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]
Jan 13, 2016 | 6:47 am
#2281
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,113
I'm trying to come up with an appropriate (esp for an ambassador) nickname for that company.
Global Ransom?
Global Extortion?
I had problems with that company outside Taiwan - Hong Kong and the Maldives...
5.45% must be a record. But if the choice is involuntary and they can get away with it why should 4.x% be the limit?
Global Ransom?
Global Extortion?
I had problems with that company outside Taiwan - Hong Kong and the Maldives...
5.45% must be a record. But if the choice is involuntary and they can get away with it why should 4.x% be the limit?
Jan 13, 2016 | 8:46 am
#2282
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,961
Things with DCC have gone from a 'reasonable' - and I use this term loosely - ~ 3% markup (sometimes under 3%) 10 years ago to more than 5% today. In the case of US cards, there were few 0-1% cards back then, so at the time it might have been advantageous to accept DCC if the fee were under 3% and your card had a currency exchange fee. You didn't get rewards on the exchange fees, so if you wanted to use your hotel affinity card it would make sense to bill in USD to maximize the rewards.
However, most issuers stateside switched to foreign transaction fees. The transaction occurs in USD? Doesn't matter. You still get hit with the 3% fee. (Many of us have been stung by this by booking tickets through the website of a foreign airline. Things would price in USD natively, and no currency conversion happened. However, the transaction would post with a 3% FTF.) After the change to FTF, DCC ceased to be a good deal in pretty much every possible circumstance. The only exception is perhaps someone on an expense account reconciling exchange rates. However, most businesses I know go by the interbank rate with perhaps a little leeway in favor of the employee, and you'd have trouble passing off an unnecessary 5%+ extra expense. There have been stories on here of people being on the hook for €50 after willingly accepting DCC.
When does this cross over and become extortion? If you're getting a 5.45% DCC + 3% FTF, you're bound to notice the discrepancy with your billing statement. When do you say enough is enough? If it becomes harder to dodge the scam like in Mainland China or India, it might incentivize people to pay using cash or cash cards. (Many times in Taiwan or HK I use my EasyCard or Octopus, respectively.) Why waste the time arguing a DCC battle for some spending that might total $100 in a week? Even with a 2x category bonus, that's 200 miles or points which amounts to $4 of rewards in the most generous of valuations. In these cases, even if you dispute the difference, the issuer will not begin a chargeback and likely issue a courtesy credit. The result is that the merchant and acquirer are never punished for non-compliant behavior.
Personally, I've already modified my behavior in DCC rampant locations with non-universal compliance like in Hong Kong. I use an Octopus card (funded with cash from a 0% FTF debit card) for all small purchases for which I would use a credit card back home or in a place where DCC is uncommon (Australia or Canada). This is the opposite of what Visa and MasterCard want, but I'm left with little recourse as I want to save my principled fight for those cases that will actually affect positive change by forcing a currency code chargeback: hotels, department stores, and restaurant bills where the discrepancy amounts to something where the issuer will not simply issue a courtesy credit.
Last edited by Majuki; Jan 13, 2016 at 9:52 pm
Jan 13, 2016 | 9:18 am
#2283
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
It would be interesting to know where the threshold lies. My only two disputes were for amounts under 5 USD and on both occasions Chase just issued a credit. Any data points for cases where a card issuer has gone to the trouble to charge back?
Jan 13, 2016 | 9:45 am
#2284
Join Date: Jan 2014
Location: SFO
Programs: TK*G, AT OWE, IHG Diamond
Posts: 2,332
Disputing DCC Transactions
I've just had a couple of infuriating experiences on AirBnB and eBay where I wasn't even asked what currency I would like to pay in and just forced to use their DCC. When I was buying something on eBay, everything showed up in CAD and it wasn't until I looked on my credit card bill that I discovered I was charged in USD at their ripoff rate. Does anyone have any experiences disputing these charges? Would they actually go back and process your charge in the correct currency or would they just pull the money back from the AirBnB host/eBay seller and/or ban me from further activity on their site until I agree to the charge at their ripoff DCC rates?
Jan 13, 2016 | 11:16 am
#2285
FlyerTalk Evangelist
Join Date: Jan 2014
Location: San Diego, CA
Programs: GE, Marriott Platinum
Posts: 15,743
I observe something similar when talking to small restaurant owners in the town where I live. They are often severely challenged by aspects of running a business that they never really anticipated or planned for, including the costs of accepting card payments. They can typically tell you what they paid (or pay on a recurring basis) to get a POS terminal, and what percentage of card sales is creamed off by their processor, but that's all. They are often not aware that they might be able to get a better deal with a different processor (if they're prepared to swallow termination fees and buy/rent a new terminal). They are even less likely to be aware that their 'choice' of processor might make a difference to some of their customers.
Unfortunately those are a lot less commonly offered outside the US, so foreign merchants are generally stuck with whatever their bank offers. Even if that means DCC is enabled by default and not easily bypassed.
Jan 13, 2016 | 12:37 pm
#2286
Join Date: Dec 2007
Location: Cambridge, UK
Posts: 262
I've just had a couple of infuriating experiences on AirBnB and eBay where I wasn't even asked what currency I would like to pay in and just forced to use their DCC. When I was buying something on eBay, everything showed up in CAD and it wasn't until I looked on my credit card bill that I discovered I was charged in USD at their ripoff rate. Does anyone have any experiences disputing these charges? Would they actually go back and process your charge in the correct currency or would they just pull the money back from the AirBnB host/eBay seller and/or ban me from further activity on their site until I agree to the charge at their ripoff DCC rates?
eBay's PayPal integration is very simple to opt out, you just have to notice where the link is.
Jan 13, 2016 | 11:15 pm
#2287
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,961
Jan 13, 2016 | 11:25 pm
#2288
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,113
I would say the amount is somewhere around $4-5, possibly a bit more. Certainly something like a $1000 hotel bill would have an easier time being disputed. Fellow member cxua successfully got a 76 code chargeback against Greyhound Cafe - after an initial suggestion by Chase to do a courtesy credit. As a test, percysmith and I tried to disable DCC but were unsuccessful and needed to void the transactions.
Jan 14, 2016 | 6:20 am
#2289
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
I frequently saw rates between 5.25% and 5.45% on slips where I successfully rejected DCC during my recent trip. Always written in very small text as FIVE PT. FOUR FIVE PERCENT, presumably because figures would too likely to jump out.
I just had a 98,275 KRW charge post to my Visa card as 82.07 USD. The DCC charge that I rejected would have been 87.25 USD. That would have been a stonking 6.31% premium. Hotels (this was a Hyatt) seem to be the greediest of all.
I just had a 98,275 KRW charge post to my Visa card as 82.07 USD. The DCC charge that I rejected would have been 87.25 USD. That would have been a stonking 6.31% premium. Hotels (this was a Hyatt) seem to be the greediest of all.
Jan 14, 2016 | 6:55 am
#2290
Join Date: Nov 2012
Posts: 3,537
I frequently saw rates between 5.25% and 5.45% on slips where I successfully rejected DCC during my recent trip. Always written in very small text as FIVE PT. FOUR FIVE PERCENT, presumably because figures would too likely to jump out.
I just had a 98,275 KRW charge post to my Visa card as 82.07 USD. The DCC charge that I rejected would have been 87.25 USD. That would have been a stonking 6.31% premium. Hotels (this was a Hyatt) seem to be the greediest of all.
I just had a 98,275 KRW charge post to my Visa card as 82.07 USD. The DCC charge that I rejected would have been 87.25 USD. That would have been a stonking 6.31% premium. Hotels (this was a Hyatt) seem to be the greediest of all.
Jan 14, 2016 | 8:48 am
#2291
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,961
In the case of 10% DCC do you think people will still accept that, especially on larger purchases like hotel bills or nice restaurants? If the transaction posts for $100 more than your estimate for the exchange rate, that's well outside the margin of error. Even if unaware of DCC, do people really not check the exchange rate?
Jan 14, 2016 | 9:14 am
#2292
Join Date: Nov 2014
Location: NYC
Posts: 558
In the case of 10% DCC do you think people will still accept that, especially on larger purchases like hotel bills or nice restaurants? If the transaction posts for $100 more than your estimate for the exchange rate, that's well outside the margin of error. Even if unaware of DCC, do people really not check the exchange rate?
I also think that people are naive enough to believe that there is some regulation here and that the DCC rate has to be close to what they'd be charged without DCC, which we all know is not true.
Jan 15, 2016 | 4:00 am
#2293
Join Date: Apr 2014
Location: USA
Posts: 240
I contacted AirBnB after being forced to have DCC (there was no option to opt out). They sent me a 10 voucher but refused the refund the difference. Haven't booked with them since, so the voucher was useful. What they did tell me was to select the country of the currency I wish to pay in as my country of residence.
eBay's PayPal integration is very simple to opt out, you just have to notice where the link is.
eBay's PayPal integration is very simple to opt out, you just have to notice where the link is.
Jan 15, 2016 | 8:57 am
#2294
Join Date: Aug 2008
Programs: HHonors Gold, Marriott Lifetime Gold, IHG Gold, OZ*G, AA Gold, AS MVP
Posts: 1,944
I tried having the cashier press "cancel" at various points in the transaction, including when the terminal prompts for the PIN and the converted amount is shown on the terminal. It either backed out of the transaction with a "please remove IC card" or, when pressing "cancel" on the converted amount, just flashed the word "CANCEL" and then backed out of the transaction completely. Looks like BEA is the new HSBC.
Jan 16, 2016 | 11:36 pm
#2295
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,113
(HT Majuki) lucky got DCCed by Hilton Queenstown
http://onemileatatime.boardingarea.c...nversion-scam/
And they wrote him back a boneheaded response http://onemileatatime.boardingarea.c...cy-conversion/
This is definitely a Visa Reason Code 76/MC chargeback Reason Code 4846 case. We can't tell which card lucky used
The only thing to add is the appropriate rate to use is the Visa exchange rate calculator http://usa.visa.com/personal/card-be...calculator.jsp or Mastercard currency conversion tool https://www.mastercard.com/global/currencyconversion . Xe.com gives the bank some scope to drag their feet.
http://onemileatatime.boardingarea.c...nversion-scam/
And they wrote him back a boneheaded response http://onemileatatime.boardingarea.c...cy-conversion/
This is definitely a Visa Reason Code 76/MC chargeback Reason Code 4846 case. We can't tell which card lucky used
The only thing to add is the appropriate rate to use is the Visa exchange rate calculator http://usa.visa.com/personal/card-be...calculator.jsp or Mastercard currency conversion tool https://www.mastercard.com/global/currencyconversion . Xe.com gives the bank some scope to drag their feet.