Using the "Adjustment" menu option to cancel DCC
 

I had a difference experience than what has been discussed in the thread "Using Credit Cards in China - The Great CC Rip Off" and the master thread that it was rolled into. And since both threads are closed, I'm posting it here. The text below originally contain online links for reference, but I cannot link them as I am a first-time poster.

I recently dined at the Shanghai Tang at BFC Shanghai. Their acquirer was Global Payments, who initially DCC'ed me with an outrageous 8.4% conversion fee. The cancel-button trick didn't work -- I pressed it frantically immediately after the waitress keyed in the amount. The FX rate window still showed up; the first carbon slip was still printed with nonsense "I understand I've been offered an exchange rate" verbiage, and the second slip (customer copy) even had a check mark printed on the USD option.

What did work was that after both slips were printed and the main menu showed up on the POS machine, there was a menu item called "调整" (adjustment), listed as item 5. Pressing 5 brought me into a submenu, with option 1 "小费调整" (tip adjustment) and 2 "汇率调整" (FX rate adjustment). I went for option 2, was prompted for the voucher number, which I got from the previous DCC slip, and confirmed the details of the previous slip. Lo and behold, two slips were produced with a printed check mark on CNY instead of USD.

After the initial DCC, the waitress said that she didn't know how to charge me in CNY. So instead of complaining, I just suggested calmly to her and her manager that they might have missed vital steps in the protocol, so that there was a risk of them not receiving money from my bank (well this is true because I could use a chargeback). They were confused, but gave me the POS machine and essentially let me play with it and go through the transaction myself.

The transaction was authorized at the DCC amount of US$64.84, but was posted days later with the non-DCC amount of US$59.81. I was using a Chase Sapphire Reserve.

After consulting the Global Payments DCC training videos, I believe that for their food and beverage clients the authorization is always done in the DCC amount, pending tip and DCC adjustment before posting. Such practice -- although consistent with the usual workflow of taking a customer's card before asking the customer to specify the tip -- means that DCC is by default on; without any adjustments, the amount authorized will be the amount posted. However, as the videos and this Maldives post suggest, pressing "no" before printing the second slip may have also done the trick.

This trick may also work other acquirers and with machines printing carbon slips (i.e. both customer and merchant copy in one go). Indeed I first learned of this method on a Chinese forum post (login required to view full post), where the OP demonstrated how to disable DCC on an Agricultural Bank of China (农业银行) machine with carbon slips. On that ABC machine, the menu sequence is 5 调整 ("adjustment") -> 2 DCC转人民币 ("convert DCC to CNY").

Why don't the banks change the rules so inappropriate DCC results in the entire charge being denied rather than only the extra amount? As it stands it's basically a zero-risk game for the bad guys--the worst that happens is they lose the extra.

Although it is a pain, asking the card company to adjust the amount has always worked for me when the retailer was either unable or unwilling to process the payment in the local currency.

The card companies say they take the matter seriously and "can" take action against non-compliant operators. All I can do is continue to bring each case to their attention.

If you have the time, here is a MasterCard DCC Compliance Guide..http://www.mastercard.com/elearning/...02.17%20EN.pdf

I do have a question for the adjustment though. If the amount adjusted is small, wouldn't the bank just swallow the cost itself, and spare the hassle of an investigation? I thought the proper way to go is a complete chargeback, in which case the merchant does have the right to charge me again in the local currency. It would be a bigger hassle for us and for our bank of course.

I took the view that the charge in dispute was the small percentage added through DCC. If the retailer won't correct it at the time, I inform the card company so they are made aware of who isn't correctly following their procedures. How they resolve it is up to the card company.

I do the same when a restaurant unilaterally decides to add its own tip to a card payment.

In neither case am I disputing the whole transaction, only the overcharge.

While I've generally managed to avoid these disputes by either being careful (outside of China) or paying cash (in China), when I have disputed with CC company they've been oddly ill-equipped to dispute only a portion of the charge on a DCC. One time they eventually credited back the difference; another time (for a small purchase - <$25) they just ate the charge.

Regardless, I think it's useful to call the problem to their attention - even if they decide it's not worth the effort so they write off, I imagine they keep track of write-offs and notice patterns like "a lot of DCC-based writeoffs in China"

I imagine the banks and issuers both get a piece of the DCC charge in addition to the merchant. Even if they don't get a piece, DCC results in higher swipe amount which equals more money for banks/issuers.

On the topic of China and DCC, how is Amex acceptance in the major cities like Beijing/Shanghai?

No idea, never tried it.