Hong Kong and Macau - BOO!!! - hong kong duty free (freeduty) now performing dynamic currency conversions

hi all

just a quick note to let you know that freeduty is now taking the liberty of doing dynamic currency conversions - no questions asked, and no opportunity to opt out.

I travel to HKG frequently (at least once a month) and this is the first time I have seen it and was caught out.

Only noticed it on my cc statement - and when I checked the cc receipt sure enought there were the magic 'I have been given the options... etc etc etc'

Of course I hadn't, and the conversion (to AUD) was nicely hidden well below the HKD amount.

Shame on you freeduty hk :td:

Calls to the supervisor at the airport only yielded a 'please email us' (although possibly due to the language barrier).

My bank on the other hand is happy to assist with a full charge back in the event they don't help me.

Just above where you sign, there are 2 little boxes you should be aware of.... one is the rate in HKD, and the other is another box in your home currency. always remember to tick the one on the left in HKD.

I think when converted, the HKD rate is better than what the converted rate is !

Going off at a tangent, I'm curious what it is that you buy at HK airport that is cheaper than simply buying it in town? In my experience everything at the airport is more expensive, often significantly more so.

(I guess tobacco might be an exception - I've never looked at that)

indeed it was tobacco!

Guy betsy - I looked at the receipt again - no check boxes... (which is the same as it is in China - they rely that you were verbally offered a choice).

I am used to saying in China 'please bill in rmb' - now will have to do the same in HK.

just very sneaky the way they have introduced this and I expected better of HK airport.

I am used to saying in China 'please bill in rmb' - now will have to do the same in HK.

That will likely get you very strange looks indeed!

That will likely get you very strange looks indeed!

:D

Woah non-compliant DCC in HK?

HK DCC (and banking generally) runs differently from China.

Can you post a image of the HK Duty Free card slip pls, like http://www.flyertalk.com/forum/china/1146772-using-credit-cards-china-great-cc-rip-off-dynamic-currency-conversion-21.html#307 ? I wanna figure out which HK bank is HK Duty Free's acquirer.

Whilst in China there's no-one who gives a damn if (acquirer) banks run amok, in HK it's pretty easy to screw both the merchant (HK Tourism Board) and the bank (HK Monetary Authority (our Reserve Bank) and HK Consumer Council). Companies maltreating tourists does get in the news.

So let's try and identify the HK bank involved and screw it. As well as HK Duty Free no doubt.


Incidentally, which Australian card issuer have you got? I used to live in Syd (and my brother's still there), interested to konw which bank is so happy to give out refunds?

Woah non-compliant DCC in HK?

So let's try and identify the HK bank involved and screw it. As well as HK Duty Free no doubt.

Incidentally, which Australian card issuer have you got? I used to live in Syd (and my brother's still there), interested to konw which bank is so happy to give out refunds?

I am with 28 Degrees Mastercard (issued by GE Capital).

I have emailed the vendor to see what steps they are proposing to rectify.

I will also work on scanning the receipt. Will need to track it down and remove cc details. Will post when I can.

hi all

just a quick note to let you know that freeduty is now taking the liberty of doing dynamic currency conversions - no questions asked, and no opportunity to opt out.

I travel to HKG frequently (at least once a month) and this is the first time I have seen it and was caught out.

Only noticed it on my cc statement - and when I checked the cc receipt sure enought there were the magic 'I have been given the options... etc etc etc'

Of course I hadn't, and the conversion (to AUD) was nicely hidden well below the HKD amount.

Shame on you freeduty hk :td:

Calls to the supervisor at the airport only yielded a 'please email us' (although possibly due to the language barrier).

My bank on the other hand is happy to assist with a full charge back in the event they don't help me.

Theft! Robbery! In my home town, not accross the border!

A couples of mates come over from Syd for Queen's Birthday holiday and we were shopping in Wanchai Computer Centre. I'll name the shop involved - MAGIC MEDIA located in Shop 108 Wanchai Computer Centre http://www.hkgolden.com/trade/details.asp?member_id=MAGICMEDIA&shoptype=S

We weren't even supposed to be looking for games. But my mates were taking advantage of the HK$8/AUD exchange rate and spending way beyond what's sensible.

They selected a copy of Shogun Total War 2 each and tried to pay. One of my mates took out a NAB Qantas Amex - I shook my head but told him he could try, I reckon he'll be slapped with a surcharge and will offer to pay cash instead (I had the HKD cash to stake him).

The shopkeeper looked at it and asked for a Visa in English - I guess he figured out this was a foreign card and he was a visitor. No surcharge or anything else was mentioned. My mate took out the NAB Qantas Visa that came with the Amex and the shopkeeper used the EMV chip.

It's a dot-matrix slip printer and cos it's HK I know how long it should take to print a normal slip. I didn't even need to see the slip before I was waving my arms and yelling with a boom voice (http://www.flyertalk.com/forum/trip-reports/1160958-home-xmas-my-first-award-flight-3.html#38) that verbage was being printed. If my other mate wasn't in the way I would've snatched the slip, forked over cash and demanded a reversal. As if to slap me down (my mates have heard me drone on about DCC repeatedly when we were in PRC) my mate signed the slip and handed it back to the GRINNING, cheeky shopkeeper.

I only got to see the slip for a slip of a second. It's a standard no-brand Artone slip with verbage looking suspiciously like BoC China's. I believe I couldn't figure out which bank even if I had taken a copy of the slip - only my mate can through NAB.

The Magic Media shopkeeper did not ask for any DCC input nor did I see him key in anything other than the amount. I wasn't close enough to see the screen.

The paying mate wouldn't let me see the slip cos he thinks I'm too obsessed about credit cards than what is healthy for me. But from the other mate I learnt he paid AUD88.72 for a HKD700 purchase.

On Saturday morning (after a hell of a night in LKF), he got cash from Pedder Street Citibank using his Australian Citibank card for $8.06 (AUD$0.1241/HKD). The Magic Media DCC rate is $7.90 (AUD$0.1276/HKD) - a 2.15% scalp.

Yes, $15 is nothing. It's just here in HK - HKSAR -AS BAD AS CHINA!!!

And in Magic Media's case, I have a very strong suspicion that the shopkeeper is in cahoots with the bank. I expected to be stuck with a surcharge (which might be 2-3%) from the shopkeeper which I would've thought legitimate even though I wouldn't have paid it - but instead he's recovering his interchange costs underhandedly.

I am with 28 Degrees Mastercard (issued by GE Capital).

I have emailed the vendor to see what steps they are proposing to rectify.

I will also work on scanning the receipt. Will need to track it down and remove cc details. Will post when I can.

just an update on this.

contacted hk freeduty and they offered to void the charge and recharge me, but only if I sent them my credit card details by email. they kept insisting (using traveled rates available at the airport) that the new charge would actually work out more! (we eventually resolved that issue).

they did however admit liability, and spoke with the assistant who supposedly confirmed she did not offer the choice of currency.

my bank agreed to do a chargeback, however I said to free duty that this would then leave them out of pocket, and I would not pursue the claim. I also mentioned that I would check with my friends and colleagues to monitor the use of dcc at hkia, and if this becomes the norm (without offering an option) that I would notify the authorities.

I think they have taken this on board, and the seemed genuine about it.

just an update on this.

contacted hk freeduty and they offered to void the charge and recharge me, but only if I sent them my credit card details by email. they kept insisting (using traveled rates available at the airport) that the new charge would actually work out more! (we eventually resolved that issue).

they did however admit liability, and spoke with the assistant who supposedly confirmed she did not offer the choice of currency.

my bank agreed to do a chargeback, however I said to free duty that this would then leave them out of pocket, and I would not pursue the claim. I also mentioned that I would check with my friends and colleagues to monitor the use of dcc at hkia, and if this becomes the norm (without offering an option) that I would notify the authorities.

I think they have taken this on board, and the seemed genuine about it.

After today's experience at Magic Media (above), I'm starting to suspect you didn't have a choice (if you found the Duty Free HK slip please post it up).

But besides pursuing Duty Free HK (which you rightly did) or charging back the transaction (which Wizard would've underservedly absorbed), you could've pursued Duty Free HK's bank with HK Monetary Authority - you just need Wizard to identify the acquirer and start the complaints process with the HKMA http://www.info.gov.hk/hkma/eng/consumer/cust_b.htm . This hurts the bank stealing your money, without unnecessarily hurting your issuer (Wizard). The HKMA doesn't always take the consumers side but does cause banks some pain.

My mate refused to even reverse his transaction so he won't go down the HKMA path.

Wow, you actually went through all this for HKD 15? I hope everyone is like you including Mr. Nacho. We usually use cash or EPS when we are in HK, so we don't have the DCC issue there. We did get robbed by Ross Dress for Less in the US using our Danish credit card. I wasn't given a choice of currency (I always check the screen before signing anything) and then robbed by DCC (it was 3%) vs our bank 1%. Mr. Nacho refused to do charge back or contact Ross for it :(

Avis France did the automatic DCC to us too, we got a copy of our rental contract that we deliberately refused the DCC, and they still billed us the wrong currency and no refund was given (fortunately they double refunded us the wrong charge so it covered the DCC so we don't have to initate a charge back).

There are more and more places that offer DCC - not just in HKG but anywhere, sometimes you get to choose and sometimes you don't.

Wow, you actually went through all this for HKD 15?

It's the principle - in my case it was even less. But the currency conversion was 5 per cent against me... if more merchants think they can get away with this it will start to add up.

Wow, you actually went through all this for HKD 15?

If you had a HK Visa card, we get 4X miles from our banks (namely Fubon Bank (HK)) for non-DCC foreign currency transactions. The DCC merchants are robbing our miles - I think we care don't we?

It's the principle - in my case it was even less. But the currency conversion was 5 per cent against me... if more merchants think they can get away with this it will start to add up.

I totally agree with you, I would fight if it was solely me. Yes, if everyone turn down the DCC option when they pay or fight with their banks or merchants after they paid with DCC without choice, then I think this scam will probably be over sometimes. Unfortunately time cost can be high for people like Mr. Nacho - he'd rather let them take his money because he can earn it faster back by going to work :td:

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hi all

just a quick note to let you know that freeduty is now taking the liberty of doing dynamic currency conversions - no questions asked, and no opportunity to opt out.

I travel to HKG frequently (at least once a month) and this is the first time I have seen it and was caught out.

Only noticed it on my cc statement - and when I checked the cc receipt sure enought there were the magic 'I have been given the options... etc etc etc'

Of course I hadn't, and the conversion (to AUD) was nicely hidden well below the HKD amount.

Shame on you freeduty hk :td:

Calls to the supervisor at the airport only yielded a 'please email us' (although possibly due to the language barrier).

My bank on the other hand is happy to assist with a full charge back in the event they don't help me.

Happy to report as just went there: they do by they always ask and they always have the check box on your CC slip for you to check what u want to pay.
No problem what's so ever.

HowieG - this is how DCC in HK has worked in the past (check box or circle). I assume cos you got check box, yours is thermal-printed, is that correct?

LHR/MEL/Europe FF - is yours thermal printed or dot-matrix? HK DCC dot matrix used to be circle in the past. If you got neither check box or dot-matrix then I suspect yours is a dot-matrix with a mandatory DCC firmware applied to it. Like my Magic Media receipt.

HowieG - this is how DCC in HK has worked in the past (check box or circle). I assume cos you got check box, yours is thermal-printed, is that correct?

LHR/MEL/Europe FF - is yours thermal printed or dot-matrix? HK DCC dot matrix used to be circle in the past. If you got neither check box or dot-matrix then I suspect yours is a dot-matrix with a mandatory DCC firmware applied to it. Like my Magic Media receipt.

it is dot matrix.

it is dot matrix.

Sounds really similar to my mate's Magic Media slip then. Mandatory DCC is here.

I won't be surprised if one of the PRC banks who's doing mandatory DCC in the PRC has brought their non-compliant firmware over here and daring no-one to be bothered to complain to the HKMA.

Deleted

...If you got neither check box or dot-matrix then I suspect yours is a dot-matrix with a mandatory DCC firmware applied to it...

Nevertheless, I was given choice, selected to pay in HKD and was charged in HKD as my CC statement indicated, the conversion was done by my CC company. So, there was no forced DCC to me there. Cheers.:D

Nevertheless, I was given choice, selected to pay in HKD and was charged in HKD as my CC statement indicated, the conversion was done by my CC company. So, there was no forced DCC to me there. Cheers.:D

I'm sure not all HK DCC are non-compliant. There are some compliant DCCs in PRC too. Like contaminated food, it takes one or two reports of non-compliant DCC for everyone to worry how many are there.

I'm not ruling out that one Duty Free HK terminal can be compliant (HowieG's) and another non-compliant (LHR/Mel/Europe FF) - Courtyard Mariott Puxi (Shanghai)'s terminal is compliant http://www.flyertalk.com/forum/cathay-pacific-asia-miles/910542-best-credit-card-coversion-rate-asiamiles-2009-fters-based-hk-40.html#598 but Marriott Beijing is not http://www.flyertalk.com/forum/china/1146772-using-credit-cards-china-great-cc-rip-off-dynamic-currency-conversion-11.html#164

I'm also thinking the more China proves Visa's DCC compliance program is a sham, the more DCC will spread beyond China's borders. HK's hit, Macau also http://www.hongkongcard.com/forum/forum_show.php?id=5373 - I can't help but think the HK subsidiaries of the PRC banks have imported their parents' DCC firmware.

I have become aware of this practice recently... and the hard way. I payed a hotel bill in Xian with my Capital One card, and they automatically used the DCC without offering me the option. I later calculated the difference (did not catch it in time because of morning rush to airport) to be around US$78.
Next time, 4 days later, in Shanghai I was smart and the hotel honored my choice of RMB. Another 4 days later, I was at the Holiday Inn Express in Chengdu, and specifically chose to pay in RMB and circled the option on my card slip (there were no check boxes), and still got charged using DCC.

I have called Capital One to understand under what circumstances I would benefit from using DCC and they have not been able to explain it to me. I spoke to their agents in Tampa, Florida and Baguio, Philippines, to no avail. I asked them to correct the Chengdu Holiday Inn Express charge also. I was asked to send in the scanned copy of my charge slip copy. I did that on June 20, and to date the Capital One people tell me the fax does not show on their system... but not to worry... it will at some point! I am not happy.

I would like to understand the basis for the DCC-Local currency choice. It is not in my interest every single time so far. My guess is that in a country with runaway inflation (say like Zimbabwe...) it might be of benefit, but is their any other circumstance when it may help?

The second question is what do people have to say about the customer service of Capital One?

Hope to hear from someone who has experience.

Cheers.

I have become aware of this practice recently... and the hard way.

http://www.flyertalk.com/forum/china/1146772-using-credit-cards-china-great-cc-rip-off-dynamic-currency-conversion-29.html#post16665231

Thanks PS.

The least that Visa/Capital One can do then is to make their customers aware of the potential problem, so they can take it into account. Maybe the fact that they will lose the smaller commission as customers pay cash is why they don't do so. They should do the right thing in passing on the information.

I have a BA Chase card. Last month, in HKIA, I used it at the duty free as well as Burger King. Both time both merchants did NOT ask me if I want to be billed in HKD or USD. When I was giving the slip to sign, the USD was on the bottom of the slip saying that I was given the option and I chosen USD. Mean while the HKD is printed in clearly in the middle. Very misleading. Both times, I asked the cashier to void the sale and bill me in HKD. I used the card frequently in HK and have not experienced since. Seems like it's only happening at the airport.
In China, I always tell them beforehand to charged me in RMB.

I have a BA Chase card. Last month, in HKIA, I used it at the duty free as well as Burger King. Both time both merchants did NOT ask me if I want to be billed in HKD or USD. When I was giving the slip to sign, the USD was on the bottom of the slip saying that I was given the option and I chosen USD. Mean while the HKD is printed in clearly in the middle. Very misleading. Both times, I asked the cashier to void the sale and bill me in HKD. I used the card frequently in HK and have not experienced since. Seems like it's only happening at the airport.
In China, I always tell them beforehand to charged me in RMB.

was this at 'freeduty' hong kong airport? Would be good if you can confirm, because my discussions with the assistant manager assured me dynamic conversion would NOT happen again without customer consent. I accepted this as a condition of not pursuing my claim against them.

So if the receipt was from FreeDuty please let me know!

was this at 'freeduty' hong kong airport? Would be good if you can confirm, because my discussions with the assistant manager assured me dynamic conversion would NOT happen again without customer consent. I accepted this as a condition of not pursuing my claim against them.

So if the receipt was from FreeDuty please let me know!

Not sure if it's exactly 'freeduty' as I can't find the receipt but it was from one of the place where you buy perfume in HK Airport after you clear immigration. I am tempted to try again as I still need to use the card to reach a spending limit. I used the card a lot inside the city and hasn't happened. So far, just in HKIA. I am tempted to email the HKIA or leave a comment in SKytrax. Funny thing is that HKIA was just ranked #1 airport in the world. I wonder how many people they ripped off so far.

Not sure if it's exactly 'freeduty' as I can't find the receipt but it was from one of the place where you buy perfume in HK Airport after you clear immigration. I am tempted to try again as I still need to use the card to reach a spending limit. I used the card a lot inside the city and hasn't happened. So far, just in HKIA. I am tempted to email the HKIA or leave a comment in SKytrax. Funny thing is that HKIA was just ranked #1 airport in the world. I wonder how many people they ripped off so far.

That would far more likely be Nuance-Watson Temptations http://www.hongkongairport.com/eng/shopping/insideshopping/t1/healt/temp.html . I'm not sure Free Duty does purfume but Nuance-Watson has a lot of shops after outbound immigration.

Although you don't have the receipt, can you post the line entry from your online banking here please? It should state who the merchant is and you've not been billed in HKD at all.

Something like this - I'll name and shame the merchant I've been DCCed at while I'm at it. I'll also show the next line which is an obviously overseas merchant (in relation to me in HKG) who did not apply DCC on same card:

27-Sep-10 24-Sep-10 SZ OCT INTERLAKEN HOTEL RSHENZHEN CN 2,549.28
REF NO: 74924420268013000200434
24-Sep-10 23-Sep-10 CFA INSTITUTE 4349515499 US 4,667.21
FRGN AMT:590.00 U.S. DOLLAR
REF NO: 24001750266207148104150

At HKIA Gate 29 right now. Just walked past Free Duty at Gate 1 on Level 6. I've seen a BoC sticker on their terminal. And it looks like a thermal terminal (though whether thermal or carbon doesn't really matter). I was prevented from looking further by four Freeduty salesladies staring at me.

I have called Capital One to understand under what circumstances I would benefit from using DCC and they have not been able to explain it to me.

Runaway inflation is a dubious reason at best. I suspect the official line, if you could ever find someone that knows it, is that the DCC can benefit the consumer by stating the cost in their native currency so that they know how much the purchase "will really cost" without having to do the conversion themselves. It's true that there are certain travelers that just can't latch onto the concept of currency conversion and can never figure it out. Of course, what is left unstated in this equation is how much of a value this is versus the conversion rate applied to DCC.

I have called Capital One to understand under what circumstances I would benefit from using DCC and they have not been able to explain it to me.

Antitrust purposes:

I read an article a while back that said issuer banks are okay with DCC cos most issuer banks are also acquirer banks so no-one actually loses volume, but they collect higher fees overall:

http://en.wikipedia.org/w/index.php?title=Dynamic_currency_conversion&oldid=405000340

The article also references Visa's/Mastercard's needs to keep DCC for antitrust purposes:

http://www.law360.com/topnews/articles/129960/judge-oks-336m-settlement-over-credit-card-fees

Of course, the Big 4 Chinese banks then unabashedly took advantage of (excuse the pun) Visa's inability to turn off DCC and bxttfxcked visitors like pedophiles.

Another case where DCC could theoretically benefit the cardholder is in the situation where the cardholder's bank does not charge a foreign transaction charge for purchases made in the card's native currency. This was mostly the case in the US until 10-15 years ago: back then, the common 3% charge was stated as being for foreign currency conversion. Then, most (or at least many) banks changed it to be a "foreign transaction fee" that was assessed even if the charge was made in USD.

For situations where the issuing bank only charges extra for currency conversion, then the argument could be made that DCC gives the consumer "more choice" as they can choose to have either the merchant or their own bank do the currency conversion. In practice, I suspect that the typical DCC rate is far more than 3%.

I would like to understand the basis for the DCC-Local currency choice. It is not in my interest every single time so far. My guess is that in a country with runaway inflation (say like Zimbabwe...) it might be of benefit

In thinking about this situation a bit more, it would be of benefit only if the card was issued in the currency that has runaway inflation - not for people visiting such a country. If you are just visiting, then any delay in doing the currency conversion back to your own currency is going to benefit you, not hurt you.

Incidentally I've always found the name of those shops at HKG amusing - "free duty" instead of "duty free".

I assume the reason is that there is no duty anywhere in HK anyway so it would be misleading to describe themselves as "duty free" so they came up with the next best thing to make people think there is some sort of advantage to buying at the airport. Everything I have priced at the airport has always turned out to be cheaper in town and sometimes considerably cheaper.

My method to avoid DCC in areas notorious for imposing it on you is to either use an amex card or pay cash.

Incidentally I've always found the name of those shops at HKG amusing - "free duty" instead of "duty free".

I assume the reason is that there is no duty anywhere in HK anyway so it would be misleading to describe themselves as "duty free" so they came up with the next best thing to make people think there is some sort of advantage to buying at the airport. Everything I have priced at the airport has always turned out to be cheaper in town and sometimes considerably cheaper.

My method to avoid DCC in areas notorious for imposing it on you is to either use an amex card or pay cash.

tobacco is much cheaper at the airport. I think alcohol is too.

Incidentally I've always found the name of those shops at HKG amusing - "free duty" instead of "duty free".

I assume the reason is that there is no duty anywhere in HK anyway so it would be misleading to describe themselves as "duty free" so they came up with the next best thing to make people think there is some sort of advantage to buying at the airport. Everything I have priced at the airport has always turned out to be cheaper in town and sometimes considerably cheaper.

There are duties on cigarettes and liquor in HK http://www.customs.gov.hk/en/trade_facilitation/dutiable/types/index.html

My method to avoid DCC in areas notorious for imposing it on you is to either use an amex card or pay cash.

Correct. Or Unionpay if available from your local banks, but I understand no Australian bank is a Unionpay issuer yet.

tobacco is much cheaper at the airport. I think alcohol is too.

Thanks for the info. I hadn't priced either as I don't smoke and it's not possible to carry on liquids in volume >100ml from HKG to Australia due to some daft Australian security rules. They were doing hand searches at the gate last week to make sure no liquids were being carried aboard.