I spoke with my friend in international banking and learned a lot about the back end of the card business. Unfortunately, not a lot that's going to help a traveler though. He confirmed as suspected by posters here as well as the info provided by mnredfox that the cards generally start with a fair exchange rate and it's a matter of how they deal with fees. The transactions accumulate fees which wind up being charged to the card issuing bank and that bank decides how much (from 0 up to adding their own additional fees) to pass along to the cardholder. The specific fees charged to cardholders I think are well covered elsewhere.

I asked him about DCC and he explained that it was designed to help online merchants who deal with multiple currencies. He was surprised to hear that DCC was being used at bricks and mortar locations and that significantly unfavorable rates were being used. He said he'll talk to someone he knows who's in that area and I'll let you know if I hear back. He didn't have any advice for what to do on the ground.

My personal approach would be to follow the path outlined by other posters, get the manager to call the bank and redo the charge as a non-DCC transaction. What I would add to that procedure is asking the manager to write down an explanation of what the POS operator needs to do to have the charge come out non-DCC (or have them show you) so you can explain it or give a written description to the employees at that location on future visits.

Yes, my idea is cumbersome and different locations are going to have different setups though there may be some overlap between some locations. It might be worth it for locations that you visit repeatedly.

Is there any consensus about whether the DCC transactions tend to happen at specific types of locations like food & beverage? retail? hotels? or is it across the board?