Jan 18, 2014, 10:10 pm
Last edit by: emilio911
What 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:
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):
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:
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:
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:
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 merchant’s 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:
Dynamic Currency Conversion (DCC) [2014-2016]
Feb 11, 2015, 9:21 pm
#1696
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,064
I'd say it's probably not automatic, but that's just a guess. Filing a best rate guarantee claim would be like pulling teeth. They also know few people will bother to go through with it.
Feb 11, 2015, 10:05 pm
#1697
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,803
I'm wondering will they deny a claim saying the rate is best but the 4.x% fee is not included in the guarantee?
Feb 14, 2015, 9:00 pm
#1699
FlyerTalk Evangelist
Join Date: Jan 2014
Location: San Diego, CA
Programs: GE, Marriott Platinum
Posts: 15,508
I'm not sure if this counts as DCC per se but I used a HSBC ATM in Puerto Vallarta that showed a screen letting me choose between "local currency" and I think USD. I forget whether it spit out multiple currencies or if it only contained pesos, which is why I'm not sure.
Feb 15, 2015, 12:06 am
#1700
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,064
On another note, we finally struck DCC twice in the US! While the terminals were not compliant with Visa regulations, DCC was easily avoidable. I'll post details Monday evening after I've had a chance to scan the receipts and the transactions post on my sister-in-law's account.
Feb 15, 2015, 6:40 am
#1701
Join Date: Feb 2013
Location: Irvine CA & PEK
Programs: Hyatt Globalist, Marriott Titanium, Hilton Diamond, IHG Spire Ambassador, Qantas Platinum, United S
Posts: 664
My wife spent hours shopping at Lotte Duty Free, paying USD.
Then she got shopping disorientation and at the Lotte Supermarket downstairs, she chose USD when given the choices without hesitation...
First DCC in 2015!
Then she got shopping disorientation and at the Lotte Supermarket downstairs, she chose USD when given the choices without hesitation...
First DCC in 2015!
Feb 15, 2015, 9:27 am
#1702
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,064
Just to clarify again, Lotte Duty Free's 'native' currency is USD even though it's in Korea?
Feb 15, 2015, 10:36 am
#1703
Join Date: Dec 2007
Location: MSP
Programs: Delta 1 MM, Platinum. Marriott-Hilton Gold
Posts: 312
That is why you should hold your wife's/significant other's hands when in a shopping mall
Feb 15, 2015, 10:43 am
#1704
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,064
Lotte Duty Free's 'native' currency is USD, and items in the store are displayed in USD. Paying in USD means you avoided DCC. In this case, a Korean cardholder using a card denominated in KRW could get hit with DCC even though the purchase is happening on Korean soil! It's one of those counterintuitive cases like the resorts in the Maldives that process in USD natively, but this reminds us that we always have to be vigilant and know what the local or 'native' currencies are for each situation.
Feb 15, 2015, 10:55 am
#1705
FlyerTalk Evangelist
Join Date: Jan 2014
Location: San Diego, CA
Programs: GE, Marriott Platinum
Posts: 15,508
It depends. There are some multi-currency ATMs that use Visa or MC exchange rates. If it is trying to fix a USD/MXP exchange rate, it was DCC. If it dispensed both MXP and USD but applied the exchange rate from the payment networks then it wasn't DCC. I encountered such an ATM in the Turkish part of Nicosia that dispensed Euros, Pound Sterling, and Turkish Lira but used Visa's exchange rate. Another case was a Barclay's ATM in Gibraltar that dispensed both GBP and EUR. I haven't been to Puerto Vallarta, but don't many of the tourist places accept (our perhaps even prefer) USD?.
Also FYI to everyone, the ATMs in Mexico are really big into stuff like being able to donate to charities and "theft protection", which I got bit with at the airport. The HSBC ATMs were of the charity donation type and I was able to easily opt out, but the Scotiabank one at the airport was misleading.
Feb 15, 2015, 12:36 pm
#1706
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,064
I think they do, but at a worse exchange rate (10-12 MXP for every $1) vs the current rate of ~15 to 1.
Also FYI to everyone, the ATMs in Mexico are really big into stuff like being able to donate to charities and "theft protection", which I got bit with at the airport. The HSBC ATMs were of the charity donation type and I was able to easily opt out, but the Scotiabank one at the airport was misleading.
Also FYI to everyone, the ATMs in Mexico are really big into stuff like being able to donate to charities and "theft protection", which I got bit with at the airport. The HSBC ATMs were of the charity donation type and I was able to easily opt out, but the Scotiabank one at the airport was misleading.
Feb 15, 2015, 5:07 pm
#1707
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 19,803
Lotte Duty Free's 'native' currency is USD, and items in the store are displayed in USD. Paying in USD means you avoided DCC. In this case, a Korean cardholder using a card denominated in KRW could get hit with DCC even though the purchase is happening on Korean soil! It's one of those counterintuitive cases like the resorts in the Maldives that process in USD natively, but this reminds us that we always have to be vigilant and know what the local or 'native' currencies are for each situation.
Feb 15, 2015, 5:33 pm
#1708
Join Date: Feb 2013
Location: Irvine CA & PEK
Programs: Hyatt Globalist, Marriott Titanium, Hilton Diamond, IHG Spire Ambassador, Qantas Platinum, United S
Posts: 664
And yes, ironically, Koreans can be DCCed on their home turf on those three floors~ Paying KRW cash there also means accepting DCC or not D, but just CC...
The rest of the Lotte Department Store uses silver signing pads with DCC functionality. The signing screen shows KRW and USD when American cards are swiped.
Be aware! There is no signs on the escalators from 9F to 8F saying "you are leaving USD world, choose KRW"
Feb 16, 2015, 10:40 pm
#1709
Join Date: Sep 2007
Posts: 415
Just came across another instance of DCC in Mexico City. Had to go to the ER tonight, and upon leaving the hospital I was settling up and the cashier asked me if I wanted to be billed in dollars after I handed over my CAD MasterCard. I declined, and asked to be billed in pesos, and she processed the transaction as requested without hassle. I did notice, once again, the POS Terminal culprit is Santander.
Feb 17, 2015, 12:46 am
#1710
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,064
As I had posted earlier in the thread, my sister-in-law has been visiting for a week, and we have had the opportunity to test out DCC at some establishments. Many of us have speculated that DCC is rare in the US and can easily be avoided in cases where it does exist. I have always suspected that the choice, if offered, would appear on the electronic signature pad, and the customer would be in full control of pushing the proper currency selection. We had tried the Cheesecake Factory and West Elm a week ago, and we saw no DCC at either location. My sister-in-law then proceeded to spend down her available USD in cash since she didn't much like the way the AUD:USD exchange rate has gone in the last two years.
We finally struck gold at Forever 21 in San Francisco. The cashier was patient while I was scrambling to get out my phone to take the following photo (and attached receipt):
The screen stayed at the DCC selection until the NO button was pressed. Since the DCC offer was 3% and the card used has a 2.5% currency exchange fee, not much was saved by opting out of DCC. As more issuers convert to foreign transaction fees, this calculus will undoubtedly change.
These transaction posted using the Visa exchange rate of 1.294202 AUD/USD from 2/14:
DCC Offer: A$33.20
DCC Markup: 3.00%
Posted Amount: A$32.23
Currency Exchange Fee: A$0.81
Amount Saved: A$0.16
We then went across the street to Kate Spade, where we also encountered DCC with a similar setup. When my sister-in-law specified to the cashier to pay in USD, we got a blank stare. While I wasn't able to see the cashier's point of view, I don't think the cashier had any way to force the currency selection. Here is what we saw:
I was in a better position to help her decline DCC and get a subsequent photo showing the standard electronic signature pad with amount in USD. Like the receipt from Forever 21, there was no mention of DCC.
DCC Offer: A$210.25
DCC Markup: 3.333%
Posted Amount: A$204.08
Currency Exchange Fee: A$5.10
Amount Saved: A$1.07
Macy's at Union Square in San Francisco didn't present any DCC, and showed the standard screens I've seen everywhere in the US about e-mailing or printing a receipt:
Posted Amount: A$33.47
Currency Exchange Fee: A$0.84
A purchase the next evening at Panera Bread did not yield any DCC:
One potential caveat here is that the above transaction didn't ask for a signature at all, likely owing to the < $25 amount. I should have added a pastry for $0.99 to meet the threshold required for a signature.
Finally, we made a purchase at a Napa winery on Monday without any hint of DCC either. There was no electronic signature pad, but the magstripe reader was integrated with the register. I was watching the touchscreen on the register like a hawk, and I saw no indication of DCC or a currency choice pop up.
In summary, we have only seen DCC in retail establishments, and it's been easy to circumvent in the two cases where it was present. Since the vast majority of big box retailers, department store, supermarkets, etc. have electronic signature pads, I assume that DCC isn't a big problem even when one encounters it in the US. More data points are needed, specifically for sit down restaurants and hotels. I think in the case of restaurants, DCC could be avoided by having the waitstaff void and rerun the transaction. Tipping culture is a good motivator here.
A more problematic case might be at hotels. Most hotels will swipe your card for an authorization hold and then discreetly slip the room bill under the door overnight on the day of departure. In contrast, at most hotels outside of North America there is the physical act of checking out where the reception will run your card for the full amount rather than in the background. This is good when overseas since I've been burned by DCC when using easy checkout procedures. Again, I think the customer service culture would prevail and allow for a DCC-free bill if the case arose. However, even in the case of a chargeback, you would win since Visa regulations require that you opt-in by marking accept on the written agreement.
While I recognize that I only have a sample size of two DCC cases, the markup was only 3% in both cases. Lately I've been seeing markups of at least 4% overseas and in some cases as much as 5%. If you have a card with a 2.5-3% currency exchange fee, a 3% DCC markup will more or less be a wash assuming you don't have rewards bonuses tied to foreign currency spending.
We finally struck gold at Forever 21 in San Francisco. The cashier was patient while I was scrambling to get out my phone to take the following photo (and attached receipt):
The screen stayed at the DCC selection until the NO button was pressed. Since the DCC offer was 3% and the card used has a 2.5% currency exchange fee, not much was saved by opting out of DCC. As more issuers convert to foreign transaction fees, this calculus will undoubtedly change.
These transaction posted using the Visa exchange rate of 1.294202 AUD/USD from 2/14:
DCC Offer: A$33.20
DCC Markup: 3.00%
Posted Amount: A$32.23
Currency Exchange Fee: A$0.81
Amount Saved: A$0.16
We then went across the street to Kate Spade, where we also encountered DCC with a similar setup. When my sister-in-law specified to the cashier to pay in USD, we got a blank stare. While I wasn't able to see the cashier's point of view, I don't think the cashier had any way to force the currency selection. Here is what we saw:
I was in a better position to help her decline DCC and get a subsequent photo showing the standard electronic signature pad with amount in USD. Like the receipt from Forever 21, there was no mention of DCC.
DCC Offer: A$210.25
DCC Markup: 3.333%
Posted Amount: A$204.08
Currency Exchange Fee: A$5.10
Amount Saved: A$1.07
Macy's at Union Square in San Francisco didn't present any DCC, and showed the standard screens I've seen everywhere in the US about e-mailing or printing a receipt:
Posted Amount: A$33.47
Currency Exchange Fee: A$0.84
A purchase the next evening at Panera Bread did not yield any DCC:
One potential caveat here is that the above transaction didn't ask for a signature at all, likely owing to the < $25 amount. I should have added a pastry for $0.99 to meet the threshold required for a signature.
Finally, we made a purchase at a Napa winery on Monday without any hint of DCC either. There was no electronic signature pad, but the magstripe reader was integrated with the register. I was watching the touchscreen on the register like a hawk, and I saw no indication of DCC or a currency choice pop up.
In summary, we have only seen DCC in retail establishments, and it's been easy to circumvent in the two cases where it was present. Since the vast majority of big box retailers, department store, supermarkets, etc. have electronic signature pads, I assume that DCC isn't a big problem even when one encounters it in the US. More data points are needed, specifically for sit down restaurants and hotels. I think in the case of restaurants, DCC could be avoided by having the waitstaff void and rerun the transaction. Tipping culture is a good motivator here.
A more problematic case might be at hotels. Most hotels will swipe your card for an authorization hold and then discreetly slip the room bill under the door overnight on the day of departure. In contrast, at most hotels outside of North America there is the physical act of checking out where the reception will run your card for the full amount rather than in the background. This is good when overseas since I've been burned by DCC when using easy checkout procedures. Again, I think the customer service culture would prevail and allow for a DCC-free bill if the case arose. However, even in the case of a chargeback, you would win since Visa regulations require that you opt-in by marking accept on the written agreement.
While I recognize that I only have a sample size of two DCC cases, the markup was only 3% in both cases. Lately I've been seeing markups of at least 4% overseas and in some cases as much as 5%. If you have a card with a 2.5-3% currency exchange fee, a 3% DCC markup will more or less be a wash assuming you don't have rewards bonuses tied to foreign currency spending.