Just want to say thank you to all of those here that take the time to complain/chargeback regardless of the dollar amount. That is the only way (besides lobbying) to put pressure on the banks to make changes. Now if only CNN would run a special report, "Travelers Beware" style.

Exactly. I already got $1.21 back from the first claim... I think I'm owed another $0.50 still on the 2nd on... props to Citi/MC for being so quick.

Full chargeback means that the bank actually "charges back" the merchant and has them redo the transaction in the local currency. As the consumer it doesn't make a difference; you still get the same amount of money as a credit. The bank will just suck up the cost ( of the DCC) as the cost of business and give you a coutresy credit because chargebacks could cost more time and money than just the $1 difference.

The Kickstarter closed just now. According to Chase's notification emails/texts, their exchange rate worked out to be about 0.4% in their favor compared to Visa's. Definitely not high enough to make DCC a factor. ^

Sorry Jeffjaguar, I actually don't know exactly where the 1% comes from - you mentioned it first:

I thought you meant the 0.8% Mastercard FTF they charge to issuers (who then on-charge it to us) or the 1% Visa FTF mentioned in the washingtonpost article which they soon abandoned.

Visa and MC also charge 1% when a currency conversion has taken place, but I'm sure neither one of us is thinking about that.

I'm thinking Visa and MC give a reasonable conversion rate, and earn a reasonable 1% on top of that.

Let's be honest here, no one can convert currencies for free, right? If you go to a bank to convert, it's gonna be much higher than 1%.

And, some CCs are eating up that 1%, so we have the best deal in oversee spending.

1% is reasonable, but DCC's markup of the typical 3-5% is not.

I think the underlying core is whether the fees are justified or not. With actual in-person based currency exchanges, the fees you can make sense of because of the need to recover labor cost, rent for the store space, non-real time currency exchange rates, the risks involved with security, as well as the cost to bring in and store foreign currencies.

But with credit cards, everything is electronic and in real time these days so there really is no justification for such high fees.

There are still opportunities for arbitrage, and you have to find a willing buyer/seller for the currency. I contend that there is still overhead with currency conversion, but DCC is a pure profit grab from the merchants and acquirers.

Most banking fees have little, if anything, to do with the cost of providing the service. They are set based on what the market will bear.

The same is often true in other industries as well.

In this case, it's largely due to consumer ignorance of or indifference toward the better options that may be available.

Exactly. However, if you go to a Travelex, 3% to 5% is what you expect to see.

I am shocked people still go to those places to exchange money...

That's why it's only 1%, which is really not so high. Even the UnionPay, which boasts non FTF, charges around 0.5% implicitly in their distorted exchange rates.

My opinion is "not looking like much doesn't mean there isn't". Let's face it, most banks do business online as well, but can you get the interbank rate with them if you exchange money using their online banking?

I've really not seen any rates better than Visa/MC rates.

Kudos.

I think DCC is comparable to money exchange booths, in terms of markup percentage. This way they think they have some justifications...

Only savvy travelers know how to use no FTF Visa/MC debit cards to withdraw money oversees to get the best rates, and only savvy travelers know how to use no FTF CCs (while avoiding DCC) to get the most rewarding oversees spending as well. We care about how to beat the game.

Those who don't know, will just contribute to DCC/money exchange market. The fact that there are these don't knowers, is no shocking to me at all...

DCC Policy for Accor Hotels?
 

Has anyone had any recent experience with Accor Hotels, particularly Novotel? I reserved a room next week Thursday at the Taoyuan Novotel, and I don't trust the pricing information that the website gives. The website says that the pricing information (defaults to USD) is for informational purposes only and that the charges would be billed based on the hotel's local currency. However, I know that this particular hotel offers the option of DCC, so I didn't want to get snared with DCC by prepaying the room. (I usually don't do prepaid rooms anyway since the flexibility is nice.)

My strategy here was to book the fully flexible room rate and use an AmEx Platinum (no FTF fee/possibility of DCC) to guarantee the reservation. Upon check-in I'll again use the AmEx Platinum for the room authorization hold. When I check out, I'll use my Chase Sapphire Preferred and request local currency. Thoughts on this process? Am I being overly paranoid? :D

Not all Accor hotels require card hold - French ones don't for instance.

However British ones do. I remember using my AE to hold, and asking them if I can check out with a MC (which had a promo at the time). The receptionist said fine, AE not charged at the time, and charged my stay to the MC on checkout. No charge on AE.

The Taoyuan Novotel has required a hold upon check-in every time I've stayed there. They did it in USD on my Chase card last time - the first time I had become hyper aware of DCC. They assured me that it was only an authorization hold and would fall off of my card without being charged, which it did. I'll probably follow your lead and present the Visa at checkout but use AE upon check-in for the hold.

DCC in Indonesia
 

I always thought Indonesia can't have DCC cos the BNI didn't allow it.

However I got the first quote slip today (a 3.2% scalp to the idr/hkd oanda rate), even though even by the merchant slip there was no verbage. Nor on the cardholder slip.

So I assume a Bangkok-style DCC system is in place here - I don't mind that.

I assume the cashier made an idr input for me or the default is to idr.

Nothing more effective to wake me up from a 5:30 start on a Sunday morning.

I know what you mean there. Whenever I see the DCC language I get a surge of adrenaline. So this system was the quote checkbox like in Taiwan?

For the other times I was asked if I wanted to pay in USD, which I declined and asked to pay in GBP. No pushback except for the 2 referenced earlier. I need to check my card statement to ensure no unexpected issues, but everything seemed to go fine.

http://www.hongkongcard.com/webedito...5436_44946.jpg

http://www.hongkongcard.com/webedito...5250_95186.jpg

No other encounters with DCC.

First report in Taiwan...

We arrived late Thursday evening at around 11pm local time to the Taoyuan Novotel. I noticed a number of folios at check-in, and they all did DCC on the room authorization hold of the equivalent of 7000 NTD in USD with the [X] box checked. Knowing from experience that they automatically select DCC here for the authorization hold, I used my AmEx Platinum as planned. I noticed two things on the receipt:

http://i.imgur.com/UtFdQPUm.jpg

The first is that (S) indicates that the card was swiped, not an EMV transaction? I was too tired to notice whether or not the receptionist swiped the card. The second is the transaction type says "PREAUTH". I assume the DCC rules and choices still apply for this transaction type, but the receptionists at this hotel have always told me in the past that DCC doesn't matter in this case because it's a hold only. However, in the case this charge were to post, it would be a transaction with DCC applied.

I used my Chase Sapphire Preferred at checkout and requested to be billed in NTD:

http://i.imgur.com/5kGND3mm.jpg

This time the receptionist did an EMV transaction, and you can see (C) after the card number. (I've redacted all but the last four digits, my name, and authorization code.) Since I had indicated I wanted NTD, the receptionist had already printed out the above receipt and handed me the quote/signature slip to sign plus the above receipt in tandem. To cover my bases, I still checked the [X] NTD box before signing.

A couple of things to note here. First, Chase is showing a pending transaction in the amount of 192.03, the DCC rate. I think the above receipt indicates that I am in fact safe from DCC even though the pending transaction is the DCC amount, right? It's just like a car rental or hotel authorization hold might be higher than the final posted charge.

Finally, there is a nice 4.8% DCC fee markup on the exchange rate. It makes you wonder how many people fall for DCC without realizing it. :td:

EDIT: I just noticed that the pending charge is for "Novotel Hotels DCC". It's even in the title!

Don't worry. With POS that has DCC function, the hold amount is usually the DCC amount, when DCC is actually turned off. This will turn out to be fine when it is posted.

If yours situation is not like the one mentioned above, we will see a world's first...

Regarding the PREAUTH, I assume they never bother to choose the right currency for the hold, and they always choose to run another sale transaction instead of using the proper way of COMPLETE AUTH.

Agree. This is like my Maldives DCC case which was posted properly in USD in the end.

Yeah, I remember the Maldives case. I guess I didn't encounter this preauthorization situation with the two times I encountered DCC most recently in Australia because there they don't generate the quote slip beforehand. If the DCC verbiage prints on the receipt, it's too late. I believe this is how it's done with most terminals in the mainland too? That is to say... once you've seen a pending transaction with the DCC amount, you've likely been hit.

I think the ideas got mixed up in your above statement...

First, if the DCC verbiage is printed, then it means you've been already hit by DCC, no matter whether you have boxes to tick on the slip... Yes, this is how it is done in the Mainland.

Second, if the DCC amount is pending, that does NOT mean anything dangerous. It is just how these DCC-enabled machine do transactions. They hold the DCC amount no matter what, and post the DCC/non-DCC amount based on whether you've dodged DCC.

Third, if the DCC is used on PREAUTH, simply request them to run another sales transaction without DCC, and cancel the PREAUTH, instead of completing it. I do think if the PREAUTH is DCCed, one cannot turn it off when completing it.

Interesting. The two times I encountered DCC in Australia in June the pending transaction amount with Chase was the non-DCC amount. I understand that I may not have been hit with DCC even if the pending transaction is the DCC amount.

Finally, I wasn't aware that a PREAUTH transaction with DCC cannot be converted to a non-DCC transaction later. This is why I used the AmEx for the authorization hold at the Novotel, just in case.

Come to think about it, I might be wrong in the PREAUTH thing. There has been instances that I got PREAUTH in CNY, but got USD "DCC COMPLETE"... So these two might not need to have the same currency used.

But for the pending amount, I've seen so many times in China that I got DCC (or 3% higher than normal USD amount) amount pending, but the posting amount was right. I guess the pending amount is determined by the POS firmware, and some DCC machine hold the DCC amount no matter what.

We went to moondog's ABC place. And also BoC place. We managed to fix the BoC but couldn't get to work on the ABC place. I'll recount the latter first.

ABC shop

Me: (picking up a can of soda water, moondog picks a bottle of vitamin water) "they take visa for this? If we tried this in hk we'd be told off!"
Moondog: "it doesn't cost them! They take it even for one bottle."
(We walk the can and bottle to pay. They are RMB10. Moondog hands over his Visa card.)
Cashier points to visa hologram: "this one? We're no longer accepting this"
Me: (to moondog) "you know her? She knows about the DCC problem?"
Moondog: "yeah I'm buying stuff from her every week!"
Me: (to cashier) "why?"
Cashier: "cos a. we have to pay fee for visa and b. your friend over there told me off for crap exchange rate!"
Me: (to moondog) "so she does know you!"
Me: (to cashier) (showing BoC exchange rate shot below) "so is there any similar screen in your ABC terminal?"
Cashier looks at my photo: "No. No such display"
Me: "tell you what" (handing over my HSBC visa). "Swipe this, cancel this straight after and I will cash you out"
Cashier: "what do you mean?"
Me: "well, after you charged this visa rmb10, can you void it?"
Cashier: "no, I don't know how to void."
Me: (to moondog) "I think the experiment has to stop here. She's not as comfortable as the BoC guy with us mucking around the terminal, and if she doesn't know how to void then she has to pay the fee even if we're fine paying inflated rates on RMB10"
(We paid RMB10 in cash and left)

With the several posts on reauthorisation I suspect a clarification is in order. A reauthorisation is NOT a chargeable transaction and has precisely zero financial impact. Only the final charge is a financial transaction. DCC, if applied, applies to the actual charge, not the reauthorisation. That is true whatever a print may say, just as long as it is clear that the question is 'authorisation' not a charge. Card systems do not match the reauthorisation to the actual charge in any finical way at all, in fact most preauthorisations are for a much higher amount (as in hotel preauths that include all expected charges and an estimate of large additions charges, car rentals that include a collision deductible in preach) than is the actual charge. The DCC selection is applied to the end transaction only; even though the merchant may include it in the prauth that has no transactional effect.

Many merchant employees and most customers are not aware of the significance of a preach. Under no circumstances can a preauth produce a charge. The systems are referred to as "two channel" partly because of that, with the function of preach being to confirm the existence of the account and available credit. The preauth drops off automatically if no transaction arrives, and if a transaction arrives with the preach reference. The reference proves the merchant verified the card and the availability of credit, but the amount submitted can be almost anything higher lower or even the same as the preauth. The systems do not check for amount matching between the two at all.

The hold, of course, happens in the currency in which the account is denominated and has nothing to do with the transaction currency, so DCC or no is not actually a factor. The "right" currency for a hold is the currency of record for the account, not the merchants currency.

The "complete auth" does not exist. Authorisations are NOT sale transactions, they are account verifications. So, a sale transaction must be made or the authorisation simply expires. The sale transaction generally refers to the authorisation in oder to prove the merchant did verify the availability and legitimacy of the account, but the auth has nothing whatsoever to do with the actual sale other than verification. The authorisation is completed by the issuing bank confirming that then account is in good order. That is all it is.

BoC Slip

Alright, the BoC shop we managed to fix. Photos took me forever to clean up. The owner of the merchant asserted he did not ask for DCC to be installed, does not profit-share from DCC or receive a reduction in fees, and will very much like us to get rid of DCC because he is sick of handling DCC complaints:

Bad slip (cashier performs normal procedures):

http://www.hongkongcard.com/webedito...3125_42423.jpg

http://www.hongkongcard.com/webedito...3133_30733.jpg

http://www.hongkongcard.com/webedito...3141_62300.jpg

http://www.hongkongcard.com/webedito...3147_29725.jpg

(this screen only displays for three seconds)

http://www.hongkongcard.com/webedito...3209_34353.jpg

http://www.hongkongcard.com/webedito...3219_47747.jpg

Good slip:

http://www.hongkongcard.com/webedito...3242_99479.jpg

http://www.hongkongcard.com/webedito...3256_93315.jpg

http://www.hongkongcard.com/webedito...3303_87925.jpg

*** must press cancel within three seconds of this screen appearing ***

http://www.hongkongcard.com/webedito...3412_98601.jpg

(press Enter)

http://www.hongkongcard.com/webedito...3436_90854.jpg

http://www.hongkongcard.com/webedito...3448_88516.jpg

Free of verbage.

The three second wait in the ENQUIRE screen before opting-in cardholders is blatantly non-compliant - cashiers shouldn't be made to play wack-a-mole to opt foreign cardholders out of DCC.

BoC really seems to be immune from consequential action by Visa/Mastercard International. It effectively has a come beat me silly if you dare sign up for years and it still can take Visas and Mastercards. Probably any bank from a smaller country like Taiwan or Vietnam will have its central bank directed to discpline the bank directly, but CPG probably does the opposite and encourages DCC growth.

But I'm actually surprised BoC even included such an enquiry. My last up-close of a BoC DCC terminal did not, but that one was not tethered to this base. The one we saw tonight was not detachable. I wonder do detachable ones have pre-loaded rates or something?

I know by posting, I run the risk that BoC will plug the gap. However I hope some visitors to China will be able to opt out such an aggressive DCC terminal before BoC finds this post and updates the firmware. If that happens I have the consolation prize that I forced BoC to spend money fixing its DCC terminals anyway.

Thanks jbcarioca. I have a question though. A preauthorization is meant to ensure customer X is good to pay $Y amount of money by making sure he can't use his credit for other payments.

I've a question concerning merchants preauthorizing amounts close to my credit limit and then trying to authrorize those amounts. Would they be unable to because my credit limit's all used up? Would they have to call Visa to try and get the preauthorizations removed?

I read there's a Preauthorization Payments Cancellation Service that does this http://usa.visa.com/download/merchan...n.pdf#page=381 - is that the function merchants should use under the above circumstances?

Thanks so much for the information. So this will work for any BoC terminal in the Mainland? What about in HK or Macau?

When I encountered DCC at the coffee shop in Brisbane there was a similar prompt with an ANZ terminal, but I didn't remember there being a 3-second window in which to decline DCC before it opted the customer in. The only reason I had access to the terminal at that point was because the cashier thought I was going to enter my PIN. The language on the ANZ terminal was more ambiguous than this. It only had something to the effect of "RATE xxxxxxxxxx \ USD ACCEPT?" An unsuspecting tourist or naive cashier would just keep pressing OK.

You said the store no longer takes Visas because of DCC complaints. I assume it's more than just you and moondog lodging those complaints? :D

At any rate, I imagine the checkbox receipt like that would be a rock solid case in the event of an actual chargeback, right?

The checkbox is, indeed, a solid case against the DCC amount, but IME even when filing chargebacks, credit card issues would prefer to simply credit accounts for the difference... they even prefer to take your word for the amount in dispute than do research of their own for discrepancies under ~$10.

This is the unfortunate aspect of DCC. I would say smaller purchases are more likely to get hit with DCC without a way to opt out. Hotels, department stores, etc. usually have a way to disable DCC without too much hassle and there's almost always an opportunity to at the very least deface the receipt. With small purchases there might be no verification required. I don't really care as long as I'm not out the money, but you have to wonder when issuers will say, "Enough is enough!" and start filing chargebacks.

Thanks for the information. However I did see things as "DCC Complete" and "Authorization Complete" when I paid my bill at InterContinental Beichen in Beijing. I believe this is the thing you mentioned about "no need to match the sales to any authorization".

Based on my observation, is that possible maybe in BoC's system, there are these ways:

1) Merchant runs a separate sales transaction, the money is deducted, and merchant cancels the authorization afterwards in a separate move. This way, if the cancelling is done second, we would have the "over the limit" problem mentioned by percysmith, because the authorization eats up the available credit, right?

2) Merchant runs a "Authorization Complete" or "DCC Complete", and the authorization is cancelled first then the amount deducted. Because I did see the guy at the front desk pulled out the files, found my authorization slip, keyed in all the information, and my final sales slip was printed out without me swiping the card again.

I think all the hotels BoC terminals behave like this. I don't know whether they display the rate, but I guess so. It's just like hitting cancel after hitting OK, something like that. It's either the rate being displayed, or as in 交行's situation, "查询汇率" being displayed...

I think you're right about the basic order of operations being the same, but this machine struck me as far less forgiving than BOC machines that I defeated in Beijing during year's past. I feel like it had a much shorter window in which to act (i.e. "3 seconds" is a generous estimate).

I think 交行 machines in Beijing have a similarly short window... So do the BoC machines here...

That's why I think the market in Shanghai and surrounding areas do business better than in the North...

The China displays are a trifle odd in translation. The "authorisation complete" phrase indicates that the charge being generated was actually reauthorised, thus absolving the merchant from chargeback, just as you suggested if I understood correctly.

The "correct" sequence requires the card physically to be presented, in a card present case, only once, so a charge can be made without seeing the card again if a reauthorisation was done. The authorisation automatically cancels in the settlement process as soon as the charge referencing an authorisation hits the issuing bank processor. The actual system of record for an authorisation is the issuing bank, so, once reauthorised the merchant has nothing to do with it again. The China oddity is that the merchant data "authorisation complete" in most countries never leaves merchant systems and a customer would never see it. BOC, in particular, seems to give a trifle too much information, even if it is not what you want. CUP is another story, and has a few quirks of it's own.

It's also weird when we discuss debit cards...or prepaid cards. These systems are gradually standardising but I'd not bet on consistency much before 2017, if then.

Actually any consumer can request a chargeback if the transaction is, in their view, incorrect. Issuers really don't care at all so long as their customers pay. It's in the nature of DCC that nobody cares except a handful of consumers who are savvy to the ways of the world, the participants in this thread, for example. Everyone at a senior level in banks that I know does not like DCC, but merchants absolutely love it! The savvy merchants don't tell their employees anything bad about DCC, for the most part, and the processors create sales blurbs for DCC, pointing out, in at least one case I know, that a typical supermarket can triple net profit with DCC. Nobody complains, as a general rule and many consumers think it's wonderful. It is only us who complain.

Ignorance is bliss, as they say.