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 merchants 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]
Jun 18, 2015 | 10:13 pm
#1921
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,961
Jun 19, 2015 | 8:21 am
#1922
Join Date: Jul 2007
Location: Berlin
Programs: LH SEN, BA Gold, SK Gold; Accor Diamond; IHG Diamond-Amb; Meli/HH/Bonvoy Gold
Posts: 5,682
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.
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.
Jun 20, 2015 | 9:20 am
#1923
Join Date: Dec 2011
Location: NJ
Programs: UA Gold, Hilton Gold, Marriott Plat,
Posts: 284
Jun 20, 2015 | 1:07 pm
#1924
FlyerTalk Evangelist
Join Date: Jul 2003
Location: Florida
Posts: 30,343
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?
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?
Jun 21, 2015 | 8:21 am
#1925
Join Date: Oct 2007
Programs: AA, WN, UA, Bonvoy, Hertz
Posts: 2,716
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
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
Jun 21, 2015 | 8:32 am
#1926
Join Date: Jun 2014
Posts: 46
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
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
Jun 21, 2015 | 11:20 am
#1927
Join Date: Nov 2014
Location: NYC
Posts: 558
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.
Jun 21, 2015 | 12:37 pm
#1928
FlyerTalk Evangelist
Join Date: Jul 2003
Location: Florida
Posts: 30,343
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.
Jun 21, 2015 | 2:03 pm
#1929
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,961
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.
Jun 21, 2015 | 10:42 pm
#1930
FlyerTalk Evangelist
Join Date: Jul 2003
Location: Florida
Posts: 30,343
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.
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.
Jun 22, 2015 | 11:39 am
#1931
Join Date: Nov 2012
Posts: 3,537
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).
Jun 22, 2015 | 12:12 pm
#1932
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,961
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).
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.
Jun 22, 2015 | 1:58 pm
#1933
Join Date: Nov 2012
Posts: 3,537
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.
Jun 22, 2015 | 5:56 pm
#1934
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,113
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.
Jun 22, 2015 | 6:13 pm
#1935
Join Date: Nov 2012
Posts: 3,537
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.