Go Back  FlyerTalk Forums > Miles&Points > Credit, Debit and Prepaid Card Programs > Credit Card Programs
Reload this Page >

Dynamic Currency Conversion (DCC) [2014-2016]

Old Jan 18, 2014, 10:10 pm
FlyerTalk Forums Expert How-Tos and Guides
Last edit by: emilio911
What is it?

Dynamic Currency Conversion (DCC) is a "service" some merchants and ATM operators offer that will charge a cardholder in the native currency of the card rather than the local currency. A more complete definition and examples are available via this Wikipedia article on DCC. While sold as a convenience to cardholders traveling outside of their home country, it is a pure profit play by the merchants. You may end up paying a fee of up to 8% over the purchase price for accepting DCC. Always decline DCC and asked to be billed in the local currency!



Where will I see it?

You can be hit with DCC anywhere there is a difference between your debit or credit card's denominated currency and the currency of the location where you're trying to use the card. The most common example will be at a merchant overseas, but now some ATMs are offering the service too. While many US cardholders complain about getting tricked into accepting DCC overseas, some merchants in the US have started to use DCC as well.

What is the issue?

Unless you're the merchant or ATM operator, there isn't much benefit to using DCC. Some customers say they prefer knowing exactly how much they'll be charged in their home currency or may not know the exchange rate of the place where they are visiting. For example, if you are in Prague for two days and you don't know how much the Czech Koruna is worth relative to the US Dollar, you might feel more comfortable knowing that you're buying an item for $205.00 versus 4000 CZK. However, the real exchange rate as of January 18, 2014 would place 4000 CZK at $197.18. You just paid an extra $7.82 for the "convenience" of knowing how much you'd be charged!

DCC often charges about a 4% premium over the true exchange rate. The problems don't stop there since many US banks still charge a 3% foreign transaction fee (FTF) for purchases made outside of the US. Not only would you get hit with the $205.00 charge, you could also find yourself facing a total charge of $211.15 if your card has a 3% FTF.

This is a pure money grab from the merchants, and it's billed as an easy way to squeeze additional revenue out of the transaction. Numerous [1, 2] articles have talked about DCC duping many consumers. Discover even has a warning about being tricked into DCC when using a card abroad.

For example, this FlyerTalk member reported that Avis charged his Saudi credit card in Saudi riyals instead of USD for a car rental in Florida without his consent. This has also been a trend for hotels, particularly large chains as indicated here and here.

DCC is simply not worth it for the consumer. Unless you like paying a convenience fee of up to 5% of the total transaction just to know how much you will be billed, you should always decline DCC and ask to be billed in local currency when handing over your card.

Furthermore, it is in your interest to obtain a card that has a 0% FTF. FlyerTalk member kebosabi maintains a fairly comprehensive spreadsheet of EMV-enabled cards ideal for overseas travel, many of which offer a low or 0% FTF as a feature. There is also a wiki at FlyerGuide of various FTF of debit and credit cards.

What can I do to avoid DCC?

American Express currently does not support DCC on its network, so you are safe from DCC if using an American Express card. However, Visa and MasterCard card networks can support DCC, so be vigilant when purchasing abroad with a Visa or MasterCard branded card. There have been reports of being charged DCC with a Discover card in China [citation needed], but primarily the issue is happening with Visa and MasterCard cards.

Before handing your card to the merchant, always specify clearly that you want to be charged in the local currency and that you do not want DCC. For some transactions, you retain control of your card as you dip it into a chip reader and can view on a screen to select which currency you want to use for the transaction. Always select the local currencyto get the best exchange rate. Do not select the card's native currency!

Similarly, for ATM withdrawals, make sure you decline any kind of conversions. Some good examples of what to look for when using an ATM overseas are here and here. You're probably coming off of a long flight and fatigued, but educating yourself beforehand can save you from getting ripped off. The user interfaces on almost all of these ATMs are set up to encourage you to take the bait, and you have to be extremely vigilant not to fall for it.

If you are doing a PIN-based transaction, you should have the opportunity to review the total amount and denomination of the transaction before entering your PIN. If you are doing a signature transaction and the merchant has processed your transaction with DCC, cross out the amount and write "DCC refused" on the receipt. Do not sign the receipt, and demand that the merchant reverse the transaction and run it in the local currency. If no verification is required due to a small purchase amount, ask the merchant to reverse the charge and repeat the transaction using local currency. If all else fails, file a dispute with your card issuer when you return home. Even if it's immaterial, the banks will get the message like they did with EMV.

Some merchants will claim that their systems have to bill you in your native currency. This is a complete lie. But just like a mag stripe only card, this is battle where you have to be prepared. Don't settle for merchants claiming that "it has to be done this way" or "pay cash if you don't want this". Be prepared to walk away, and, if you must complete the transaction, write "DCC refused & merchant didn't give a choice" on the receipt and cross out the amount. Let the merchant know that you will be filing a dispute with your bank.

Disabling DCC

Disabling DCC on ANZ terminals in Australia

ANZ markets DCC as Customer Preferred Currency (CPC). Terminal operators can contact ANZ Merchant Services at 1800 039 025 to have this feature disabled. Currently, your Visa or MasterCard will be subjected to DCC if denominated in: CAD, CHF, DKK, EUR, GBP, HKD, JPY, MYR, NOK, NZD, SEK, SGD, THB, USD, or ZAR. All DCC transactions on ANZ will cause a 2.5% markup. Steps to avoid DCC:
  1. Insert, swipe, or tap your payment card
  2. Have the cashier select credit (CR)
  3. The terminal will display CREDIT ACCOUNT
  4. If applicable, enter your PIN
  5. The terminal will display PROCESSING \ PLEASE WAIT
  6. The terminal will display EXCH <exchange rate> \ <currency> <amount> \ ACCEPT RATE? \ ENTER=YES CLR=NO
  7. Instruct the cashier to press the yellow CLEAR (CLR) button (If entering a PIN, you can retain the terminal to perform this step yourself. If entering a signature, you can ask for the terminal to control this process, not indicating that it's a chip-and-signature card.)
  8. The transaction should now process without DCC

If you see a signature slip with DCC verbiage and a checkbox indicating a currency selection, kindly ask the merchant to void the transaction. If it's a PIN-based transaction, you have an additional opportunity to cancel the transaction because it will ask for your PIN a second time. For instance, if you see "EUR 17.29 KEY PIN" refuse to enter your PIN and start again.

Disabling DCC in China

There are many reports of forced DCC in China, and there is a great thread [closed to new posts] on DCC in China on the the China Destinations forum.

Disabling DCC on Bankcomm terminals in Beijing http://www.hongkongcard.com/forum/fo...p?id=12272&p=2 #19

jair101's DCC instructions of March 2011 http://www.etveg.com/misc/DCC_China.pdf

Disabling DCC in Eurozone and UK

DCC offered in tourist traps (Harrods Knightsbridge/Galleries Lafayette Montparnesse/El Cortes Ingles Grand Via Madrid)

Unlike the rest of the world, Visa Europe does not require merchants to collect a ticked box on the slip (presumably because merchants there don't keep signed slips under Chip-and-PIN)
El Cortes Ingles collects a signature electronically and the DCC selection is made on the signature pad - the choice is respected.
Harrods and GL rely on cashier input in the POS for the currency choice - the cashier may forget to ask. The POS do not offer voiding (only refunds), but since you're given a slip to sign the best thing to do is to deface it before signing and submit chargeback request to issuer bank on return home.

There may be smaller merchants who also collect DCC but I seemed to have pre-empted most of them by saying "charge Euros (Pounds) please"

In Spain all merchants by law are required to provide you with a complaint form called an hoja de reclamaciones if requested. The form has two carbon copies. The customer retains one copy as a record of the complaint. The merchant maintains another copy, and the third is sent to the local consumer protection bureau. Merchants are also required to post a sign conspicuously informing the customer of the right to complain (usually in Spanish and English). Do not accept the lie that they don't have any forms. This is illegal, and you are able to call the police if the merchant refuses to provide you with this official form. It's interesting to see merchants start to squirm when you know the rules, and most merchants will start to be accommodating after you mention it. (Please still fill out the form even if the merchant cooperates after mentioning it because these are likely the merchants who won't otherwise change their behavior.)

Disabling DCC in Hong Kong and Macau

Hong Kong and Macau can get as non-compliant as China, possibly because many acquirers have cross-border operations and know they can get away with non-compliant firmware and procedures.

In practice, if you are given a DCC slip, and the cashier has not taken a choice before giving you your copy, the slip will be processed in your home currency - be prepared to dispute.

Unable to disable Global Payments DCC in Hong Kong instance #1, instance #2

Unable to disable DBS DCC in Fortress Electronics HK

Unable to disable BoC DCC in Free Duty HK

Disabling DCC in Japan and Korea

Japan's just starting out http://www.flyertalk.com/forum/japan...ing-japan.html and http://www.hongkongcard.com/forum/fo...p?id=3939&p=17 #168 but there are no reports I know of where cardholders are compelled to use DCC against their will.

Korea is also not much affected by DCC but where offered, trying to opt out is harder than Japan due to the language barrier (both verbal and written)
http://www.hongkongcard.com/forum/fo...hp?id=4303&p=3 #23
http://www.hongkongcard.com/forum/fo...p?id=12272&p=2 #11

Disabling DCC in the Maldives

Disabling DCC on Global Payment terminals in the Maldives

Disabling DCC in Thailand and Taiwan

DCC present but generally not an issue. Cashier will generate quote slip is usually generated and pass to cardholder. When cardholder refuses, a verbage-free slip denominated in THB/TWD will be produced.

Certain Taiwan hotels may take deposits in cardholder currency. But these are only pre-authorisations and can be voided in full for TWD-only final checkout payments.

Disabling DCC on Websites

Airbnb - (Since the "loophole" seem not to work anymore, please report if you chargeback the DCC. )
Hotwire - You need to select your preferred currency before making a search.
PayPal - The instructions to stop the DCC on a recurring charge are here.

I got duped by DCC already before I found this thread. Is there anything I can do?

If you've been hit with DCC and the merchant did not follow the Visa/MC rules, you should file a dispute with your card issuer. Even if the transaction is a small amount, it's worth it to dispute the charge on principle. Do not let merchants get away with this scam uncontested!

If you were not clearly given a choice of currencies and did not specifically communicate a preference to be billed in your card's native currency - if you did not accept DCC - then you have recourse when filing a dispute with your card issuer. The Visa Product and Service Rules clearly state (p 339):
  • Merchants that offer DCC must be compliant with the regulations
  • Inform the cardholder that DCC is optional
  • Not impose any additional requirements to use local currency
  • Not use any language or procedures that may cause the cardholder to choose DCC by default
  • Not convert a transaction in the local currency to the card's billing currency after the transaction has completed
  • Ensure that the cardholder expressly agrees to DCC

You can even use terminology from Visa Product and Service Rules when filing the dispute, giving Reason Code 76: Incorrect Currency or Transaction Code. Reason Code 76 is used when the transaction was processed with an incorrect transaction code, or an incorrect currency code, or one of the following:
  • Merchant did not deposit a transaction receipt in the country where the transaction occurred
  • Cardholder was not advised that Dynamic Currency Conversion (DCC) would occur
  • Cardholder was refused the choice of paying in the merchants local currency
  • Merchant processed a credit refund and did not process a reversal or adjustment within 30 calendar days for a transaction receipt processed in error

MasterCard's rules also clearly state that the POI Currency Conversion must be decided by both the merchant and customer. When filing a dispute with a MasterCard, list chargeback Reason Code 4846 from the MasterCard Chargeback Guide, which covers POI currency conversion disputes in the following circumstances:
  • The cardholder states that he or she was not given the opportunity to choose the desired currency in which the transactions was completed or did not agree to the currency of the transaction, or
  • POI currency conversion took place into a currency that is not the cardholder's billing currency, or
  • POI currency conversion took place when the goods or services were priced in the cardholder's billing currency, or
  • POI currency conversion took place when cash was disbursed in the cardholdeer's billing currency.

You do have a choice of currencies. Exercise that choice!

Do not get taken by surprise when faced with DCC, and know your options. As Visa/MC purport, you do have a choice of currencies, but you need to make that choice heard! Don't be complacent in this sneaky tactic by some merchants to pad revenues.

Before going to a different country, get educated. Understand the exchange rate relative to your native currency. Know how to recognize when the merchant is trying to force DCC on the transaction, and pull out all of the stops to make sure it doesn't happen to you.

If you have a chip-and-PIN credit card, it's easier to control the transaction to try to prevent DCC. With chip-and-signature, if you get an uncooperative merchant, deface the merchant's copy of the receipt. Write LOCAL OPTION NOT OFFERED, cross out the DCC currency amount, and sign the receipt.

This will give additional evidence when filing a dispute to get the DCC charges refunded. When filing the dispute, you can use the Visa Exchange Rate Calculator or MasterCard's Currency Conversion Tool to determine the Visa or MasterCard exchange rate on the date the transaction posted to your credit card. Compare this to the DCC value to figure out the amount by which the merchant overcharged you. Don't forget to add in any Foreign Transaction Fee if your card has one. (If it does, you should really consider finding a card for use overseas without a FTF. )

Example Images (click for a larger image)

Hotel receipts in China, the Netherlands, and Dubai respectively:



Purchase receipts in China and Korea:




Cancelled translation in Hong Kong:



Novotel in Shenzen:

Print Wikipost

Dynamic Currency Conversion (DCC) [2014-2016]

Old Jul 20, 2015, 3:14 am
  #2026  
Original Poster
 
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,027
Originally Posted by oliver2002
Our company requires you to report the expenses in the local currency shown on the receipt (not the CC charge slip), which is then converted at the daily exchange rate valid at the date of the receipt and a standard 1or 2% is added automatically to cover any fx variances for you. The background here is that our company provides us with fee free credit cards (Amex and Visa) which AFAIK have a fx transaction fee. This ~2% roughly covered the DCC 'spread' encountered by my colleague, until he was hit at the DXB luxury hotel .
My current employer also converts at the daily exchange rate, so things are fairly equal with card use overseas. For exchange rate discrepancies - I don't know how much this would carry over for DCC - one can submit a redacted credit card statement showing the USD charge. My previous employers issued Corporate AmEx cards for purchases. One required its use unless it wasn't an option, and the other preferred its use. In both of these cases, exchange rates were reconciled automatically and, being AmEx, DCC was never an issue.
Majuki is offline  
Old Jul 20, 2015, 4:41 am
  #2027  
Moderator: Lufthansa Miles & More, India based airlines, India, External Miles & Points Resources
 
Join Date: Dec 2002
Location: MUC
Programs: LH SEN
Posts: 48,001
Yep, when I was working in US we also had an Amex (green for all, Plat for Directors and above) paid by the employer directly, so I had to just explain the individual charges in concur each month. Any DCCed charges (amex doesn't have DCC, but just as an example) would have been OK. Same company here in Germany gives you the option to use your own CC (not all Germans have a CC!) or use the company secured Amex or Visa, but you have to submit an expense report for each trip separately.
oliver2002 is offline  
Old Jul 20, 2015, 7:09 am
  #2028  
 
Join Date: Jul 2007
Posts: 1,762
With almost every credit card today, within a day, the amount of the charge in the currency of the card is posted online between billing periods. What's the big deal about pulling that information directly from the online lists?
JEFFJAGUAR is offline  
Old Aug 3, 2015, 12:51 am
  #2029  
Ambassador, Hong Kong and Macau
 
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,671
CCB (Asia) (in HK) warning to cardholders about DCC

http://www.flyertalk.com/forum/catha...l#post25212718
http://www.asia.ccb.com/hongkong/pro...rds/index.html

Smart Tips: Reasons for not paying in HKD?
1.Settling foreign currency transaction in HKD may incur higher cost to cardmember.
2.Settling foreign currency transaction in HKD is not eligible for the program.
percysmith is offline  
Old Aug 3, 2015, 2:23 am
  #2030  
KvR
 
Join Date: Feb 2014
Posts: 5
Poland

Yesterday I used the PayPass function of my Euro MasterCard for the first time in Poland, an irritating country concerning DCC. But Poland is completely on contactless. And using PayPass is very relaxed. No DCC.
KvR is offline  
Old Aug 3, 2015, 3:09 am
  #2031  
 
Join Date: Jun 2013
Posts: 81
DCC in Macau

Encountered forced DCC at Galaxy buffet, City of Dreams Ding Tai Fung, and a smaller restaurant with my US card. Hyatt hotels gave me a choice between MOP and USD. Stopped using my card after that.
cxua is offline  
Old Aug 3, 2015, 4:13 am
  #2032  
Ambassador, Hong Kong and Macau
 
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,671
Use Amex or Unionpay in Macau

Acquriers in Macau propagate the non-compliant practices of their Chinese parents without much regulation.
percysmith is offline  
Old Aug 3, 2015, 9:03 am
  #2033  
Original Poster
 
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,027
Originally Posted by percysmith
Use Amex or Unionpay in Macau

Acquriers in Macau propagate the non-compliant practices of their Chinese parents without much regulation.
While I sometimes use AmEx in these situations - UnionPay isn't an option for those of us based stateside - I feel it helps maintain the status quo for DCC. While there aren't many examples, we have seen examples of merchants that formerly forced DCC but either changed policies or "discovered" a method of disabling DCC on their terminals due to customer complaints/chargebacks.
Majuki is offline  
Old Aug 3, 2015, 9:07 am
  #2034  
 
Join Date: Dec 2010
Location: NJ, USA
Posts: 470
Originally Posted by Majuki
While I sometimes use AmEx in these situations - UnionPay isn't an option for those of us based stateside - I feel it helps maintain the status quo for DCC.
Can't you use Discover cards wherever UnionPay is accepted?
Olly- is offline  
Old Aug 3, 2015, 10:28 am
  #2035  
 
Join Date: Nov 2014
Location: NYC
Posts: 556
Originally Posted by Olly-
Can't you use Discover cards wherever UnionPay is accepted?
Not really, especially if you have an EMV Discover card, as the EMV chip on a Discover card doesn't have the UnionPay AID, so it has to be a fallback transaction, which lots of people report problems with.

There are also lots of acquirers that have banned the Discover BINs from being processed even though they should go across the UnionPay network. China and her children don't really seem to care about following rules of payment processors.
NYCFlyer10001 is offline  
Old Aug 3, 2015, 11:34 am
  #2036  
 
Join Date: Mar 2007
Location: EWR-SEA-IAD
Programs: UA 1P MM, AS MVP G*, SPG Gold, Hyatt Plat, IHG Plat, Hilton Diamond, Marriott Gold
Posts: 977
I've complained to them countless times about the discover EMV issue in China. Nothings been fixed yet...
HGHUA is offline  
Old Aug 4, 2015, 1:52 am
  #2037  
FlyerTalk Evangelist
 
Join Date: Jan 2014
Location: San Diego, CA
Programs: GE, Marriott Platinum
Posts: 15,486
Is the Discover debit card EMV enabled yet? If not, opening a checking account with them might be a reasonable workaround (currently $50 bonus if you have a Discover card already + 10c every time you use the card).
tmiw is offline  
Old Aug 4, 2015, 8:09 am
  #2038  
 
Join Date: Nov 2014
Location: NYC
Posts: 556
Originally Posted by tmiw
Is the Discover debit card EMV enabled yet? If not, opening a checking account with them might be a reasonable workaround (currently $50 bonus if you have a Discover card already + 10c every time you use the card).
Oh, that's a clever workaround. The debit card is not EMV enabled.
NYCFlyer10001 is offline  
Old Aug 4, 2015, 10:49 pm
  #2039  
 
Join Date: Feb 2013
Location: Irvine CA & PEK
Programs: Hyatt Globalist, Marriott Titanium, Hilton Diamond, IHG Spire Ambassador, Qantas Platinum, United S
Posts: 664
Originally Posted by NYCFlyer10001
There are also lots of acquirers that have banned the Discover BINs from being processed even though they should go across the UnionPay network. China and her children don't really seem to care about following rules of payment processors.
That's typical China.

When everything should go to the UnionPay center for processing, lots of acquirers actually setup their interlinks so they circumvent. That's why you see well below worldwide average or zero fees for doing the same things in China. This is to attract the majority of Chinese people who don't have as much real spending power as worldwide average. But this creates a lot of problems, which money saving Chinese majority doesn't really care, as long as they can get the same things done for less...
zyxlsy is offline  
Old Aug 5, 2015, 6:44 am
  #2040  
 
Join Date: May 2009
Location: SIN (with a bit of ZRH sprinkled in)
Posts: 9,442
For me, its pretty simple.

Whenever I am in the (real) #1 power in the world (sorry US Americans, aint you anymore) I will use Amex. If not possible, cash. Visa and MC, go f..... yourself. As long as you support cheating on your customers, I dont support your business.
YuropFlyer is offline  

Thread Tools
Search this Thread

Contact Us - Manage Preferences - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

This site is owned, operated, and maintained by MH Sub I, LLC dba Internet Brands. Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Designated trademarks are the property of their respective owners.