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]
Sep 14, 2014 | 7:41 am
#1036
Join Date: Feb 2013
Location: Irvine CA & PEK
Programs: Hyatt Globalist, Marriott Titanium, Hilton Diamond, IHG Spire Ambassador, Qantas Platinum, United S
Posts: 664
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.
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.
BoC Slip
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?
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?
Sep 14, 2014 | 7:57 am
#1037
A FlyerTalk Posting Legend
Join Date: Dec 2000
Location: Shanghai
Posts: 46,534
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...
Sep 14, 2014 | 8:57 am
#1038
Join Date: Feb 2013
Location: Irvine CA & PEK
Programs: Hyatt Globalist, Marriott Titanium, Hilton Diamond, IHG Spire Ambassador, Qantas Platinum, United S
Posts: 664
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).
That's why I think the market in Shanghai and surrounding areas do business better than in the North...
Sep 14, 2014 | 11:24 am
#1039
Join Date: Jan 2008
Location: Rio de Janeiro, Miami
Programs: Marriott Lifetime Titanium, AA EXP and others
Posts: 4,749
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...
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...
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.
Sep 14, 2014 | 11:30 am
#1040
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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.
Ignorance is bliss, as they say.
Sep 14, 2014 | 7:36 pm
#1041
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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.
Ignorance is bliss, as they say.
All I would care about is a Visa/MC DCC compliant choice when doing the transaction. In some locations, China being the worst offender, the DCC scam happens automatically. I wouldn't really care if merchants prey on ignorant tourists. However, I would still continue my educational campaign against DCC. Of course the merchants love DCC. It's an easy way to skim off between 3-5% (typical DCC markup rates) on top of whatever profit you're making on the transaction. Depending on what your card fees are, it's possible for them to recoup those by accepting an international card. Processors push DCC onto merchants as an additional revenue stream for the business, sometimes unknowingly. I would say the worst offenders here are the payment processors in revenue sharing agreements with the merchants because they bear no responsibility when things go south and the merchant gets stuck with the headache of a chargeback.
However, for every unsuspecting merchant who may have inadvertently turned on DCC, there are many merchants are super guilty in the DCC scam. We've read reports here where cashiers/proprietors of shops have said, "Great choice!" when a customer has accepted DCC. Yeah... great choice for the business! Other times the merchant has said, "No choice." when a customer is requesting local currency. This is why I don't like banks issuing courtesy credits to accounts since the merchant continues to get away with the scam.
Probably the worst offenders in all of this are ignorant tourists who refuse to be educated. The only effective means of education is letting them know they got ripped off big time, especially if they were using a card with a 3% FTF. "Did you know you just paid an 8% tourist tax on that purchase?" It's one downside of using plastic. You wouldn't tolerate it if the merchant did a bait and switch on the price or shortchanged you if you paid cash, but there's a disconnect when people use a credit card. If the number of tourists who cared about DCC reached critical mass, I think merchants would either a) put a stop to the practice completely or b) at the very least allow customers a clear and conscientious choice in whether or not to accept DCC.
The bottom line is that DCC should be an opt-in service. As it stands today, it's mostly an opt-out situation, and some places don't even give you the ability to opt out.
Sep 14, 2014 | 9:03 pm
#1042
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I have limited experience with debit cards in HK, but when I used one for deposit in Australia I saw A$100 line item in my Australian bank online banking as I've withdrawn it, but the transaction description marks it as a an authorisation. The line is no longer shown 6 days later.
Sep 14, 2014 | 9:13 pm
#1043
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In most merchants I came across in Korea, and at least in El Cortes Ingles in Madrid, my signatures (HK is still Chip and Sign for the time being until HKMA decides otherwise) are collected by signature pad.
To my surprise, even HK has this. This is in the Coach Shop run by DFS inside the departure area, I don't usually shop there but I was accompanying someone who did:
I took pic of it because it of the FX margin disclosure "FX Margin includes 3.95%"
We didn't test the DCC function as neither of us had our non-HKD cards on us. But with pads like this, you lose the ability to signify any non-compliance in writing.
Sep 14, 2014 | 10:22 pm
#1044
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I would say in these cases that it's more favorable to the consumer in the case of a chargeback, however. While you can scribble your intentions like you can with a paper receipt, it's harder to prove that you were given a choice as a customer with a non-compliant POS setup like this. Is there any indication that you'll get hit with DCC before you sign? If the register is showing USD, for instance, I might sign as "LOCAL OPTION NOT OFFERED
"I don't know about on their systems, but the ones I've seen in the US sometimes don't give any visibility to the cashier what the person is signing on the digital pad. In fact, a friend of mine from Europe visited the US for the first time in 2006 and was so infatuated with the signature pads that he started drawing cartoons or signing his name as "John Smith". Of course, in the US, pretty much nobody ever checks signatures for a credit card purchase, so perhaps such a charade wouldn't hold up overseas.
Sep 14, 2014 | 10:53 pm
#1045
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Majuki: well yes I can sign a protest in the signature pad, tho I have to be pretty neat about the handwriting.
I think I have to still need to sign alongside the statement. Imagine this happened in the harrods case (DCC selected by cashier, no void in hkd, but a pad is used to collect my signature instead of an integrated sales invoice-card slip) - the British are strict about checking signatures on chip and sign cards. If I didn't sign the pad the cashier will take away the goods and initiate a refund (in GBP) - so I have to scribble my statement on the pad, sign it and photo it (HK banks put proof of burden on cardholder) before the cashier clears the pad from her cashier-side input - Urrrggghhh
I think I have to still need to sign alongside the statement. Imagine this happened in the harrods case (DCC selected by cashier, no void in hkd, but a pad is used to collect my signature instead of an integrated sales invoice-card slip) - the British are strict about checking signatures on chip and sign cards. If I didn't sign the pad the cashier will take away the goods and initiate a refund (in GBP) - so I have to scribble my statement on the pad, sign it and photo it (HK banks put proof of burden on cardholder) before the cashier clears the pad from her cashier-side input - Urrrggghhh
Sep 15, 2014 | 12:47 am
#1046
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Majuki: well yes I can sign a protest in the signature pad, tho I have to be pretty neat about the handwriting.
I think I have to still need to sign alongside the statement. Imagine this happened in the harrods case (DCC selected by cashier, no void in hkd, but a pad is used to collect my signature instead of an integrated sales invoice-card slip) - the British are strict about checking signatures on chip and sign cards. If I didn't sign the pad the cashier will take away the goods and initiate a refund (in GBP) - so I have to scribble my statement on the pad, sign it and photo it (HK banks put proof of burden on cardholder) before the cashier clears the pad from her cashier-side input - Urrrggghhh
I think I have to still need to sign alongside the statement. Imagine this happened in the harrods case (DCC selected by cashier, no void in hkd, but a pad is used to collect my signature instead of an integrated sales invoice-card slip) - the British are strict about checking signatures on chip and sign cards. If I didn't sign the pad the cashier will take away the goods and initiate a refund (in GBP) - so I have to scribble my statement on the pad, sign it and photo it (HK banks put proof of burden on cardholder) before the cashier clears the pad from her cashier-side input - Urrrggghhh
I guess my question was the signature pad/POS terminal displaying HKD or GBP when you were signing? Did you know you were signing for a DCC purchase?
Sep 15, 2014 | 2:27 am
#1047
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I'm not sure how prevalent. But I know a void button is not required by Visa/MC standards.
In the case of Harrods the transaction was already finalised in HKD before I can do anything. Currency selection was made by the cashier.
Sep 15, 2014 | 2:46 am
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If the transaction was finalized and you knew you were hit with DCC before you could sign, couldn't you theoretically sign "UNAUTHORIZED TRANSACTION"? How would the merchant respond in the case of a chargeback? I guess we're too dependent on friendly, customer-centric service in the US.
Sep 15, 2014 | 2:49 am
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If the transaction was finalized and you knew you were hit with DCC before you could sign, couldn't you theoretically sign "UNAUTHORIZED TRANSACTION"? How would the merchant respond in the case of a chargeback? I guess we're too dependent on friendly, customer-centric service in the US.
Sep 15, 2014 | 4:27 am
#1050
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If the transaction was finalized and you knew you were hit with DCC before you could sign, couldn't you theoretically sign "UNAUTHORIZED TRANSACTION"? How would the merchant respond in the case of a chargeback? I guess we're too dependent on friendly, customer-centric service in the US.