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]
Dec 22, 2015 | 6:31 pm
#2251
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,160
Jeffjaguar a signature pad may be used in Europe
Dec 22, 2015 | 7:13 pm
#2252
Join Date: Apr 2014
Location: USA
Posts: 240
What I don't understand is if you gave the cashier 50 and only got 8 change you would demand the 2 you had been shortchanged. I see DCC as the same principled crusade against being ripped off. Since you used a MasterCard, you have more protection considering the MC DCC rules state you only have to say you were not offered the option of paying in local currency. What's unclear is whether or not Citi will issue a courtesy credit or go for the chargeback. While we don't lose out either way, my hope is that this becomes enough of a nuisance that issuers start to push for chargebacks to force merchant compliance.
Also... Meijer? Another FTer from the Midwest?
Also... Meijer? Another FTer from the Midwest?
Dec 22, 2015 | 7:14 pm
#2253
Join Date: Apr 2014
Location: USA
Posts: 240
Where there might be a problem here, did the poster sign the receipt and make a notation that local currency option was not offered. If this wasn't done, the claim could be the statement that the exchange rate was final and not subject to change. It is important if one is put in that position because of the refusal of merchants to properly follow the rules, they make a notation on the slip they sign that local currency option was not offered. How this will work with pin preferred cards is another story.
Jan 2, 2016 | 5:53 am
#2254
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,983
My 2016 travel starts with a brief Hong Kong adventure. Fellow thread contributor percysmith and I ate at Xiao Wang Beef Noodle at Maritime Square for lunch on January 2nd. We saw a Citibank terminal and thought we had a prime candidate for DCC. The cashier said the terminal didn't support DCC, however, and there was no verbiage on my signed receipt or customer copy. Ironically, the cashier purposefully inserted my chipped card upside down so that the read would fail and go to a fallback transaction. He said that the chip reader was broken and they were looking to replace the terminal.
I'm staying at the SkyCity Marriott near the airport. While the stay is on points, the HK$500 preauth is listed as $67.97. Using the current Visa exchange rate, the amount should be $64.52, meaning the DCC markup is 5.35%.
This certainly makes it among one of the highest markups I've ever seen. Fortunately, this hotel seems to respect DCC preferences. I requested HKD this time last year, and the hotel honored that request. I was even able to get a courtesy copy of the receipt to show HKD had been charged.
After lunch, percysmith and I were talking about ways to avoid being hit with DCC upon checkout from hotels. One way is to give a non-DCC card for the preauthorization at check-in. That's what I do with the Novotel in Taoyuan, Taiwan. I then inform the receptionist at checkout that I would like to use a different card. Furthermore, do not allow the hotel to tell you that they will use the card on file. Insist that you receive a signed credit card receipt plus a courtesy copy (if applicable).
I'm staying at the SkyCity Marriott near the airport. While the stay is on points, the HK$500 preauth is listed as $67.97. Using the current Visa exchange rate, the amount should be $64.52, meaning the DCC markup is 5.35%.
This certainly makes it among one of the highest markups I've ever seen. Fortunately, this hotel seems to respect DCC preferences. I requested HKD this time last year, and the hotel honored that request. I was even able to get a courtesy copy of the receipt to show HKD had been charged.After lunch, percysmith and I were talking about ways to avoid being hit with DCC upon checkout from hotels. One way is to give a non-DCC card for the preauthorization at check-in. That's what I do with the Novotel in Taoyuan, Taiwan. I then inform the receptionist at checkout that I would like to use a different card. Furthermore, do not allow the hotel to tell you that they will use the card on file. Insist that you receive a signed credit card receipt plus a courtesy copy (if applicable).
Jan 4, 2016 | 1:56 am
#2255
Join Date: Apr 2014
Location: USA
Posts: 240
I was on a shuttle back to my hotel in Ireland and I overheard an Irish couple talking about DCC and how good it was because they could save on foreign transaction fees by paying in Euros while abroad.
Sigh, I didn't want to butt in and explain how it really works. But apparently one merchant convinced them that this was the way forward.
Sigh, I didn't want to butt in and explain how it really works. But apparently one merchant convinced them that this was the way forward.
Jan 4, 2016 | 2:16 am
#2256
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
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I don't know anything about Irish cards, but outside of North America the cards tend to have currency exchange fees. These fees wouldn't be charged if you opt in to DCC. North American issuers have foreign transaction fees, which means that the fee happens regardless of the settlement currency. If the currency exchange fee is 3% and the DCC amount is 3%, it might make sense in that corner case to accept DCC. At least in the US, FTFs weren't included in the rewards calculation, but presumably the total with DCC would be. However, in practice this rarely works out since the typical DCC markup is > 3%.
Jan 4, 2016 | 2:45 am
#2257
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,160
The cynical part of me wonders if we should share our knowledge and let the rest of the world rot.
It's a bit like me justifying price discrimination for a capacity restricted route http://www.flyertalk.com/forum/briti...l#post25916250 - of course I'm assuming I'm the one who can access the ex-EU fares.
At least in HK, the argument the merchant's argument won't wash as the HKMA (CFPB and Fed integrated) spent a lot of effort making merchants identify the fees levied with charging HKD overseas.
Perhaps educating the masses is the government's job, not us. We just educate each other in the know.
It's a bit like me justifying price discrimination for a capacity restricted route http://www.flyertalk.com/forum/briti...l#post25916250 - of course I'm assuming I'm the one who can access the ex-EU fares.
At least in HK, the argument the merchant's argument won't wash as the HKMA (CFPB and Fed integrated) spent a lot of effort making merchants identify the fees levied with charging HKD overseas.
Perhaps educating the masses is the government's job, not us. We just educate each other in the know.
Jan 4, 2016 | 9:48 am
#2258
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,983
There are some who refused to be educated or say, "I don't really care," but I would say the majority appreciate the education. When you explain it in terms of the merchant stands to make a profit off of your ignorance and it can cost you up to 8% more than you bargained for, people start to pay attention. (I then educate if people have cards with a FTF.) My explanation is that if you received a bill for $100 but then the waiter ran your card and it was charged $105, you would raise a fuss. Unfortunately, DCC is sneaky enough where people don't know they're being ripped off even though the markup is listed on the receipt. The two currencies and uncertainty about the exchange rate between them provides enough cover to continue the con.
I say this from the perspective of an active member of FlyerTalk who used to get hit with DCC without realizing it until 2013. Amazingly, I never got hit in Taiwan during my first couple of trips there. I think this was largely due to them generating the quote slip and proactively offering the choice of currency. Since I knew my card had a 0% FTF, I figured it was better than whatever rate they would give. I didn't know this was called DCC at the time nor how pervasive the problem was. I'm certain others could be similarly educated and brought on the bandwagon.
Jan 4, 2016 | 10:26 am
#2259
Ambassador, Hong Kong and Macau
Join Date: May 2009
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Posts: 22,160
I forgot to add it seems DCC is Visa's illicit incentive to sign up more merchants and increase acceptance. Could be good for us if someone else is paying for it.
Jan 7, 2016 | 12:42 am
#2260
Join Date: Oct 2015
Posts: 12
Pizza Express (Life Plaza Shanghai) 2 visits over 3 weeks.
HSBC machine
1st visit - was given RMB/USD slip, so I asked to be charged in RMB only. Staff re-swiped and printed a separate RMB slip to show me and assure me - but I still was asked to sign the original DCC slip. Odd but checked my Chase account and sure enough, temp charge of DCC amount posted in the correct RMB converted amount.
2nd visit - handed card while asking for RMB charge, saw the same RMB/USD slip and signed and circled RMB thinking it would be the same as before. WRONG. DCC amount posted.
I disputed with Chase and again explained my case and how I wanted them to resolve it (help me go after the vendor) as this horribly inconsistent system really makes me want to toss the card in the drawer and use my Amex in the future. This time instead of an immediate adjustment, they took a few days to look into it. At the end they still did the adjustment, but this time even gave me a call (which i happened to miss since i'm abroad). I kind of wish I had gotten the call so I could ask the details of how they resolved it, if they pursued the vendor.
Next time, I guess.
HSBC machine
1st visit - was given RMB/USD slip, so I asked to be charged in RMB only. Staff re-swiped and printed a separate RMB slip to show me and assure me - but I still was asked to sign the original DCC slip. Odd but checked my Chase account and sure enough, temp charge of DCC amount posted in the correct RMB converted amount.
2nd visit - handed card while asking for RMB charge, saw the same RMB/USD slip and signed and circled RMB thinking it would be the same as before. WRONG. DCC amount posted.
I disputed with Chase and again explained my case and how I wanted them to resolve it (help me go after the vendor) as this horribly inconsistent system really makes me want to toss the card in the drawer and use my Amex in the future. This time instead of an immediate adjustment, they took a few days to look into it. At the end they still did the adjustment, but this time even gave me a call (which i happened to miss since i'm abroad). I kind of wish I had gotten the call so I could ask the details of how they resolved it, if they pursued the vendor.
Next time, I guess.
Jan 7, 2016 | 2:21 am
#2261
Join Date: Nov 2012
Posts: 3,537
American Express doesn't allow it because it'd be hard to argue they're a monopoly and generally they protect their consumers. But at the same time most of their cards charge their own FTF which isn't much better.
Discover is confusing. No FTF. Generally very consumer-friendly. Many reports of places that DCC everything but Discover. But at the same time Discover does not ban DCC and does NOT require the cardholder be offered a choice of currencies. PayPal force-DCCs Discover, as I learned the hard way.
Jan 7, 2016 | 2:38 am
#2262
Ambassador, Hong Kong and Macau
Join Date: May 2009
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Visa does not want to allow this. They've made that clear. They were sued by a "consumer" protection organisation for violating consumers supposed right to competition and choice in exchange rates, in Australia. They allow DCC everywhere because they'll get sued by one of these groups (which actually exist to protect small business interests, not consumers) if they don't.
ACCC's actions are misguided - they seem to think setting up the credit card equivalent of the 2000-2001 California electricity crisis is preferable to rate regulation.
And the BoCs and Global Payments are playing the part of Enrons. Wonder if they call their terminals Death Stars and the whack-a-mole firmware Perpetual Loops.
It's not competition when you set up only one alternate forex supplier to Visa/MC for the exchange rate, and that supplier has a conflict of interest because it is either the acquirer or the acquirer's sole partner!
The ACCC's counterpart in Hong Kong (if we can call it that) ended up recommending officially that "consumers are otherwise advised to spend in the trader’s local currency which usually results in less transaction fees" https://www.consumer.org.hk/ws_en/ne...tion-fees.html
If Visa/MC (I tend to think MC is better than Visa on this given they offer "no questions asked" chargeback of DCC and also better response to my correspondence with them) then probably they should allow an interface to let any foreign exchange business participate and display the best [six] rates on the terminal display for cardholder selection.
The way Visa/MC set up the alternate choice now is seriously acquirer-friendly while providing them with antitrust cover. If this setup isn't designed to increase acceptance I'll eat
Last edited by percysmith; Jan 7, 2016 at 2:43 am
Jan 7, 2016 | 1:52 pm
#2263
Join Date: Mar 2007
Location: Seat 21C on UA
Posts: 988
Does JCB attempt to DCC? I have a US JCB Marukai card now and was wondering about if they do that overseas...
Jan 7, 2016 | 2:37 pm
#2264
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
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To my knowledge, Discover or its partner networks don't support it, so you won't encounter this at the retail point of sale. PayPal is a special case where they're forcing you to use their bad exchange rate. Absent guidance or rules from the payment networks regarding settlement currency, PayPal can get away with this behavior.
Jan 7, 2016 | 9:49 pm
#2265
Join Date: Aug 2008
Programs: HHonors Gold, Marriott Lifetime Gold, IHG Gold, OZ*G, AA Gold, AS MVP
Posts: 1,947
All right, Bank of East Asia is now in the forced-DCC game in China.
Ate at EQ (some kind of Danish cafe chain?) in Shanghai, used my AA card to pay. Insert card, terminal goes online, I know I'm in for a tough time when the slip prints out unusually long. Surprise, surprise, 3.5% DCC markup. I have her void and do it again, she selects "东亚银行DCC" before inserting the card, watch the terminal, no "INQUIRY" screen, it proceeds pretty much the way I expect a non-DCC transaction to go except it says "联机成功" instead of "交易成功" before printing the slip. Have her try again but select "中国银联3.0" instead of BEA, it errors out. The only clue you'll get that you're being DCCed before the slip comes out will only happen on a PIN-preferring card: when I used my TD card, it displayed the C$ amount on the merchant side when it prompted me to enter the PIN. At this point I just went ahead and took the loss because there was a line forming behind me and only one person at the till.
I was hoping they'd stay above this (back when they were the acquirer for Carl's Jr. they would prompt you to choose your preferred currency on the PIN pad), but obviously they saw there was money to be made in forcing DCC instead of letting the customer choose.
Ate at EQ (some kind of Danish cafe chain?) in Shanghai, used my AA card to pay. Insert card, terminal goes online, I know I'm in for a tough time when the slip prints out unusually long. Surprise, surprise, 3.5% DCC markup. I have her void and do it again, she selects "东亚银行DCC" before inserting the card, watch the terminal, no "INQUIRY" screen, it proceeds pretty much the way I expect a non-DCC transaction to go except it says "联机成功" instead of "交易成功" before printing the slip. Have her try again but select "中国银联3.0" instead of BEA, it errors out. The only clue you'll get that you're being DCCed before the slip comes out will only happen on a PIN-preferring card: when I used my TD card, it displayed the C$ amount on the merchant side when it prompted me to enter the PIN. At this point I just went ahead and took the loss because there was a line forming behind me and only one person at the till.
I was hoping they'd stay above this (back when they were the acquirer for Carl's Jr. they would prompt you to choose your preferred currency on the PIN pad), but obviously they saw there was money to be made in forcing DCC instead of letting the customer choose.