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]
Aug 30, 2014 | 11:42 pm
#961
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,961
I have to disagree. In my view, earning better rewards at a particular establishment shouldn't be a more important factor in using a card than being DCCed.
i.e.
Card A (VISA or MC): gives you 3% in rewards at a certain restaurant in China, but likely to be auto-DCCed
Card B (Discover through Union Pay): gives you only 1% in rewards at that same restaurant but won't be subject to DCC
My view is similar to my stance with EMV: the 3% restaurant reward isn't worth the hassle arguing with a cashier, who may or may not have the authority to do it or something the terminal is auto-set to, who may or may not understand the same language as I do, with lots of irritated people behind me, so I'll just whip out a Discover Card if there's an Union Pay sign at that establishment.
More market share goes to Discover, less market share to VISA and MC. The more American visitors to China start doing this, the more VISA and MC will realize their DCC idea is hurting their business in China and it's market is being usurped away to the Discover-Union Pay-JCB alliance. Change comes through competition, I say.
i.e.
Card A (VISA or MC): gives you 3% in rewards at a certain restaurant in China, but likely to be auto-DCCed
Card B (Discover through Union Pay): gives you only 1% in rewards at that same restaurant but won't be subject to DCC
My view is similar to my stance with EMV: the 3% restaurant reward isn't worth the hassle arguing with a cashier, who may or may not have the authority to do it or something the terminal is auto-set to, who may or may not understand the same language as I do, with lots of irritated people behind me, so I'll just whip out a Discover Card if there's an Union Pay sign at that establishment.
More market share goes to Discover, less market share to VISA and MC. The more American visitors to China start doing this, the more VISA and MC will realize their DCC idea is hurting their business in China and it's market is being usurped away to the Discover-Union Pay-JCB alliance. Change comes through competition, I say.
We're always trying to optimize our earn and burn ratios. 
If I play the devil's advocate, I would say we could avoid both of these problems, DCC and lack of EMV/PIN transactions, by paying cash. Furthermore, I don't expect all merchants would know about the Discover/JCB/UnionPay interoperability agreements. You said it yourself on the EMV thread that you wouldn't expect a cashier at Taco Bell in Missoula, MT to accept a JCB credit card, so why assume the reverse would be true?I'm afraid we're some of the few who care about these issues, so even if all of us switched to using Discover only in China it wouldn't even be a blip on Visa/MC's radar. There would be plenty of unsuspecting visitors with foreign currency denominated cards getting hit with DCC.
Aug 31, 2014 | 12:27 am
#962
Join Date: Jul 2006
Location: LAX
Programs: AA EXP 1.5MM, Asiana Club Silver, KE Morning Calm, Hyatt Platinum, Amtrak Select
Posts: 7,161
If it's a three way race between choosing VISA/MC vs. Discover vs. cash, then the best option will still be Discover. Less hassle, no annual fee, no FTF, no DCC, and still earns something.
And for the Discover card that I have, between Jan-Mar, restaurants earn 5% cashback, so if I'm in Asia during that time, Discover actually becomes my preferred card at the restaurant in China.
Furthermore, I don't expect all merchants would know about the Discover/JCB/UnionPay interoperability agreements. You said it yourself on the EMV thread that you wouldn't expect a cashier at Taco Bell in Missoula, MT to accept a JCB credit card, so why assume the reverse would be true?
For Discover and Union Pay however, Discover actually has this printable wallet card pdf that I can cut, fold, and laminate. Haven't had any trouble so far in China by just handing this pdf to them, which is a great plus for someone who can't speak Mandarin or Cantonese (but can sort of read the characters through kanji).
And no, I have no idea why Discover would have this printable wallet card for Union Pay but not for JCB. Thanks for putting into light of this, I'll send off a secure message to Discover if they can create a wallet card pdf for JCB merchants in Japan as well.
Aug 31, 2014 | 12:29 am
#963
Join Date: Nov 2012
Posts: 3,537
Taco Bell in Missoula happily accepts UnionPay cards at least, and finds them interesting, so I doubt JCB would be an issue.
Aug 31, 2014 | 12:43 am
#964
Join Date: Jul 2006
Location: LAX
Programs: AA EXP 1.5MM, Asiana Club Silver, KE Morning Calm, Hyatt Platinum, Amtrak Select
Posts: 7,161
I also recall you mentioning that since Missoula is a college town with int'l students. The Taco Bell and likely the Burger King next to it are likely to be well aware of int'l students paying for stuff with Union Pay cards.
Aug 31, 2014 | 12:44 am
#965
A FlyerTalk Posting Legend
Join Date: Dec 2000
Location: Shanghai
Posts: 46,317
My other half is from Taiwan, so she has little desire to visit the Mainland either. To date, we still haven't visited, so I haven't had the displeasure of experiencing forced DCC. We'll be back in Macau and Hong Kong in October, so I can test out a few problem spots if you'd like with my USD denominated card.
@percysmith: The restaurant manager I told you about here in Shekou is really looking forward to meeting you because he is embarrassed by DCC, and wants to fix the problem. He promises us free drinks for our efforts.
Aug 31, 2014 | 12:52 am
#966
Join Date: Mar 2014
Posts: 162
Thanks for this thread! When I was offered to pay in usd in Scotland I knew what it was.
Data points:
Had one vendor tell me there are no fees for it and the rate is better than my card offers.
Had one vendor tell me the register is set that way and they can't change it.
I'm worried for Hong Kong but glad that bringing discover is an option.
Data points:
Had one vendor tell me there are no fees for it and the rate is better than my card offers.
Had one vendor tell me the register is set that way and they can't change it.
I'm worried for Hong Kong but glad that bringing discover is an option.
Aug 31, 2014 | 4:49 am
#967
Ambassador, Hong Kong and Macau
Join Date: May 2009
Location: HKG
Programs: Non-top tier Asia Miles member
Posts: 22,112
I have to disagree. In my view, earning better rewards at a particular establishment shouldn't be a more important factor in using a card than being DCCed.
i.e.
Card A (VISA or MC): gives you 3% in rewards at a certain restaurant in China, but likely to be auto-DCCed
Card B (Discover through Union Pay): gives you only 1% in rewards at that same restaurant but won't be subject to DCC
My view is similar to my stance with EMV: the 3% restaurant reward isn't worth the hassle arguing with a cashier, who may or may not have the authority to do it or something the terminal is auto-set to, who may or may not understand the same language as I do, with lots of irritated people behind me, so I'll just whip out a Discover Card if there's an Union Pay sign at that establishment.
More market share goes to Discover, less market share to VISA and MC. The more American visitors to China start doing this, the more VISA and MC will realize their DCC idea is hurting their business in China and it's market is being usurped away to the Discover-Union Pay-JCB alliance. Change comes through competition, I say.
i.e.
Card A (VISA or MC): gives you 3% in rewards at a certain restaurant in China, but likely to be auto-DCCed
Card B (Discover through Union Pay): gives you only 1% in rewards at that same restaurant but won't be subject to DCC
My view is similar to my stance with EMV: the 3% restaurant reward isn't worth the hassle arguing with a cashier, who may or may not have the authority to do it or something the terminal is auto-set to, who may or may not understand the same language as I do, with lots of irritated people behind me, so I'll just whip out a Discover Card if there's an Union Pay sign at that establishment.
More market share goes to Discover, less market share to VISA and MC. The more American visitors to China start doing this, the more VISA and MC will realize their DCC idea is hurting their business in China and it's market is being usurped away to the Discover-Union Pay-JCB alliance. Change comes through competition, I say.
Aug 31, 2014 | 5:24 am
#968
Moderator: Manufactured Spending
Join Date: Jul 2011
Posts: 6,707
On the contrary, I think it would be easier at Taco Bell in Missoula, because of cultural issues. Taco Bell in the US is likely to be staffed by minimum wage teenagers who don't have a clue and don't really care, and will probably swipe whatever you give them. When was the last time you had a cashier check the logo on the card before swiping? In Japan, society is more about following rules and maintaining order, and staff are better paid and more professional, so it will be harder to get them to "just try it".
Aug 31, 2014 | 10:47 am
#969
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,961
Nah. Cash earns nothing, Discover at least earns something!
If it's a three way race between choosing VISA/MC vs. Discover vs. cash, then the best option will still be Discover. Less hassle, no annual fee, no FTF, no DCC, and still earns something.
And for the Discover card that I have, between Jan-Mar, restaurants earn 5% cashback, so if I'm in Asia during that time, Discover actually becomes my preferred card at the restaurant in China.
If it's a three way race between choosing VISA/MC vs. Discover vs. cash, then the best option will still be Discover. Less hassle, no annual fee, no FTF, no DCC, and still earns something.
And for the Discover card that I have, between Jan-Mar, restaurants earn 5% cashback, so if I'm in Asia during that time, Discover actually becomes my preferred card at the restaurant in China.
We also have to recognize that circumstances may change, and there may be a point in the future when AmEx and Discover also bring the scourge of DCC to their networks. Even though right now using AmEx or Discover might be the path of least resistance, in the future it might not be the case.
I don't. And can even attest to it that even in places out in rural Japan, it took some convincing to let them run through my Discover Card via the JCB network. I was able to get by because I could actually speak Japanese, so I would imagine that it would be more difficult for an average American with a Discover card out in rural Japan.
For Discover and Union Pay however, Discover actually has this printable wallet card pdf that I can cut, fold, and laminate. Haven't had any trouble so far in China by just handing this pdf to them, which is a great plus for someone who can't speak Mandarin or Cantonese (but can sort of read the characters through kanji).
And no, I have no idea why Discover would have this printable wallet card for Union Pay but not for JCB. Thanks for putting into light of this, I'll send off a secure message to Discover if they can create a wallet card pdf for JCB merchants in Japan as well.
For Discover and Union Pay however, Discover actually has this printable wallet card pdf that I can cut, fold, and laminate. Haven't had any trouble so far in China by just handing this pdf to them, which is a great plus for someone who can't speak Mandarin or Cantonese (but can sort of read the characters through kanji).
And no, I have no idea why Discover would have this printable wallet card for Union Pay but not for JCB. Thanks for putting into light of this, I'll send off a secure message to Discover if they can create a wallet card pdf for JCB merchants in Japan as well.
On the contrary, I think it would be easier at Taco Bell in Missoula, because of cultural issues. Taco Bell in the US is likely to be staffed by minimum wage teenagers who don't have a clue and don't really care, and will probably swipe whatever you give them. When was the last time you had a cashier check the logo on the card before swiping? In Japan, society is more about following rules and maintaining order, and staff are better paid and more professional, so it will be harder to get them to "just try it".
I harbor no animosity toward the Mainland, but my other half has had no inclination to visit. The biggest issue for both of us is the hassle factor in obtaining the necessary documents - tibāozhng for her and an L Visa for me. We will be going for a wedding in June 2015, so I look forward to avoiding DCC there. ^
Aug 31, 2014 | 10:50 am
#970
Join Date: Nov 2012
Posts: 3,537
Yes, very true. Dairy Queen does reject one of @jamar's UnionPay cards though, not because it is UnionPay but because the terminal just won't take it (it says invalid card number or something like that). Only the one with a 19-digit or something number.
Aug 31, 2014 | 10:58 am
#971
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,961
Thanks for this thread! When I was offered to pay in usd in Scotland I knew what it was.
Data points:
Had one vendor tell me there are no fees for it and the rate is better than my card offers.
Had one vendor tell me the register is set that way and they can't change it.
I'm worried for Hong Kong but glad that bringing discover is an option.
Data points:
Had one vendor tell me there are no fees for it and the rate is better than my card offers.
Had one vendor tell me the register is set that way and they can't change it.
I'm worried for Hong Kong but glad that bringing discover is an option.
In the case of the first merchant, many of them feed you this garbage. There would be no additional fees on your card issuer's side if your card levied a currency exchange fee. However, most (all?) cards issued in the US have a foreign transaction fee rather than a currency exchange fee. This means that even if the transaction is denominated in USD, you will still get hit with a FTF if you card has one just because the purchase occurred outside of the US. Fortunately many good cards now have 0% FTF.
The rate for DCC usually a markup of 2-5%, and there have been few cases where the DCC rate has been cheaper than the bank's rate. Furthermore, going back to my previous point, if you're carrying a card with a 3% FTF, you're going to be paying anywhere from 5-8% when you add in the DCC and FTF.
Aug 31, 2014 | 11:06 am
#972
A FlyerTalk Posting Legend
Join Date: Dec 2000
Location: Shanghai
Posts: 46,317
I harbor no animosity toward the Mainland, but my other half has had no inclination to visit. The biggest issue for both of us is the hassle factor in obtaining the necessary documents - tibāozhng for her and an L Visa for me. We will be going for a wedding in June 2015, so I look forward to avoiding DCC there. ^
Aug 31, 2014 | 11:47 am
#973
Join Date: Mar 2014
Posts: 162
I'm glad this thread helped you on your trip. In the case of the second vendor, were you able to pay in GBP? If not, did you write "local option not offered" on the receipt before signing?
In the case of the first merchant, many of them feed you this garbage. There would be no additional fees on your card issuer's side if your card levied a currency exchange fee. However, most (all?) cards issued in the US have a foreign transaction fee rather than a currency exchange fee. This means that even if the transaction is denominated in USD, you will still get hit with a FTF if you card has one just because the purchase occurred outside of the US. Fortunately many good cards now have 0% FTF.
The rate for DCC usually a markup of 2-5%, and there have been few cases where the DCC rate has been cheaper than the bank's rate. Furthermore, going back to my previous point, if you're carrying a card with a 3% FTF, you're going to be paying anywhere from 5-8% when you add in the DCC and FTF.
In the case of the first merchant, many of them feed you this garbage. There would be no additional fees on your card issuer's side if your card levied a currency exchange fee. However, most (all?) cards issued in the US have a foreign transaction fee rather than a currency exchange fee. This means that even if the transaction is denominated in USD, you will still get hit with a FTF if you card has one just because the purchase occurred outside of the US. Fortunately many good cards now have 0% FTF.
The rate for DCC usually a markup of 2-5%, and there have been few cases where the DCC rate has been cheaper than the bank's rate. Furthermore, going back to my previous point, if you're carrying a card with a 3% FTF, you're going to be paying anywhere from 5-8% when you add in the DCC and FTF.
For the merchant that said it was set that way, I just paid in cash.
Aug 31, 2014 | 11:58 am
#974
Join Date: Jul 2006
Location: LAX
Programs: AA EXP 1.5MM, Asiana Club Silver, KE Morning Calm, Hyatt Platinum, Amtrak Select
Posts: 7,161
In terms of wages, Japanese minimum wage earners are paid about the same as their peers in the US; higher in the metropolitan areas (approx $10/hr or so) and lower in the rural areas (around to $7/hr).
So in terms of professionalism, it's not because they are better paid. It's more because of a culture where you're not supposed to question your superiors and you're supposed to follow rules. But these days, even that idea is also starting to crumble by the youth who make up the majority of minimum wage earners. "Why should we follow all these stupid rules and ideas, and overwork ourselves to the point of death when these black companies aren't paying us enough money?"
First world problems, same in the US, same in Japan.
Aug 31, 2014 | 1:22 pm
#975
Original Poster
Join Date: Jul 2009
Location: SJC
Programs: AA, AS, Marriott
Posts: 6,961
I'm glad you were able to avoid the scam. In the other cases, did you offer proactively to the cashier that you wanted to be charged in GBP, or did some merchants actually give you the choice? How much pushback did you get with except the one who said it would offer you a better rate/no fees?