I had never seen this DCC before until visiting Hong Kong. I have traveled to Canada and they do not do anything of this nature there (at least that I noticed).

In Hong Kong upon my first hotel check out, the bill was presented to me and I was asked if I wanted to be charged in USD or HKD. This was odd to me. I already had "an idea" what the USD charge would convert to, and the amount printed on the slip for USD seemed high, so I circled the HKD option. A few days later I checked my statement and the charge posted through at a cost 5% less than the "USD Option" on that sales draft would have been. I was in and out of a few more hotels in Asia and found this DCC every time (Hilton, IHG, and Marriott). However, at each hotel, it was asked by the clerks very carefully if I wanted the charge to be in USD or HKD, and they confirmed it after I handed over the slip. Everything was processed properly. I believe the hotel clerks knew full well this DCC is a scam. I also found this option in a museum and also at a couple of restaurants (but not all restaurants).

I find this DCC practice sleazy and believe the credit card companies should prohibit it. I am trying to figure out where the money goes. Based on what I read, it appears the card processing bank is the one who is getting this money. I wonder if it is split between them and the merchant. From what I saw, the merchant is not keeping that full 5% though... if any of it.