that I only have a sample size of two DCC cases, the markup was only 3% in both cases. Lately I've been seeing markups of at least 4% overseas and in some cases as much as 5%. If you have a card with a 2.5-3% currency exchange fee, a 3% DCC markup will more or less be a wash assuming you don't have rewards bonuses tied to foreign currency spending.