Time to do a chargeback. Visa or MasterCard?

A German bank I use, DKB, is warning customers (here) about the perils of DCC if they use their cards "outside the Euro zone".

It's not entirely accurate, as it blames cash machine operators and merchants without mentioning the role of banks and other payment processors, but it is still a welcome attempt to inform.

Visa with Chase - If I don't hear back from AA regarding my complaint by Monday (a week later, more than generous) I will.

DCC or no DCC on an Avis rental
 

We have an interesting billing situation on an Avis rental in Europe.

As some of you may very well aware of, Avis USA site always default the car rental reservation to USD on the final page no matter which currency you chose during the quote process.

We always asked to be billed in local currency at the time of picking up the car and again at the time at returning the car. We also made sure the clause of "billing will be done in the currency of the country where the card is issued" or something like that, is deleted on the contract.

In May we had car rental in Germany, picked up at Dusseldorf city location and returned at Frankfurt main train station. The quote page showed 163xx euro, the final page defaulted to $175xx. At pick up the contract showed 159xx Euro, lower than the 163xx at reservation time. No USD shown anywhere. Between reservation and pick up, Euro dropped a few %. There is no billing clause on the contract which was guaranteed with AMEX Plat.

At car return, we switched the card to Citi Premier thanks to the enhanced 3x pt earning with car returned in conditions as at pick up. I specifically asked the agent to make sure no DCC. He could not guarantee but said the contract would show which currency in billing. Switched card to swipe, the contract showed the same 159xx Euro. Agent said looked like no DCC. He even added that "I am sure you are familiar with this - if it is billed in USD, there would be a sentence on the contract. There is none, so it should be billed in Euro."

Imagine my surprise, the charge showed up at Citi as $175xx USD, exactly the same as the reservation. HOWEVER, Euro has gone back up during the short period from car pick up to car return and eventually billed.

If it was billed at 159xx Euro, our bill would be $177xx per the MC historical rate at 1.11890, or if it was billed at 163xx on the quote page when reservation was made, it would be $182xx. Yet it is billed in the identical $175xx at the time of making reservation.

Not only there is no DCC, but we actually got a tiny break on the exchange.

So exactly how this thing works with Avis rental system?

I know in the past we were DCCed by Avis in Switzerland and again in UK. Did they change their policy on how to bill? i.e. once the reservation was made, that default to the own country's currency, it is FIXED at that amount - hence I saw the fluctuation of Euro between reservation and pick up, yet the final billing matched exactly the USD quoted at reservation?

On my recent trip, a number of DCC offering merchants were now touting a no commission DCC. I still did cancel or whatever option to pay in local currancy, but this is a new twist for me. I suspect the convenience charge of the DCC is still embedded in the rate used.

I wish I could say I had time to compare the offered rate at the moment, but I didn't. Also, the EUR was moving a percent a day, so I still couldn't say what it would post at when it takes a few days to process.

Also, it is important to have local currency receipts if you are doing the tax free refunds. As that will be how the third party will credit back your card (which is better than taking cash at the airport). If they have to convert your card refund back to another currency, they will charge a conversion fee on top of their service fee out of your VAT refund.

Finally, most chip situations involve you managing the POS terminal directly which is a very good thing. Even if you are signing, the store clerk doesn't really know that until it doesn't ask for a pin and spits out paper to sign. So, you get to accept the purchase and see the DCC selection screen in most cases.

Rasheed

Two questions: where did you go and what cards did you use?

There's lots of examples of merchants showing "no commission" DCC offers that then go on to say "but a markup of 4% is included in the rate". I'd guess it's a similar situation.

Do people really be naive enough to fall for the commission free conversion? This is just like the game played by some currency exchangers advertised no commission / no fee but horrible exchange rate to make up for that and then some.

It's possible. I still don't have an answer for you on your Avis experience. Do you use AmEx Plat to prevent DCC at the onset and then switch the card upon returning to reduce the chances of DCC occurring? I do this with some hotels in Asia as well. I then get the preauthorization in local currency just in case they try to pull an express checkout on me.

Actually the primary reason to switch was because effective Apr 19th Citi Premier changed the earning schedule to 3x TYP on travel while the AMEX Plat earns only 1x.

When the reservation was made, the AMEX Plat was stored in Avis Preferred, so it was the default billing card. I later changed the stored card but then found out it would only be effective with NEW reservations, would not replace the previous stored card that attached to the old reservation! I could not change the reservation due to the rate had gone up 15%.

Both the AMEX Plat and later the Citi Premier were authorized, for the IDENTICAL USD at $285xx. AMEX Plat was authorized at Pick Up. Citi Premier was authorized at return when I asked to change card. Why it was not exactly $100 over the contract price of $175xx, but $110xx is beyond me. (Avis always added some extra to the rental cost for authorization though I never figure out how they calculate it - it also seems each country has a different calculation.)

Obviously Citi card was not DCCed because the authorization in USD was identical to that made on the AMEX Plat, and the 2 were done 5 days apart.

Actual billing was to the Citi's card while the authorization on the AMEX Plat fell off after 2 weeks.

I am just real puzzled on how Avis handles its billing these days - it seems being determined by the exchange rate at reservation and then the home currency became the contract price, and the local currency varies based on the exchange rate against the FIXED home currency amount. This is the first time I have seen such. Earlier this year in South Africa and in Turkey, it was not like that - both were just straight local currency at billing, regardless what the USD shown on the reservations.

Name and shame time today - Caffe Nero in London not only attempted to DCC me, it was Irish-style DCC (e.g. the prompting was confusing and did not make it clear there was a choice of currency, instead it was worded as OK/Cancel with the implied assumption that you either accepted the amount or cancelled the transaction).

:mad::mad::mad: It's deceptive, but at least you were in control of the terminal. This almost caught me the first time. To the uninitiated, it seems like you're canceling the entire transaction. I guess in the worst case you could ask the cashier to void/refuse to sign/deface the receipt.

For whatever good it does, I wrote Caffe Nero an email telling them I am boycotting them entirely over it. And yes, it's the Irish-style DCC that makes it look like you're cancelling the entire transaction - that does NOT need to spread in the UK, a fairly safe country. It also doesn't actually comply with network requirements that DCC be an active choice. There's nothing active about thinking you HAVE to hit OK, as would be intuitive.

OK/Cancel seems to be the status quo in Sydney/Brisbane - at least as far as merchants acquired by ANZ (an Australian Big Four bank) are concerned.

It's deceptive and unethical, and takes advantage of those least able to understand what's happening. I guess what really makes me angry is how Caffe Nero claims to be an ethical business (they're not, for other reasons also, but still, that's one of their big claims). They have a huge section on their website on their "ethics" - so this type of defrauding behaviour is far worse than from other companies, since it goes so against what they (falsely) claim to the public they are.