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FlyerTalk Forums Expert How-Tos and Guides
Jan 18, 2014, 10:10 pm by emilio911What 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:
- Insert, swipe, or tap your payment card
- Have the cashier select credit (CR)
- The terminal will display CREDIT ACCOUNT
- If applicable, enter your PIN
- The terminal will display PROCESSING \ PLEASE WAIT
- The terminal will display EXCH <exchange rate> \ <currency> <amount> \ ACCEPT RATE? \ ENTER=YES CLR=NO
- 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.)
- 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:
#1291
YesterdayQuote:
I've never made a credit card purchase in Africa, so I can't explain there. I only did a day trip from Algeciras, but my guess is that DCC wouldn't be prevalent in a place like Morocco. I wasn't willing to find out at the carpet shop though!Originally Posted by JEFFJAGUAR
Of course my most familiar experiences in seeing DCC in action have occurred in Europe. I am not familiar at all with practices in Asia oar Australia or Africa. Anybody with any of the other oies employed to scam people that I missed?
I can only speak for Taiwan, HK, and Macau DCC experiences in Asia. Taiwan is very compliant - after a period of being extremely non-compliant. It also helps traveling with a native speaker. On my most recent trip to HK, I was able to opt out of DCC successfully at every place but Greyhound Cafe when I was with percysmith. Some restaurants in HK and Macau don't respect DCC choices, and you have to be wary when you get the carbon copy paper with the check box. You need to make sure that the cashier can input something to disable DCC after you've seen the verbiage.
DCC, at least as of June, was still uncommon in Australia. In my seven trips there in the last three years I have only seen DCC twice, both times in Brisbane. The first was at Coffee and Chocolate at Queens Plaza in Brisbane (unexpected) and the second was at F1RST Tax & Duty Free at BNE (expected). In the first case the girl had handed me the terminal to enter my PIN (even though I was using a US chip-and-signature card), and I saw the prompt, "USD 23.7X OK?" The cashier was monitoring and said, "Just press ok?" when we both stared at the prompt. I don't think she had ever dealt with a non-AUD card before, and her confused look indicated she wasn't trying to get me to accept DCC. I used the opportunity as a brief educational moment. "Sometimes the banks offer an opportunity for unsuspecting tourists to pay in the home currency, but it's a rip-off exchange rate. It's just another opportunity for these banks like ANZ to make money." Oh? ANZ is pulling the scam? Now we have a common nemesis. Heh heh heh... In fairness, I saw a bunch of other ANZ terminals in use that did not employ DCC, so I don't think the DCC cancer is widespread. There was another case of an eatery in Strathfield, but this is extremely rare. I've generally found the service in Australia to be friendly and accommodating. Known DCC culprits like David Jones and Myer can easily be avoided by specifying upfront that there will be an option, and you want to decline the option and pay in AUD.
#1293
Quote:
Was this a small store or a larger department store? We haven't had any reports from India so far, so this is bad news. There was no way to opt-out?Originally Posted by slickvik
Got hit with this at a store and hotel in Delhi , 4.5 and 4%
#1294
NYCFlyer10001 , Nov 2, 2014 1:20 pm
I was hit with DCC at the Oberoi Hotel in Bangalore in July. They were able to void it and refund but they defaulted to a DCC transaction with a ripoff exchange rate.
It also had what I think is one of the worst disclosures of the actual price (look how tiny the USD price is printed):
It also had what I think is one of the worst disclosures of the actual price (look how tiny the USD price is printed):
#1295
Quote:
Small store in chandni chowk.Originally Posted by Majuki
Was this a small store or a larger department store? We haven't had any reports from India so far, so this is bad news. There was no way to opt-out?
#1296
Having been swiping and chipping in Sydney for days. Never encountered DCC.
The point that in a fine dining place, you have to write down the tip amount first is kind of awkward. Then the waiter would keep saying thank you all the while they are making the CC transaction...
The point that in a fine dining place, you have to write down the tip amount first is kind of awkward. Then the waiter would keep saying thank you all the while they are making the CC transaction...
#1297
Quote:
The point that in a fine dining place, you have to write down the tip amount first is kind of awkward. Then the waiter would keep saying thank you all the while they are making the CC transaction...
With the one sit-down restaurant here in the US where I used a chip card, it seemed possible to put tip amounts before and after authorization. It was pay at the counter so they put $0.00 for tip before running it and the receipt had a line to enter tip right below the $0.00 they entered. Weird that it was only before authorization there.Originally Posted by zyxlsy
Having been swiping and chipping in Sydney for days. Never encountered DCC.The point that in a fine dining place, you have to write down the tip amount first is kind of awkward. Then the waiter would keep saying thank you all the while they are making the CC transaction...
#1298
Quote:
Welcome to FlyerTalk. Thanks for sharing your experience. I'm glad you were able to get the hotel to void the transaction without too much issue. I agree that the disclosure there is subtle. I wonder if on the merchant copy the box was already checked? It seems like in this case you have to explicitly agree to the DCC, but we know that more often than not DCC happens by default.Originally Posted by NYCFlyer10001
I was hit with DCC at the Oberoi Hotel in Bangalore in July. They were able to void it and refund but they defaulted to a DCC transaction with a ripoff exchange rate.
Quote:
The point that in a fine dining place, you have to write down the tip amount first is kind of awkward. Then the waiter would keep saying thank you all the while they are making the CC transaction...
It's been my experience that DCC is rare in Australia, but it can still happen. David Jones, Myer, and duty free shops and airports are the prime locations for DCC in Australia. You don't have to worry too much with most restaurants and cafes although DCC can happen.Originally Posted by zyxlsy
Having been swiping and chipping in Sydney for days. Never encountered DCC.The point that in a fine dining place, you have to write down the tip amount first is kind of awkward. Then the waiter would keep saying thank you all the while they are making the CC transaction...
#1299
percysmith , Nov 3, 2014 9:27 pm
Ambassador, Hong Kong and Macau
TodayI didn't bother with card tips in France - I cashed everyone out. They didn't seem to want to ask even though I thought they deserved it (whenver they were less arrogant than expected).
#1300
Quote:
I did make a purchase at David Jones (wonder what the owner of the department store felt when Pirates of the Caribbean was premiered), and didn't see DCC. I believe duty free could be different.Originally Posted by Majuki
It's been my experience that DCC is rare in Australia, but it can still happen. David Jones, Myer, and duty free shops and airports are the prime locations for DCC in Australia. You don't have to worry too much with most restaurants and cafes although DCC can happen.
Quote:
To me, US is the most tipped country, and it's maybe the only place that you can put a tip on CC after the authorization. Like UK, France, Australia, you need to tell them before hands how much you tip them so they run the card by that new amount.Originally Posted by percysmith
I didn't bother with card tips in France - I cashed everyone out. They didn't seem to want to ask even though I thought they deserved it (whenver they were less arrogant than expected).
#1301
Quote:
I wondered the same thing. Originally Posted by zyxlsy
I did make a purchase at David Jones (wonder what the owner of the department store felt when Pirates of the Caribbean was premiered), and didn't see DCC. I believe duty free could be different.
I have yet to make a purchase at either department store, so I haven't encountered DCC personally. There have been reports of others who have, however. Duty free is almost always a sure bet for DCC anywhere in the world.Quote:
To me, US is the most tipped country, and it's maybe the only place that you can put a tip on CC after the authorization. Like UK, France, Australia, you need to tell them before hands how much you tip them so they run the card by that new amount.
It's definitely not the only place, but I would say the US and Canada are the two most common places where you would sign in the tip. I always feel slightly uncomfortable with the waiter hovering over me as I enter the tip, especially if I'm in a country where tipping isn't common. I usually match local customs, so I'm sure I've slighted some waiters by giving a 0-10% tip in locations where perhaps they've gotten a 15-20% tip from Americans before. I will certainly adjust if there is an included service charge or if the establishment deliberately tries to DCC me.To me, US is the most tipped country, and it's maybe the only place that you can put a tip on CC after the authorization. Like UK, France, Australia, you need to tell them before hands how much you tip them so they run the card by that new amount.
#1302
JEFFJAGUAR , Nov 4, 2014 3:24 pm
Quote:
To me, US is the most tipped country, and it's maybe the only place that you can put a tip on CC after the authorization. Like UK, France, Australia, you need to tell them before hands how much you tip them so they run the card by that new amount.
Well not quite true. I know of one London restaurant chain, there have to be more, where while you can argue the actual authorization does not take place till after the tip is entered, they hand you the terminal either after swiping the card (US mag strip) or inserting the emv card and then tell you to follow the instructions on the screen which starts by asking you whether you wish to enter a tip and guides you through the process which at the end asks for a pin if card is c&p and then tells you to return the terminal to the waiter/waitress who presses a button to authorize and complete the transaction. If a signature is required, it prints a signature slip for you to sign. It ends the thing by printing a receipt for you.Originally Posted by zyxlsy
I did make a purchase at David Jones (wonder what the owner of the department store felt when Pirates of the Caribbean was premiered), and didn't see DCC. I believe duty free could be different.To me, US is the most tipped country, and it's maybe the only place that you can put a tip on CC after the authorization. Like UK, France, Australia, you need to tell them before hands how much you tip them so they run the card by that new amount.
#1303
Quote:
I've only seen this at Wagamama, as you've described, and at Outback Steakhouse at Niagara Falls (before it closed). I think from a DCC perspective I prefer this because you have control of the terminal throughout the transaction. With the way it works in these scenarios, you'd have more control to abort the transaction if you get a hint of forced DCC.Originally Posted by JEFFJAGUAR
Well not quite true. I know of one London restaurant chain, there have to be more, where while you can argue the actual authorization does not take place till after the tip is entered...
#1304
Quote:
My first ever DCC experience was in Australia, back in 2007, at a cafe on the north side of Sydney harbor, near a ferry dock. The lady said the DCC was automatic & unavoidable because my card was American. I accepted it that time, but now I know better.Originally Posted by Majuki
It's been my experience that DCC is rare in Australia, but it can still happen. David Jones, Myer, and duty free shops and airports are the prime locations for DCC in Australia. You don't have to worry too much with most restaurants and cafes although DCC can happen.
#1305
Quote:
Just did a purchase on the top floor of DFS Sydney (so small), charged me AUD without any human interaction... Maybe Australia has been cleansed?Originally Posted by Majuki
Duty free is almost always a sure bet for DCC anywhere in the world.
Quote:
I've seen this before in a Chinese restaurant in Denmark, where the waiter tells you push this button for tip and push that button for no tip (when I tipped according to US standard, she was shocked)... To me in a country where tipping is not common, a POS like this let customers feel uneasy...Originally Posted by JEFFJAGUAR
Well not quite true. I know of one London restaurant chain, there have to be more, where while you can argue the actual authorization does not take place till after the tip is entered, they hand you the terminal either after swiping the card (US mag strip) or inserting the emv card and then tell you to follow the instructions on the screen which starts by asking you whether you wish to enter a tip and guides you through the process which at the end asks for a pin if card is c&p and then tells you to return the terminal to the waiter/waitress who presses a button to authorize and complete the transaction. If a signature is required, it prints a signature slip for you to sign. It ends the thing by printing a receipt for you.
Either way, in these countries, tip must be included in the transaction amount in the first place (and you can tell tipping is not mandatory in these countries). Anyway, I do feel that the US routine is better, that you can just leave your signed slip with the tip amount and go.