I stayed at a hotel in Beijing last month (I won't name which because I've been in discussion with the hotel manager about the incident and he's been very receptive to my comments). Got hit with DCC when the person who was checking me out hit the USD button without asking me. Fortunately I was vigilant, and when I saw the charge come up in USD on the receipt, I made the person behind the counter reverse the charge and do it properly in RMB.

I emailed the hotel manager with several complaints about the hotel (one of which was using DCC) and he said that the hotel doesn't control the exchange rates; the Bank of China does. I suggested that they simply stop offering DCC, since the 4.1% rate they were going to charge me was much greater than the FTF charged by the worst offending banks (which charge 3%). My card happens to charge 0%.

Why would a merchant do this by default? Do they get some sort of kickback from the bank if they let the bank rip off the customer?

If you read the brochures credit card processors send to merchants enticing them to sign up, the answer to your last question is a resounding YES. Also note that when a bank has a foreign transaction fee, one gets hit with the 3% even if the charge is DCC'd so it would really be 7%.

Now sometimes, remember, there is a 16 year old kid (not so much in a hotel of course) working behind the counter and their training is such that since the vast majority of people think it's wonderful they are being billed in a currency they are familiar with or buy into it's a good exchange rate (one of the lies is that it's a good exchange rate but what they do is compare the rate not with the interbank rate but the rate posted in the bank windows for cash exchange which is usually about 10% above the interbank rate anyway). Yada yada yada. That is why I never take out my frustration on the clerk but after the clerk gives one of the lies, politely ask to see the manager. Now I don't know the situation say in China but when I ran int my problem in Ireland, the manager was the same age as the clerk but given the title manager and refused to change it saying there was noo rule in Ireland that I had to consent to be scammed. So I carried out the procedure of writing dcc declined, crossing out the USD amount and circling the euro amount. The manager asked me why I was doing that. I said because I'm going to dispute the charge when I get home as you're breaking your contract with in this case visa. As it turned out, doggone it, my bank simply refunded the 54¢ difference instead of charging it back to teach those clowns a lesson.

The reality is most people you deal with on the retail level have no idea about what's going on with this. That is the reason people in the know must continue to fight this scam because it is spreading like wildfire throughout the travelling world!

They sure do but in many cases the cashier has been trained to simply press the accept dcc button without asking and remembering the average cashier is probably some student looking to pick up a few euro or pounds or whatever for a part time job, they don't usually have a clue.

Agreed, but I'm responding to the person who was talking about a no CVM transaction automatically triggering DCC.

Banks may continue to eat the cost now, but what about if more and more people start submitting claims about being scammed by DCC? Surely it cost your bank more than 54¢ to reverse to you. If enough people start to complain, issuers can begin to change their tune. For example, how recently would you get the line of "all merchants are required by Visa/MC policy to accept all cards blah blah blah..." when you asked why the bank didn't issue cards with EMV? That's all you would hear from them about two years ago.

When I went to call about getting a new card from Chase with EMV last week, the story was completely different. The rep not only knew about EMV, but he knew the differences between chip-and-signature and chip-and-PIN. Granted this could have been one of the few who was in the know, but I doubt it.

I don't know the process as a cashier for this scenario, but I think they would have to opt for it for the terminals to be in compliance with Visa policy.

The bank probably ate the charge because it was a small amount. If it's a larger amount, say $50 on a hotel stay, they probably initiate a chargeback which might incur a fee on the merchant by his or her bank.

Hi moondog, I'll add this to the wiki. I started this thread to be more of a comprehensive discussion of DCC, but the China thread has some great information.

I experienced a rather annoying DCC scam at my wife's doctor's office in Shanghai. It was a $9k bill (neo-natal care and prepayment for hospital), and the invoice came in USD. We had previously paid in CNY at this office, but we tried every POS machine and could only get USD. I ended up using my AMEX and paying the int'l transaction fees, but I unwilling to eat the ludicrous FOREX rates offered by Bank of China and China merchant's bank. In this case, at least, the whole finance staff of the hospital claimed to be uninformed.

If it was simply a scam by the teller, it would be easy to overcome. The fact that the banks set the machines in such a way to prevent local currency transactions makes it so much worse to do business. I just stopped using merchants with DCC issues, though the staff was often unable to understand exactly why...

Why not just pay the bill, then have your CC issuer initiate a chargeback for the "overpaid" portion -- the difference between the Visa/MC rate in effect at the time and the DCC rate you were charged? That's perhaps the best way to send a message to these merchants that this behavior is unacceptable (and one that has real consequences as far as the fees they're paying to Visa/MC).

I stayed at the Parkyard Hotel in Shanghai one time and they hit me with DCC and refused to reverse it. So I just initiated a chargeback and hit them where it hurts the most: on their bottom line.

I used to play the chargeback game myself, but have long since given up because I was wasting lots of time and I don't think the merchants/acquirers actually cared (for every squeaky wheel, there are 100 other people that generate substantial bonus profits). The idea of boycotting DCC establishments is all well and good, but you'd have trouble eating in Shanghai if you maintained this policy. I usually simply pay cash or use Unionpay these days.

I agree. ^ Thanks for starting it, and for creating a detailed wiki.

Is Discover susceptible to DCC? I've heard conflicting stories. I don't have a Discover card, so I've never been in a situation to use it with a UnionPay or JCB machine.

As far as giving up on the chargeback game, it's more a matter of principle. You're right that a lot of the merchants probably don't care. Your bank certainly does though because they have to go through the chargeback process each time you file a dispute. For example, a few years ago if you called a US bank and asked about them issuing a card with an EMV chip for overseas travel they wouldn't know what you were talking about and would just repeat the line, "All merchants who accept Visa/MC have to accept all cards blah blah blah..." Now they've changed their story and specifically tout chip-and-signature as cards to facilitate things when traveling overseas.

China by far seems to be the worst DCC offender. In Taiwan I've always asked, and they've been able to accommodate DCC-free transactions. I only visited HK and Macau a few years ago before I learned about DCC, but fortunately I only got hit with DCC one time. Unfortunately, it was for my bill at the Venetian Macau so it cost me $30+. :mad:

I've heard rumors that Discover was developing its own breed of DCC, but for now Union Pay terminals do not have DCC functionality.

Regarding your point about chargebacks being annoying for my bank, you're probably right, and they are certainly far more costly than the amount of most disputes (i.e. I used to flood them with batches of 100 receipts at a time and let them figure out the differences between the DCC and spot fx rates), but it's not like BoC, HSBC, or 交行 would ever care about Charles Schwab Bank's opinion.

HK used to be far better than China (i.e. mandatory DCC was rare), but I've noticed that it is starting to spread there at an alarming rate as well, which I suppose shouldn't be too surprising because many Chinese acquirers also operate in HK.

In the China forum thread, we've posted DCC workarounds for several popular POS machines. The problem is they are continuing to "innovate" faster than us.

Given that the poster actually had to pay his wife's *doctor*, I don't think boycotting the merchant was an option in this case. I would have just given them the card and warned about chargebacks if they used DCC.

But wouldn't Visa/Mastercard threaten to pull business from ALL of said banks/merchants if they get too many chargebacks? That's what you're really after: either make them pay higher fees, or get their ability to accept CCs pulled entirely, due to being sleazy.