Jan 18, 2014, 10:10 pm
Last edit by: emilio911
What is it?
Dynamic Currency Conversion (DCC) is a "service" some merchants and ATM operators offer that will charge a cardholder in the native currency of the card rather than the local currency. A more complete definition and examples are available via this Wikipedia article on DCC. While sold as a convenience to cardholders traveling outside of their home country, it is a pure profit play by the merchants. You may end up paying a fee of up to 8% over the purchase price for accepting DCC. Always decline DCC and asked to be billed in the local currency!
Where will I see it?
You can be hit with DCC anywhere there is a difference between your debit or credit card's denominated currency and the currency of the location where you're trying to use the card. The most common example will be at a merchant overseas, but now some ATMs are offering the service too. While many US cardholders complain about getting tricked into accepting DCC overseas, some merchants in the US have started to use DCC as well.
What is the issue?
Unless you're the merchant or ATM operator, there isn't much benefit to using DCC. Some customers say they prefer knowing exactly how much they'll be charged in their home currency or may not know the exchange rate of the place where they are visiting. For example, if you are in Prague for two days and you don't know how much the Czech Koruna is worth relative to the US Dollar, you might feel more comfortable knowing that you're buying an item for $205.00 versus 4000 CZK. However, the real exchange rate as of January 18, 2014 would place 4000 CZK at $197.18. You just paid an extra $7.82 for the "convenience" of knowing how much you'd be charged!
DCC often charges about a 4% premium over the true exchange rate. The problems don't stop there since many US banks still charge a 3% foreign transaction fee (FTF) for purchases made outside of the US. Not only would you get hit with the $205.00 charge, you could also find yourself facing a total charge of $211.15 if your card has a 3% FTF.
This is a pure money grab from the merchants, and it's billed as an easy way to squeeze additional revenue out of the transaction. Numerous [1, 2] articles have talked about DCC duping many consumers. Discover even has a warning about being tricked into DCC when using a card abroad.
For example, this FlyerTalk member reported that Avis charged his Saudi credit card in Saudi riyals instead of USD for a car rental in Florida without his consent. This has also been a trend for hotels, particularly large chains as indicated here and here.
DCC is simply not worth it for the consumer. Unless you like paying a convenience fee of up to 5% of the total transaction just to know how much you will be billed, you should always decline DCC and ask to be billed in local currency when handing over your card.
Furthermore, it is in your interest to obtain a card that has a 0% FTF. FlyerTalk member kebosabi maintains a fairly comprehensive spreadsheet of EMV-enabled cards ideal for overseas travel, many of which offer a low or 0% FTF as a feature. There is also a wiki at FlyerGuide of various FTF of debit and credit cards.
What can I do to avoid DCC?
American Express currently does not support DCC on its network, so you are safe from DCC if using an American Express card. However, Visa and MasterCard card networks can support DCC, so be vigilant when purchasing abroad with a Visa or MasterCard branded card. There have been reports of being charged DCC with a Discover card in China [citation needed], but primarily the issue is happening with Visa and MasterCard cards.
Before handing your card to the merchant, always specify clearly that you want to be charged in the local currency and that you do not want DCC. For some transactions, you retain control of your card as you dip it into a chip reader and can view on a screen to select which currency you want to use for the transaction. Always select the local currencyto get the best exchange rate. Do not select the card's native currency!
Similarly, for ATM withdrawals, make sure you decline any kind of conversions. Some good examples of what to look for when using an ATM overseas are here and here. You're probably coming off of a long flight and fatigued, but educating yourself beforehand can save you from getting ripped off. The user interfaces on almost all of these ATMs are set up to encourage you to take the bait, and you have to be extremely vigilant not to fall for it.
If you are doing a PIN-based transaction, you should have the opportunity to review the total amount and denomination of the transaction before entering your PIN. If you are doing a signature transaction and the merchant has processed your transaction with DCC, cross out the amount and write "DCC refused" on the receipt. Do not sign the receipt, and demand that the merchant reverse the transaction and run it in the local currency. If no verification is required due to a small purchase amount, ask the merchant to reverse the charge and repeat the transaction using local currency. If all else fails, file a dispute with your card issuer when you return home. Even if it's immaterial, the banks will get the message like they did with EMV.
Some merchants will claim that their systems have to bill you in your native currency. This is a complete lie. But just like a mag stripe only card, this is battle where you have to be prepared. Don't settle for merchants claiming that "it has to be done this way" or "pay cash if you don't want this". Be prepared to walk away, and, if you must complete the transaction, write "DCC refused & merchant didn't give a choice" on the receipt and cross out the amount. Let the merchant know that you will be filing a dispute with your bank.
Disabling DCC
Disabling DCC on ANZ terminals in Australia
ANZ markets DCC as Customer Preferred Currency (CPC). Terminal operators can contact ANZ Merchant Services at 1800 039 025 to have this feature disabled. Currently, your Visa or MasterCard will be subjected to DCC if denominated in: CAD, CHF, DKK, EUR, GBP, HKD, JPY, MYR, NOK, NZD, SEK, SGD, THB, USD, or ZAR. All DCC transactions on ANZ will cause a 2.5% markup. Steps to avoid DCC:
If you see a signature slip with DCC verbiage and a checkbox indicating a currency selection, kindly ask the merchant to void the transaction. If it's a PIN-based transaction, you have an additional opportunity to cancel the transaction because it will ask for your PIN a second time. For instance, if you see "EUR 17.29 KEY PIN" refuse to enter your PIN and start again.
Disabling DCC in China
There are many reports of forced DCC in China, and there is a great thread [closed to new posts] on DCC in China on the the China Destinations forum.
Disabling DCC on Bankcomm terminals in Beijing http://www.hongkongcard.com/forum/fo...p?id=12272&p=2 #19
jair101's DCC instructions of March 2011 http://www.etveg.com/misc/DCC_China.pdf
Disabling DCC in Eurozone and UK
DCC offered in tourist traps (Harrods Knightsbridge/Galleries Lafayette Montparnesse/El Cortes Ingles Grand Via Madrid)
Unlike the rest of the world, Visa Europe does not require merchants to collect a ticked box on the slip (presumably because merchants there don't keep signed slips under Chip-and-PIN)
El Cortes Ingles collects a signature electronically and the DCC selection is made on the signature pad - the choice is respected.
Harrods and GL rely on cashier input in the POS for the currency choice - the cashier may forget to ask. The POS do not offer voiding (only refunds), but since you're given a slip to sign the best thing to do is to deface it before signing and submit chargeback request to issuer bank on return home.
There may be smaller merchants who also collect DCC but I seemed to have pre-empted most of them by saying "charge Euros (Pounds) please"
In Spain all merchants by law are required to provide you with a complaint form called an hoja de reclamaciones if requested. The form has two carbon copies. The customer retains one copy as a record of the complaint. The merchant maintains another copy, and the third is sent to the local consumer protection bureau. Merchants are also required to post a sign conspicuously informing the customer of the right to complain (usually in Spanish and English). Do not accept the lie that they don't have any forms. This is illegal, and you are able to call the police if the merchant refuses to provide you with this official form. It's interesting to see merchants start to squirm when you know the rules, and most merchants will start to be accommodating after you mention it. (Please still fill out the form even if the merchant cooperates after mentioning it because these are likely the merchants who won't otherwise change their behavior.)
Disabling DCC in Hong Kong and Macau
Hong Kong and Macau can get as non-compliant as China, possibly because many acquirers have cross-border operations and know they can get away with non-compliant firmware and procedures.
In practice, if you are given a DCC slip, and the cashier has not taken a choice before giving you your copy, the slip will be processed in your home currency - be prepared to dispute.
Unable to disable Global Payments DCC in Hong Kong instance #1, instance #2
Unable to disable DBS DCC in Fortress Electronics HK
Unable to disable BoC DCC in Free Duty HK
Disabling DCC in Japan and Korea
Japan's just starting out http://www.flyertalk.com/forum/japan...ing-japan.html and http://www.hongkongcard.com/forum/fo...p?id=3939&p=17 #168 but there are no reports I know of where cardholders are compelled to use DCC against their will.
Korea is also not much affected by DCC but where offered, trying to opt out is harder than Japan due to the language barrier (both verbal and written)
http://www.hongkongcard.com/forum/fo...hp?id=4303&p=3 #23
http://www.hongkongcard.com/forum/fo...p?id=12272&p=2 #11
Disabling DCC in the Maldives
Disabling DCC on Global Payment terminals in the Maldives
Disabling DCC in Thailand and Taiwan
DCC present but generally not an issue. Cashier will generate quote slip is usually generated and pass to cardholder. When cardholder refuses, a verbage-free slip denominated in THB/TWD will be produced.
Certain Taiwan hotels may take deposits in cardholder currency. But these are only pre-authorisations and can be voided in full for TWD-only final checkout payments.
Disabling DCC on Websites
Airbnb - (Since the "loophole" seem not to work anymore, please report if you chargeback the DCC.
)
Hotwire - You need to select your preferred currency before making a search.
PayPal - The instructions to stop the DCC on a recurring charge are here.
I got duped by DCC already before I found this thread. Is there anything I can do?
If you've been hit with DCC and the merchant did not follow the Visa/MC rules, you should file a dispute with your card issuer. Even if the transaction is a small amount, it's worth it to dispute the charge on principle. Do not let merchants get away with this scam uncontested!
If you were not clearly given a choice of currencies and did not specifically communicate a preference to be billed in your card's native currency - if you did not accept DCC - then you have recourse when filing a dispute with your card issuer. The Visa Product and Service Rules clearly state (p 339):
You can even use terminology from Visa Product and Service Rules when filing the dispute, giving Reason Code 76: Incorrect Currency or Transaction Code. Reason Code 76 is used when the transaction was processed with an incorrect transaction code, or an incorrect currency code, or one of the following:
MasterCard's rules also clearly state that the POI Currency Conversion must be decided by both the merchant and customer. When filing a dispute with a MasterCard, list chargeback Reason Code 4846 from the MasterCard Chargeback Guide, which covers POI currency conversion disputes in the following circumstances:
You do have a choice of currencies. Exercise that choice!
Do not get taken by surprise when faced with DCC, and know your options. As Visa/MC purport, you do have a choice of currencies, but you need to make that choice heard! Don't be complacent in this sneaky tactic by some merchants to pad revenues.
Before going to a different country, get educated. Understand the exchange rate relative to your native currency. Know how to recognize when the merchant is trying to force DCC on the transaction, and pull out all of the stops to make sure it doesn't happen to you.
If you have a chip-and-PIN credit card, it's easier to control the transaction to try to prevent DCC. With chip-and-signature, if you get an uncooperative merchant, deface the merchant's copy of the receipt. Write LOCAL OPTION NOT OFFERED, cross out the DCC currency amount, and sign the receipt.
This will give additional evidence when filing a dispute to get the DCC charges refunded. When filing the dispute, you can use the Visa Exchange Rate Calculator or MasterCard's Currency Conversion Tool to determine the Visa or MasterCard exchange rate on the date the transaction posted to your credit card. Compare this to the DCC value to figure out the amount by which the merchant overcharged you. Don't forget to add in any Foreign Transaction Fee if your card has one. (If it does, you should really consider finding a card for use overseas without a FTF.)
Example Images (click for a larger image)
Hotel receipts in China, the Netherlands, and Dubai respectively:
Purchase receipts in China and Korea:
Cancelled translation in Hong Kong:
Novotel in Shenzen:
Dynamic Currency Conversion (DCC) is a "service" some merchants and ATM operators offer that will charge a cardholder in the native currency of the card rather than the local currency. A more complete definition and examples are available via this Wikipedia article on DCC. While sold as a convenience to cardholders traveling outside of their home country, it is a pure profit play by the merchants. You may end up paying a fee of up to 8% over the purchase price for accepting DCC. Always decline DCC and asked to be billed in the local currency!
Where will I see it?
You can be hit with DCC anywhere there is a difference between your debit or credit card's denominated currency and the currency of the location where you're trying to use the card. The most common example will be at a merchant overseas, but now some ATMs are offering the service too. While many US cardholders complain about getting tricked into accepting DCC overseas, some merchants in the US have started to use DCC as well.
What is the issue?
Unless you're the merchant or ATM operator, there isn't much benefit to using DCC. Some customers say they prefer knowing exactly how much they'll be charged in their home currency or may not know the exchange rate of the place where they are visiting. For example, if you are in Prague for two days and you don't know how much the Czech Koruna is worth relative to the US Dollar, you might feel more comfortable knowing that you're buying an item for $205.00 versus 4000 CZK. However, the real exchange rate as of January 18, 2014 would place 4000 CZK at $197.18. You just paid an extra $7.82 for the "convenience" of knowing how much you'd be charged!
DCC often charges about a 4% premium over the true exchange rate. The problems don't stop there since many US banks still charge a 3% foreign transaction fee (FTF) for purchases made outside of the US. Not only would you get hit with the $205.00 charge, you could also find yourself facing a total charge of $211.15 if your card has a 3% FTF.
This is a pure money grab from the merchants, and it's billed as an easy way to squeeze additional revenue out of the transaction. Numerous [1, 2] articles have talked about DCC duping many consumers. Discover even has a warning about being tricked into DCC when using a card abroad.
For example, this FlyerTalk member reported that Avis charged his Saudi credit card in Saudi riyals instead of USD for a car rental in Florida without his consent. This has also been a trend for hotels, particularly large chains as indicated here and here.
DCC is simply not worth it for the consumer. Unless you like paying a convenience fee of up to 5% of the total transaction just to know how much you will be billed, you should always decline DCC and ask to be billed in local currency when handing over your card.
Furthermore, it is in your interest to obtain a card that has a 0% FTF. FlyerTalk member kebosabi maintains a fairly comprehensive spreadsheet of EMV-enabled cards ideal for overseas travel, many of which offer a low or 0% FTF as a feature. There is also a wiki at FlyerGuide of various FTF of debit and credit cards.
What can I do to avoid DCC?
American Express currently does not support DCC on its network, so you are safe from DCC if using an American Express card. However, Visa and MasterCard card networks can support DCC, so be vigilant when purchasing abroad with a Visa or MasterCard branded card. There have been reports of being charged DCC with a Discover card in China [citation needed], but primarily the issue is happening with Visa and MasterCard cards.
Before handing your card to the merchant, always specify clearly that you want to be charged in the local currency and that you do not want DCC. For some transactions, you retain control of your card as you dip it into a chip reader and can view on a screen to select which currency you want to use for the transaction. Always select the local currencyto get the best exchange rate. Do not select the card's native currency!
Similarly, for ATM withdrawals, make sure you decline any kind of conversions. Some good examples of what to look for when using an ATM overseas are here and here. You're probably coming off of a long flight and fatigued, but educating yourself beforehand can save you from getting ripped off. The user interfaces on almost all of these ATMs are set up to encourage you to take the bait, and you have to be extremely vigilant not to fall for it.
If you are doing a PIN-based transaction, you should have the opportunity to review the total amount and denomination of the transaction before entering your PIN. If you are doing a signature transaction and the merchant has processed your transaction with DCC, cross out the amount and write "DCC refused" on the receipt. Do not sign the receipt, and demand that the merchant reverse the transaction and run it in the local currency. If no verification is required due to a small purchase amount, ask the merchant to reverse the charge and repeat the transaction using local currency. If all else fails, file a dispute with your card issuer when you return home. Even if it's immaterial, the banks will get the message like they did with EMV.
Some merchants will claim that their systems have to bill you in your native currency. This is a complete lie. But just like a mag stripe only card, this is battle where you have to be prepared. Don't settle for merchants claiming that "it has to be done this way" or "pay cash if you don't want this". Be prepared to walk away, and, if you must complete the transaction, write "DCC refused & merchant didn't give a choice" on the receipt and cross out the amount. Let the merchant know that you will be filing a dispute with your bank.
Disabling DCC
Disabling DCC on ANZ terminals in Australia
ANZ markets DCC as Customer Preferred Currency (CPC). Terminal operators can contact ANZ Merchant Services at 1800 039 025 to have this feature disabled. Currently, your Visa or MasterCard will be subjected to DCC if denominated in: CAD, CHF, DKK, EUR, GBP, HKD, JPY, MYR, NOK, NZD, SEK, SGD, THB, USD, or ZAR. All DCC transactions on ANZ will cause a 2.5% markup. Steps to avoid DCC:
- Insert, swipe, or tap your payment card
- Have the cashier select credit (CR)
- The terminal will display CREDIT ACCOUNT
- If applicable, enter your PIN
- The terminal will display PROCESSING \ PLEASE WAIT
- The terminal will display EXCH <exchange rate> \ <currency> <amount> \ ACCEPT RATE? \ ENTER=YES CLR=NO
- Instruct the cashier to press the yellow CLEAR (CLR) button (If entering a PIN, you can retain the terminal to perform this step yourself. If entering a signature, you can ask for the terminal to control this process, not indicating that it's a chip-and-signature card.)
- The transaction should now process without DCC
If you see a signature slip with DCC verbiage and a checkbox indicating a currency selection, kindly ask the merchant to void the transaction. If it's a PIN-based transaction, you have an additional opportunity to cancel the transaction because it will ask for your PIN a second time. For instance, if you see "EUR 17.29 KEY PIN" refuse to enter your PIN and start again.
Disabling DCC in China
There are many reports of forced DCC in China, and there is a great thread [closed to new posts] on DCC in China on the the China Destinations forum.
Disabling DCC on Bankcomm terminals in Beijing http://www.hongkongcard.com/forum/fo...p?id=12272&p=2 #19
jair101's DCC instructions of March 2011 http://www.etveg.com/misc/DCC_China.pdf
Disabling DCC in Eurozone and UK
DCC offered in tourist traps (Harrods Knightsbridge/Galleries Lafayette Montparnesse/El Cortes Ingles Grand Via Madrid)
Unlike the rest of the world, Visa Europe does not require merchants to collect a ticked box on the slip (presumably because merchants there don't keep signed slips under Chip-and-PIN)
El Cortes Ingles collects a signature electronically and the DCC selection is made on the signature pad - the choice is respected.
Harrods and GL rely on cashier input in the POS for the currency choice - the cashier may forget to ask. The POS do not offer voiding (only refunds), but since you're given a slip to sign the best thing to do is to deface it before signing and submit chargeback request to issuer bank on return home.
There may be smaller merchants who also collect DCC but I seemed to have pre-empted most of them by saying "charge Euros (Pounds) please"
In Spain all merchants by law are required to provide you with a complaint form called an hoja de reclamaciones if requested. The form has two carbon copies. The customer retains one copy as a record of the complaint. The merchant maintains another copy, and the third is sent to the local consumer protection bureau. Merchants are also required to post a sign conspicuously informing the customer of the right to complain (usually in Spanish and English). Do not accept the lie that they don't have any forms. This is illegal, and you are able to call the police if the merchant refuses to provide you with this official form. It's interesting to see merchants start to squirm when you know the rules, and most merchants will start to be accommodating after you mention it. (Please still fill out the form even if the merchant cooperates after mentioning it because these are likely the merchants who won't otherwise change their behavior.)
Disabling DCC in Hong Kong and Macau
Hong Kong and Macau can get as non-compliant as China, possibly because many acquirers have cross-border operations and know they can get away with non-compliant firmware and procedures.
In practice, if you are given a DCC slip, and the cashier has not taken a choice before giving you your copy, the slip will be processed in your home currency - be prepared to dispute.
Unable to disable Global Payments DCC in Hong Kong instance #1, instance #2
Unable to disable DBS DCC in Fortress Electronics HK
Unable to disable BoC DCC in Free Duty HK
Disabling DCC in Japan and Korea
Japan's just starting out http://www.flyertalk.com/forum/japan...ing-japan.html and http://www.hongkongcard.com/forum/fo...p?id=3939&p=17 #168 but there are no reports I know of where cardholders are compelled to use DCC against their will.
Korea is also not much affected by DCC but where offered, trying to opt out is harder than Japan due to the language barrier (both verbal and written)
http://www.hongkongcard.com/forum/fo...hp?id=4303&p=3 #23
http://www.hongkongcard.com/forum/fo...p?id=12272&p=2 #11
Disabling DCC in the Maldives
Disabling DCC on Global Payment terminals in the Maldives
Disabling DCC in Thailand and Taiwan
DCC present but generally not an issue. Cashier will generate quote slip is usually generated and pass to cardholder. When cardholder refuses, a verbage-free slip denominated in THB/TWD will be produced.
Certain Taiwan hotels may take deposits in cardholder currency. But these are only pre-authorisations and can be voided in full for TWD-only final checkout payments.
Disabling DCC on Websites
Airbnb - (Since the "loophole" seem not to work anymore, please report if you chargeback the DCC.
)Hotwire - You need to select your preferred currency before making a search.
PayPal - The instructions to stop the DCC on a recurring charge are here.
I got duped by DCC already before I found this thread. Is there anything I can do?
If you've been hit with DCC and the merchant did not follow the Visa/MC rules, you should file a dispute with your card issuer. Even if the transaction is a small amount, it's worth it to dispute the charge on principle. Do not let merchants get away with this scam uncontested!
If you were not clearly given a choice of currencies and did not specifically communicate a preference to be billed in your card's native currency - if you did not accept DCC - then you have recourse when filing a dispute with your card issuer. The Visa Product and Service Rules clearly state (p 339):
- Merchants that offer DCC must be compliant with the regulations
- Inform the cardholder that DCC is optional
- Not impose any additional requirements to use local currency
- Not use any language or procedures that may cause the cardholder to choose DCC by default
- Not convert a transaction in the local currency to the card's billing currency after the transaction has completed
- Ensure that the cardholder expressly agrees to DCC
You can even use terminology from Visa Product and Service Rules when filing the dispute, giving Reason Code 76: Incorrect Currency or Transaction Code. Reason Code 76 is used when the transaction was processed with an incorrect transaction code, or an incorrect currency code, or one of the following:
- Merchant did not deposit a transaction receipt in the country where the transaction occurred
- Cardholder was not advised that Dynamic Currency Conversion (DCC) would occur
- Cardholder was refused the choice of paying in the merchant’s local currency
- Merchant processed a credit refund and did not process a reversal or adjustment within 30 calendar days for a transaction receipt processed in error
MasterCard's rules also clearly state that the POI Currency Conversion must be decided by both the merchant and customer. When filing a dispute with a MasterCard, list chargeback Reason Code 4846 from the MasterCard Chargeback Guide, which covers POI currency conversion disputes in the following circumstances:
- The cardholder states that he or she was not given the opportunity to choose the desired currency in which the transactions was completed or did not agree to the currency of the transaction, or
- POI currency conversion took place into a currency that is not the cardholder's billing currency, or
- POI currency conversion took place when the goods or services were priced in the cardholder's billing currency, or
- POI currency conversion took place when cash was disbursed in the cardholdeer's billing currency.
You do have a choice of currencies. Exercise that choice!
Do not get taken by surprise when faced with DCC, and know your options. As Visa/MC purport, you do have a choice of currencies, but you need to make that choice heard! Don't be complacent in this sneaky tactic by some merchants to pad revenues.
Before going to a different country, get educated. Understand the exchange rate relative to your native currency. Know how to recognize when the merchant is trying to force DCC on the transaction, and pull out all of the stops to make sure it doesn't happen to you.
If you have a chip-and-PIN credit card, it's easier to control the transaction to try to prevent DCC. With chip-and-signature, if you get an uncooperative merchant, deface the merchant's copy of the receipt. Write LOCAL OPTION NOT OFFERED, cross out the DCC currency amount, and sign the receipt.
This will give additional evidence when filing a dispute to get the DCC charges refunded. When filing the dispute, you can use the Visa Exchange Rate Calculator or MasterCard's Currency Conversion Tool to determine the Visa or MasterCard exchange rate on the date the transaction posted to your credit card. Compare this to the DCC value to figure out the amount by which the merchant overcharged you. Don't forget to add in any Foreign Transaction Fee if your card has one. (If it does, you should really consider finding a card for use overseas without a FTF.
)Example Images (click for a larger image)
Hotel receipts in China, the Netherlands, and Dubai respectively:
Purchase receipts in China and Korea:
Cancelled translation in Hong Kong:
Novotel in Shenzen:
Dynamic Currency Conversion (DCC) [2014-2016]
Apr 13, 2014, 11:33 am
#226
Join Date: Jul 2007
Posts: 1,762
It also might be a good idea to have an official Association explanation of DCC as well as that of a Wiki. Here is Visa:
"What is dynamic currency conversion?
Dynamic Currency Conversion (DCC), also referred to as Cardholder Preferred Currency (CPC), is a service offered by merchants – not Visa - in some countries when you are traveling abroad. If you choose to use the DCC service, the merchant will convert the purchase price of goods or services at the point of sale from the currency in which the price (i.e., the merchant's local currency) is displayed into another currency (i.e. your home currency) using an exchange rate that typically includes a service fee.
Here's an example of a DCC transaction:
A U.S. Visa cardholder is in Singapore and decides to purchase a box of chocolates priced at SGD 20. At checkout, the merchant offers the cardholder the option to pay in USD using a DCC service.
The merchant dynamically converts the SGD transaction amount to USD 15.80. The DCC transaction amount and transaction currency (in USD) are disclosed to the cardholder. An exchange rate of 0.79 (1 SGD = .79 USD), which includes a 2.5% mark up (over a wholesale exchange rate) and the 2.5% commission/fee/mark up are also disclosed to the cardholder.
The cardholder actively chooses DCC by checking a box on a printed receipt or pushing a button on an electronic screen and agrees to pay USD 15.80 for the box of chocolates using the exchange rate provided by the merchant that includes a 2.5% fee for the DCC service.
If you do not want to use DCC when making a purchase, then you have the right to refuse the offer and have your transaction billed in the merchant's local currency, which will then use Visa's conversion rate. If you did not agree to DCC, but see it on your bill, then you should ask your issuing bank to contest the charge."
http://usa.visa.com/personal/card-be...-rates-faq.jsp
Another crucial point left out of the Visa explanation and not clarified in the Wikipedia, although stated, is that DCC will NOT GIVE YOU THE PRICE YOU WILL BE CHARGED if your card issuer imposes a foreign transaction fee, because that fee will still be imposed with or without DCC. BEWARE!
Finally, if you encounter non-disclosed DCC, which can happen especially at some ATM locations, you can successfully protest with your card issuer. Such protests sometimes work and sometimes do not. In some locations, especially in China, merchants staff often do not know how to reject DCC. Some people, including me, have been successful in negotiating an additional discount adequate to cover the FX excess cost. That only works well if you've internet access and can calculate the typical prevailing rate using Oanda or some other. I have done that numerous times in various parts of China.
"What is dynamic currency conversion?
Dynamic Currency Conversion (DCC), also referred to as Cardholder Preferred Currency (CPC), is a service offered by merchants – not Visa - in some countries when you are traveling abroad. If you choose to use the DCC service, the merchant will convert the purchase price of goods or services at the point of sale from the currency in which the price (i.e., the merchant's local currency) is displayed into another currency (i.e. your home currency) using an exchange rate that typically includes a service fee.
Here's an example of a DCC transaction:
A U.S. Visa cardholder is in Singapore and decides to purchase a box of chocolates priced at SGD 20. At checkout, the merchant offers the cardholder the option to pay in USD using a DCC service.
The merchant dynamically converts the SGD transaction amount to USD 15.80. The DCC transaction amount and transaction currency (in USD) are disclosed to the cardholder. An exchange rate of 0.79 (1 SGD = .79 USD), which includes a 2.5% mark up (over a wholesale exchange rate) and the 2.5% commission/fee/mark up are also disclosed to the cardholder.
The cardholder actively chooses DCC by checking a box on a printed receipt or pushing a button on an electronic screen and agrees to pay USD 15.80 for the box of chocolates using the exchange rate provided by the merchant that includes a 2.5% fee for the DCC service.
If you do not want to use DCC when making a purchase, then you have the right to refuse the offer and have your transaction billed in the merchant's local currency, which will then use Visa's conversion rate. If you did not agree to DCC, but see it on your bill, then you should ask your issuing bank to contest the charge."
http://usa.visa.com/personal/card-be...-rates-faq.jsp
Another crucial point left out of the Visa explanation and not clarified in the Wikipedia, although stated, is that DCC will NOT GIVE YOU THE PRICE YOU WILL BE CHARGED if your card issuer imposes a foreign transaction fee, because that fee will still be imposed with or without DCC. BEWARE!
Finally, if you encounter non-disclosed DCC, which can happen especially at some ATM locations, you can successfully protest with your card issuer. Such protests sometimes work and sometimes do not. In some locations, especially in China, merchants staff often do not know how to reject DCC. Some people, including me, have been successful in negotiating an additional discount adequate to cover the FX excess cost. That only works well if you've internet access and can calculate the typical prevailing rate using Oanda or some other. I have done that numerous times in various parts of China.
Apr 13, 2014, 3:48 pm
#227
Join Date: Nov 2012
Posts: 3,537
Note folks the statement in bold above. That is why writing local currency not offered on the charge slip should lead to a chargeback on the part of your bank (for the person who said Chase refused to charge back the dcc transaction unless the person did not write local currency not offered on the charge slip) and as a matter of interest, might be a reason (we've been arguing this back and forth) why chip and signature is better than chip and pin at least as far as refuting a dcc scammer.
Chase also doesn't seem to be very customer-friendly. If you look on here, there's a case of a person who initiated a chargeback against an incorrect amount and Chase refused the chargeback on the basis they handed the card over, even though they didn't sign the authorisation slip!
Apr 13, 2014, 5:56 pm
#228
Join Date: Jul 2006
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Throwing a bit of an idea here:
Would you guys think it would be best for int'l travelers to be self-prepared by buying this pocket sized self-inking stamp with a note that says "DCC refused & merchant did not offer a choice"
http://www.simplystamps.com/Pocket_S...p-details.aspx
So when the merchant says "blah-blah-blah" and getting into a time wasting argument with them, all you have to do is whip this out, stamp it onto the receipt and be on your way. Now you have a receipt with that statement that you can just stamp it to show to your bank.
That way, less arguing, less wasted time in writing the whole message down with a pen. All you have to do is say "ok - fine," whip this portable stamp out, stamp it to both receipts and be on your merry way.
Merchants will be dumbfounded on what to do because they don't expect people to have self-inking stamps, let alone a pocket sized one that can be easily whipped out and stamped to the receipts that read "DCC refused & merchant did not offer a choice."
IANAL (I am not a lawyer) so someone with expertise could chime in a better statement that can be used for self inking stamps.
Would you guys think it would be best for int'l travelers to be self-prepared by buying this pocket sized self-inking stamp with a note that says "DCC refused & merchant did not offer a choice"
http://www.simplystamps.com/Pocket_S...p-details.aspx
So when the merchant says "blah-blah-blah" and getting into a time wasting argument with them, all you have to do is whip this out, stamp it onto the receipt and be on your way. Now you have a receipt with that statement that you can just stamp it to show to your bank.
That way, less arguing, less wasted time in writing the whole message down with a pen. All you have to do is say "ok - fine," whip this portable stamp out, stamp it to both receipts and be on your merry way.
Merchants will be dumbfounded on what to do because they don't expect people to have self-inking stamps, let alone a pocket sized one that can be easily whipped out and stamped to the receipts that read "DCC refused & merchant did not offer a choice."
IANAL (I am not a lawyer) so someone with expertise could chime in a better statement that can be used for self inking stamps.
Last edited by kebosabi; Apr 13, 2014 at 6:05 pm
Apr 13, 2014, 6:25 pm
#229
Join Date: May 2006
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Apr 13, 2014, 6:38 pm
#230
Join Date: Feb 2013
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Actually, Korea is not that bad in terms of DCC implementation.
In all restaurants I've been to in Seoul, I've never seen DCC. All transactions are done in KRW, and you sign on the pad.
In department stores (like Lotte Department, not Duty Free), you sign on the pad as well, but before that, you have the choice of currency on the pad, so not hard to control at all.
In Duty Free, the price is denominated in USD, so no DCC to worry about.
I've never been to a place where the DCC is locked, but maybe I've been away from obvious tourist traps. Mostly I go to restaurants packed with locals, not ones catering foreigners.
In all restaurants I've been to in Seoul, I've never seen DCC. All transactions are done in KRW, and you sign on the pad.
In department stores (like Lotte Department, not Duty Free), you sign on the pad as well, but before that, you have the choice of currency on the pad, so not hard to control at all.
In Duty Free, the price is denominated in USD, so no DCC to worry about.
I've never been to a place where the DCC is locked, but maybe I've been away from obvious tourist traps. Mostly I go to restaurants packed with locals, not ones catering foreigners.
Apr 13, 2014, 6:56 pm
#231
Join Date: Jan 2008
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Apr 13, 2014, 9:10 pm
#232
Join Date: Jul 2006
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I can attest that many Japanese merchants uses hanko stamps on thermal paper slips to denote who was the cashier processing the credit card.
So I would say yes there are inks that are okay with thermal paper.
So I would say yes there are inks that are okay with thermal paper.
Apr 14, 2014, 12:35 am
#233
Ambassador, Hong Kong and Macau
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On Harrods/Galleries Lafayette slips (where the DCC selection is already made before the cashier prints the integrated sales invoice/card slip), yes some penmanship is required.
Apr 14, 2014, 12:49 am
#234
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In instances like that, rather than waste your precious time arguing with them or taking more of your precious time to write that whole sentence out (which adds to more time and more blah-blah-blahs as you're writing it), you might as well just whip out a pocket sized stamp that says "DCC refused & merchant did not offer a choice" and get going on your merry way.
I think every FTer should have one as their necessary tools for international travel. Maybe we can ask the manufacturer to produce one that says this in mass quantities and sell it on the FT store?
Apr 14, 2014, 1:06 am
#235
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Join Date: Dec 2000
Location: Shanghai
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Yes, this is the part I was referring to that one should just avoid haggling and getting into an lengthy argument with them about DCC.
In instances like that, rather than waste your precious time arguing with them or taking more of your precious time to write that whole sentence out (which adds to more time and more blah-blah-blahs as you're writing it), you might as well just whip out a pocket sized stamp that says "DCC refused & merchant did not offer a choice" and get going on your merry way.
In instances like that, rather than waste your precious time arguing with them or taking more of your precious time to write that whole sentence out (which adds to more time and more blah-blah-blahs as you're writing it), you might as well just whip out a pocket sized stamp that says "DCC refused & merchant did not offer a choice" and get going on your merry way.
Apr 14, 2014, 5:32 am
#236
Join Date: Jan 2008
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In every case I have had easy reversals. HSBC was instant (I am HSBC Premier, probably helped), Chase and Citi were both nearly instant and I did not need to provide any documentation for them.
I have no proof, but I suspect that for premium cardholders who also travel a great deal most major issuers have an almost automatic reversal of DCC.
For hotel users we might want a discussion of non-geographic numbers also. I am not an expert on this subject although I was victimised by it. Marriott, despite my then Platinum status, refused to reverse the charges for me which were roughly GBP 1000 over a three week stay. I then disputed the charge and the dispute (on a Citi issued card) worked. Do any of us know this scam well enough to offer definitive guidance?
Apr 14, 2014, 6:03 am
#237
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Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 7_0_6 like Mac OS X) AppleWebKit/537.51.1 (KHTML, like Gecko) Version/7.0 Mobile/11B651 Safari/9537.53)
"I have no proof, but I suspect that for premium cardholders who also travel a great deal most major issuers have an almost automatic reversal of DCC."
That means the bank did not bother to dispute properly. My current attitude is to encourage the bank to actually dispute and give them all required documentation to do so, however if they refuse then we should still take the bank' money because it is compensation for them not doing the job properly and if they are forced to comp enough they might do something about DCC like force visa to police the system properly and get tough with chronic violators like Bank of China.
"I have no proof, but I suspect that for premium cardholders who also travel a great deal most major issuers have an almost automatic reversal of DCC."
That means the bank did not bother to dispute properly. My current attitude is to encourage the bank to actually dispute and give them all required documentation to do so, however if they refuse then we should still take the bank' money because it is compensation for them not doing the job properly and if they are forced to comp enough they might do something about DCC like force visa to police the system properly and get tough with chronic violators like Bank of China.
Apr 14, 2014, 6:49 am
#238
Join Date: Jan 2008
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Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 7_0_6 like Mac OS X) AppleWebKit/537.51.1 (KHTML, like Gecko) Version/7.0 Mobile/11B651 Safari/9537.53)
"I have no proof, but I suspect that for premium cardholders who also travel a great deal most major issuers have an almost automatic reversal of DCC."
That means the bank did not bother to dispute properly. My current attitude is to encourage the bank to actually dispute and give them all required documentation to do so, however if they refuse then we should still take the bank' money because it is compensation for them not doing the job properly and if they are forced to comp enough they might do something about DCC like force visa to police the system properly and get tough with chronic violators like Bank of China.
"I have no proof, but I suspect that for premium cardholders who also travel a great deal most major issuers have an almost automatic reversal of DCC."
That means the bank did not bother to dispute properly. My current attitude is to encourage the bank to actually dispute and give them all required documentation to do so, however if they refuse then we should still take the bank' money because it is compensation for them not doing the job properly and if they are forced to comp enough they might do something about DCC like force visa to police the system properly and get tough with chronic violators like Bank of China.
Thus, for all conventional disputes I agree completely with your comment. For DCC specifically the discrepancy should be in the transaction history and easily accessible. In many problem case the mandated receipt data as shown in the wiki here may not be furnished, in which case the prima facie evidence favours the purchaser and the chargeback is semi-automatic because the transaction does not meet network standards.
The problem with the previous paragraph is that many processors do not have this chargeback process automated and only a couple of major processing systems actually have automated DCC violation rejection. If you want to know that fine detail send me a PM and I'll be happy to tell you which ones I know actually have this automated. The largest US card issuers have very seriously customised internal processing systems and I do not know which among them have automated DCC rejection processes. Among regional banks, credit unions and local banks virtually none have even basic DCC recognition and their common external processors often know almost nothing about it.
Nearly all major processors in what I call 'full EMV' (i.e. chip plus online pin) as applies to most cards issued around the world do have automatic DCC recognition and rejection when not accompanied by consumer authorisation. The 2017 planned migration for US issuers is likely to end out with almost all significant US issuers having automatic DCC processing too.
Sorry about this excessive amount of detail. This subject has frustrated me for years. I think it should be prohibited but merchants love it because it is so very profitable for them. Among a large merchant class we studied DCC alone accounted for almost a third of total imputed net profits for the retailer class. When margins are tight and consumers are ignorant DCC is an irresistible choice, and POS staff are either unaware or are trained deceptively. I'll make wagers that the EU consumer protection policy will somehow act to constrain major networks operating in the EU from permitting DCC on EU-issued cards. Once that happens there will be more pressure on MasterCard/Visa/JCB and ATM networks to disenable the practice.
While dealing with arcane aspects of this, in many duty-free shops around the world the US$ is the currency charged but does not usually have DCC applied. Further in some countries such as Zimbabwe all card charges will be denominated in US$ because Zimabawe no longer has a currency of it's own. In those cases there still can be foreign transaction charges just as there are in the dozen or so small countries which use the US$ as their currency or 100% back their currency with US$. IIRC none of those have DCC because they bill in US$ anyway, and DCC is less commonly used for non-US$ transactions on non US$ cards.
Apr 14, 2014, 7:20 am
#239
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In many problem case the mandated receipt data as shown in the wiki here may not be furnished, in which case the prima facie evidence favours the purchaser and the chargeback is semi-automatic because the transaction does not meet network standards.
The problem with the previous paragraph is that many processors do not have this chargeback process automated and only a couple of major processing systems actually have automated DCC violation rejection.
The problem with the previous paragraph is that many processors do not have this chargeback process automated and only a couple of major processing systems actually have automated DCC violation rejection.
Sorry I can't get my head around how automated this can be.
I'm sure even the most non-compliant terminal in Shenzhen will still send the appropriate signals saying cardholder has been given a choice, authorization is duly obtained, all is compliant etc. -
it's not like issuers distribute rsa secureid-like tokens to make sure electronically that cardholder has consciously authenticated.
So the only way to really dispute is the paper. Either:
(HK/Singapore model): cardholder practically required to furnish proof what they signed before bank will start chargeback. I did one - took six weeks http://www.flyertalk.com/forum/china...on-45.html#675 even though the restaurant is just practically an hour's boat ride from where I live (Macau is a separate Special Administrative Region, and is treated as a foreign country as far as Hong Kong is concerned)
Rest of world model?: merchant is required to present proof cardholder opted in to DCC. Issuer bank disputes the acquirer via Visanet, acquirer informs the merchant, merchant either represents the slip - has 45 days per the VIOR - or waits for the end of the representment period and debits the amount via visanet.
In both cases there is delay and review of paper. So i don't see how automated this process can get.
Last edited by percysmith; Apr 14, 2014 at 7:39 am
Apr 14, 2014, 7:38 am
#240
Join Date: Jul 2007
Posts: 1,762
As far as the hotels are concerned, many have pulled the Avis trip i.e. burying in the check in document you are pressured to sign an agreement to accept dcc. If it's in England, assuming you are from an English speaking country, it is of course in a way your fault for not reading what you're signing. However in non English speaking countries, say in Italy, how many would recognize their agreeing to be billed in their own country. The solution is to write in bold letters on the check in slip, no matter what, if it's in a language you don't understand, bill in euro (or whatever the local currency is) only. Perhaps we can produce a stamp, like a date stamp with movable bands, with all the currencies. You know Bill in (select the currency) only!