Happy

Even when we specified to pay in local currency, the contract still spilled out with a clause that we "are informed, and agreed" to have local currency converted to our billing currency. The manager claimed it was a default option on the contract and he forgot to check it off despite he fully agreed that we had requested so. He re-did the contract but did not give us an English translation any more.

At car return we crossed out the clause and demanded the clerk to verify with the system that such option was dropped. It took them a few minutes to fiddle on their keyboard to get it done. Bill came out in Swiss Franc.

Now we have an Avis bill from Auckland airport that I have to see the card statement when we return home to know whether it is billed in NZD or in USD. The authorized amount is some 5% lower than the billed amount, led me to suspect that it has suffered the conversion eventhough the contract / receipt from the return are shown in NZD.

bjerregaard

This should be a "sticky" on AM, Diners and Other Credit Cards. Any moderators?

superflush

yea, I think we should also keep a list of 1. places that force DCC without asking.

USAFAN

You may still be charged with conversion.

I often rent with AVIS but only recently I detected the fine print you are mentioning.
All my bills showed Euro. However, they converted Euro to US $ and than charged my Euro CC with Euro ... higher than the amount of the bill.
Last time when I returned the car I asked the Avis agent to change this. He did. By now are NO charges on my Euro CC card?!? And I returned the car to FRA one month ago!?!

Is there a way to change that default option
"the clause that we "are informed, and agreed" to have local currency converted to our billing currency" when we make a reservation or even better in the account?

percysmith

I just lost HK$50 in (around US$6.5) in inflated RMB/HKD exchange rates and about HK$63 (around US$8.1) in my card issuer's foreign currency transaction cash back due to Dynamic Currency Conversion on my HKD Visa card.

The transactions were incurred in Mainland China. Consumer rights and customer service levels are pretty low. The merchant (when I called them back to review) said they had no choice to turn off DCC, even for future transactions.

I notice AE doesn't have DCC for similar Mainland China transactions or for Amazon. Can we use to avoid merchants adding on DCC? If yes, I'm voting with my feet - let Visa/MC know that *crime* doesn't pay!

Mountain Trader

I've always understood that with US card companies, you are responsible for, and only for, the charge you sign for.

If the charge is in local currency, your card company (not the merchant's processor) will convert that foreign currency charge to dollars. This is almost always at an acceptable exchange rate, though you may pay an exchange fee charged by your card company. If I were charged anything other than I've described, I would deny the charge with my credit card company since I never agreed to it. Denials like this not only protect your money, but offer the added satisfaction of really clogging up the system with paperwork between the DCC banditos-the merchant and its processor.

If you were offered a choice between local currency or dollars, or you were offered dollars (with or without an opt out) and signed the charge slip, I'm afraid you're stuck. Here again, you agreed to the charge and that's what you gotta pay.

I was in Denmark earlier this year and using a credit card there was like a carnival arcade. Some places charged a flat 2.5-4.0% surcharge for using a foreign credit card, with signs stating that their bank "makes them do it". Others don't take foreign cards at all. One offered me DCC but had an opt out notice on the charge slip. I asked to be charged in foreign currency and they redid the charge-from the way they handed it, I think that happens a lot at that merchant. At dinner on our last night in Copenhagen, an American woman at the next table got slammed with the everything-the waiter said there was a 3% surcharge for using an overseas card, he said they did the charge in dollars to "save you a fee", and to top it off, told her no tip had been added to the bill "yet"-true if you ignore the flat service charge built into all restaurant tabs.

I know your topic was DCC should be outlawed and I agree. I thought adding a summary might help others.

percysmith

I won't even bother disputing with my HK issuer. This particular issuer also has the worst record of customer service in HK (but had a 3% rebate promotion going on when I processed my transaction).

There were no opt out notice in my China slip, by opt out do you mean I can tick a box and still get billed in local currency, or must the transaction be voided?

Also, is DCC with Visa and Mastercard only, or has anyone figured out how to do it with Amex?

Mountain Trader

By opt out I mean the charge is presented in your home currency, but there is a stated notice on the charge slip that you can choose to have the charge in local currency. Whether the charge has to be voided if you opt out depends on whether it was run through before presenting it to you to sign-usually it would have been so it would have to be voided and a new charge run through in local currency.

I think DCC is the work of the merchant's processor so I imagine it could be done on Amex as well, though I don't know that for a fact.

If you're not willing to push this back through your card company, then you're signing up for whatever shenanigans are thrown at you, which in places like China will be a lot. Your choice.

Jaimito Cartero

Always pay in local currency, unless for some strange reason your home currency is cheaper.

I'd simply refuse to sign the slip if presented as USD.

percysmith

Good if you can spot it. My slip is like:

RMB 324.00

RATE: 1.20022 NO Commission Fee
TXN CUR (BASE AMT): HKD388.87

I'm wondering - outside of China, is the local currency amount stated as well as the DCC currency amount?
Stating both (esp with one larger than the other) is hugely misleading.

gil123

Resuscitating my old rant thread because just got back from another trip and this sleazy practice is alive and well. Was in Antigua, Caribbean, and several restaurants and shops presented me with bills converted into USD. When I said I want to pay in local currency, XCD, they said that it is impossible, that their registers cannot do that with foreign cards. Short of standing there and causing a scene or keeping records of the amount in local currency, coming back and calculating and disputing every DCC transaction at inflated rates, what can you do?

kebosabi

Here are some misconceptions that I see here:

Merchants do not sign up directly with VISA. VISA has a relationship with a local bank, the local bank then loans out the machines to the merchants for them to process VISA transactions.

Banks, "in their best interest", do not give detailed instructions to the merchants on how to use the credit card machine. At best, they give one of those "simple setup" papers which show "swipe card/insert EMV chip here," "enter amount here," "let the machine do the rest" "don't touch anything else, if you do, we're not liable for you breaking the machine and you owe us [insert inflated price] for the credit card machine that's loaned to you."

That's the extent of training merchants get. Care to guess what the default setting banks set their credit card machines loaned out to merchants are set to? DCC on.


And merchants who are especially technologically challenged (i.e. mom-and-pop gift stores) or have frontline high turnover rate minimum wage earning cashiers who really don't care since they're not making a career out of being a cashier all their life, are not going to spend the nook and cranny of figuring out the detailed concept of what DCC is, how foreign currency conversion works, etc.

Furthermore, merchants only care about getting paid in their local currency. If they punch in HKD 800, DCC rate comes out to USD 110, they still only get HKD 800 from the bank. Merchants profit nothing from DCC because from their agreement with their bank, is to get what was due in local currency.

So who do you guys think is getting that extra HKD 52 from DCC (real conversion rate HKD 800 = USD 103, DCC rate HKD 800 = USD 110, real conversion rate USD 110 = HKD 852, HKD 800 paid out to merchant, who profits the extra HKD 52)? Who do you think really wants DCC? The local bank.

percysmith

I waited 26 minutes for St Regis Shenzhen to void a HKD slip that should be charged in RMB. Then charged it to a RMB card.

But if voiding is not possible then photo the merchant slip (if thermal, ignore if carbon copy), with the local currency box (XCD) selected (if no such box appears then the slip is prima facie non-compliant with Visa International Operating Rules).

Send the merchant slip copy back to your card issuer in the US. Raise a Reason Code 76 Chargeback Request. Do not accept any settlement by your card issuer out of pocket - make sure they make the Carribean bank pay. Took me four months when I did a Reason Code 76 last but I made the Macau bank and merchant who scammed me pay.

kebosabi

Though not really too sure if the merchant scammed you (they only get paid what was due in local currency as per their agreement with their local bank) a detailed step-by-step instruction with a template document (suggest Google Docs) to send to the card issuer would be helpful. You should start a blog about this.

The more it overwhelms the system with paperlog will force DCC to end.

In fact, it should be this way. Rather than get all frustrated, just accept that it happens so keep all your foreign credit card transaction receipts until you get back home. If that's not an option for some reason, take a nice clear photo of them on a digital camera.

Then print out template explaining your situation, mail copies of receipts to issuer, then wait for refunds to appear several months later. That alone would accomplish many things: less stress, it'll eventually be refunded, clogs up the paperwork for the local banks not to keep the DCC setting on "for their best interest."

Jaimito Cartero

I'm under the impression that many merchants are offered lower merchant fees for using DCC. Otherwise why would so many big hotels try this petty scam?