Is this “convenience” just another scam?

dollar wrapI’m almost never accused of being too neutral, but when I covered a type of foreign currency exchange that affects international travelers recently, that’s exactly what happened.

I was writing about a little trick called a dynamic currency conversion (DCC), which works something like this: If you’re paying by credit card overseas, a merchant will sometimes ask if you want to make the purchase in dollars, “for your convenience.” If you agree, your money is converted from the native currency into greenbacks and sent to your credit card, but at an awful exchange rate. Bizarrely, you may still have to pay your credit card a fee for a foreign transaction — so you basically convert the money twice.

Colleagues excoriated me for failing to call DCC what it was: a scam.

I try not to throw around the “s” word too much. In my line of work, everyone expects it. But then I heard from Scott Niskach, a sales manager for a Salt Lake City-based computer company and a world traveler.

“Love your balanced approach,” he said.


He attached two hotel receipts for recent stays in India, both at major hotels run by western companies.

“Both times, DCC was declined and clearly written on the receipts,” he says.

But that didn’t seem to matter. The hotels converted his bill anyway.

Lies, lies everywhere

How much money did the hotels make by using DCC?

At one property, his bill came to $663 with dynamic conversion. Using his credit card, he would have only paid only $630. At the other, his dynamically-converted bill came to $206. It should have been $194.

“Between the two hotel stays I saved $44 by refusing the DCC,” he says.

Only, he didn’t, at least not initially. Niskach had to ask his credit card to fix the exchange rate, and he prevailed in the dispute because he had photos of the receipt, which clearly stated he’d been charged in rupees.

“My guess is a lot of travelers are sucked into the DCC without ever knowing – some hotels ask, others just impose the charge and say it’s being helpful to you, the traveler,” he says. “I doubt things will change anytime soon, as this is an easy profit for hotels.”

There’s so much lyin’ going on here, it’s easy to lose track. Merchants are supposed to ask you if you want to do a DCC, and the only reason you might want to is that you’re curious how much your hotel bill will cost in dollars. (If you are, may I suggest a calculator?)

But Niskach apparently wasn’t even offered a choice between DCC and rupees; he had to tell the hotel clerk that he wanted to pay in the Indian currency. Although it agreed to do so and gave him a receipt to that effect, the hotel’s accounting systems did a DCC anyway in the back office, he says.

Pulling back the curtain on DCC

Here’s what’s going on behind the scenes: Another company is handling the transaction and sharing a portion of it with the merchant. “Best of all, [we’ll] rebate a share of the conversion fee to you, generating additional revenue for your business,” one company claims. “The more international business you do, the more you improve your bottom line.”

But is that a scam?

It is dishonest, and a violation of your credit card’s merchant agreement, if you aren’t asked if you want DCC before you pay. But it is — let’s call it what it is now — a scam if they convert your purchase anyway and force you to take up the matter with your credit card company.

The moral of this story? Always ask to pay in the native currency and keep receipts for everything you buy. You may need them later.

Is "dynamic" currency conversion a scam?

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Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or contact him at Got a question or comment? You can post it on the new forum.

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  • Fly, Icarus, Fly

    Good to know always to have everything charged in local currency!

  • backprop

    DCC per se, I guess, isn’t a scam. Some of your readers noted, for example, that they actually don’t mind paying for the convenience to see the bill in USD (or whatever their home currency is) for purposes of charging an expense account. This surprised me, but to each his own.

    Of course, what happened to the OP was – getting charged for a service that you did not ask for. That’s pretty much the definition of a scam.

  • BillCCC

    The scam in this story was having DCC used when the traveler refused it.

  • AUSSIEtraveller

    it’s an American thing.
    Many Americans for some reason think they are the centre of the universe (which they are not) & that the US dollar should be accepted everywhere which it is not.
    When in Rome …

  • Mel65

    Exactly…when in Rome pay in the local currency…. You’ve obviously misunderstood the point of the story. The traveler/OP expressly did NOT want to pay in dollars, but the hotels converted the local currency to dollars and did it anyway. Nice attempt to make it all about those “self-centered ugly Americans wanting their dollar to be king” but in this case you’re wrong.

  • Alan Gore

    The scam part of it is getting DCC when you explicitly opted out.

  • mytimetotravel

    As best I remember I said it was a scam the last time you asked.

    Definition of “scam” – “a fraudulent business scheme” – definition of “fraud” – “a deliberate deception for unfair or unlawful gain” (Merriam Webster). DCC may not be unlawful but it is certainly unfair. It is an attempt to make money from the unwary, the careless and the ignorant. And even from the canny and careful if they can get away with it as your latest post shows.

  • Cam

    I guess it isn’t a scam, as such, but it is a very big rip-off.

  • emanon256

    I voted yes, but with pause. It isn’t always a scam, but it usually is.

    I had the same problem as the OP in a hotel in Germany. I booked in Euro, I asked to be charged in Euro, and my receipt was in Euro. The hotel then charged me in USD and the exchange rate was a joke! The hotel made $30 extra off of me. I disputed it, and the hotel disputed my dispute, and they had some form I signed at check in authorizing them to charge my card and convert the currency themselves. I completely missed that one, I thought I was confirming the rate and agreeing to pay for in-room charges, I didn’t see the 4pt font at the bottom that they enlarged before sending in. And due to my negligence, I lost the dispute. I won’t make that mistake again.

    On the other hand, I have found that some stores seem to prefer to negotiate, and in some cases, they will negotiate in USD. In those cases, I often feel like I have come out ahead. Also, after negotiating a price in USD, some stores suddenly seem reluctant to have me pay in USD by credit card, they often say they want cash or want to convert it back to their local currency first. I tell them I don’t have cash (Which is true, I carry as little as possible), and when they convert it back, they seem to want to use a different rate, so I stick to my guns and make them honor the rate we negotiate and charge me in USD, or I leave.

    One time I was really interested in a hat, and would not pay more than $10 for it. The shop keeper would not go below $20. He was very stubborn. When I left, a local approached me and told me that shop keeper does not like tourists, and said he would get me the hat for $10. He went in, and came out soon after with the hat. I gave him $10, and the shop keeper was peeking out and saw us and started yelling that I owe him $10 more dollars and even chased us a bit until kits started grabbing his wares and he had to go back and stop them. It was quite a funny situation.

  • Casa Mariposa Panama

    The OP in this case was scammed, because he refused the DCC option but the hotel did it anyway. After he sorted this out with the credit card company, he should have reported the deceitful actions of the local hotel to the home office (I believe you mentioned it was a western hotel chain).

    Not that the OP should try to seek compensation from the home office, but he should make them aware of the potentially fraudulent activities of the hotel in India. Only by making the bosses accountable will this type of behavior be curtailed (hopefully).

  • Byron Cooper

    One way to avoid the DCC is to use American Express, when possible. They do not allow DCC and insist on using local currency. Their Platinum cards and above do not charge for international conversion. I was in Mexico this year and insisted on using local currency. Some Visa and Master Card accounts waive the international conversion, but do not forbid the DCC.

  • emanon256

    I think @AUSSIEtraveller:disqus is trying to show that businesses in other countries do this because many Americans go there demanding to pay in USD, and get upset when the local business don’t take USD. So business decided to use this to their advantage, and charge US Tourists in USD as they want, and make extra money on it. It is a scam in my opinion, and informed travelers know better, and the OP in the story did get scammed. But I completely agree with Aussie’s point, and am quite embarrassed by plenty of my fellow Americans.

    I have yet to go to another country where I don’t, on several occasions, see American tourists make statements like:

    “Do you speak American?”

    “I only have American dollars?”

    “You must take American dollars! Good Money!”

    And they just keep repeating them selves and getting louder.
    The worst is in Mexico when they say:

    “I do not speak Mexican, do you speak American?”

  • Joe_D_Messina

    Nobody in the article was being an ugly American, nobody was demanding to pay in dollars instead of the foreign currency, there wasn’t anything about language barriers…. You’ve both worked incredibly hard to make this about something it absolutely wasn’t about.

  • LeeAnneClark

    I voted that that yes, DCC is a scam, because I believe in most cases it is…but I must add the caveat that there are some exceptions in which it’s not. I just recently returned from Costa Rica, where the Colon hovers around 500 – 1 USD. Most hotels frequented by Americans will not only charge in USD, but publish their rates in USD, and they publish and charge a consistent 1-500 conversion…even when the fluctuations make this not in their favor, which was actually the case while I was there. It’s since shifted the other way, but only by a tiny percentage, so it all evens out in the end for all of us.

    I just wanted to make it clear that in Costa Rica, because of the unique money situation there, DCC is not a scam at all. The other interesting thing that I found in Costa Rica, which I don’t see all that many other places, is that they will usually tell you right up front that if you pay in cash (either Colones or USD) they will knock 5% off the bill. I found this to be a very fair option. I could pay for the convenience of using my credit card, or I could take the chance of carrying all that cash and save money. I went for the cash option, and saved a nice piece of change.

    Of course using your credit card may cost you more than you expect – as Christopher correctly points out, some credit card companies charge a “foreign exchange fee” even if you pay in USD, just because the charge came from another country! THAT is another HUGE scam. There is no foreign exchange when you pay in USD – it costs the credit card company nothing. It’s a fee for nothing…100% profit, for nothing.

    I always use my Capitol One card when out of the country, because they charge no fx fee – not even when you purchase in the foreign currency.

    As for the experience of Mr. Niskach, that is the DCC scam in all its glory. It’s a good reminder that it’s incumbent on us travelers to be educated about how to conduct business in other countries. Another gotcha of shopkeepers, especially where the local currency is in huge denominations (e.g. Bali, where 1 USD = about 10,000 IDR)…they will try to confuse you with the denominations. My mother once almost paid $100 (in IDR) for a $10 bag…she was confused by the number of zeros, and the shopkeeper pretended to be confused as well. I caught on to what he was doing, and there is no doubt in my mind he knew exactly what was happening, and would happily have accepted her overpayment. We ended up walking out. I don’t give money to scammers.

  • EdB

    So true. And it’s not just the Americans with that problem. I worked at a “tourist” business and I saw that same type of behavior from every nationality.

  • emanon256

    I’m not talking about the particular instance in the article, I am talking about what I think one of the reason’s is behind the problem in the article. The majority of Chris’s readers, and many other people are good stewards of diplomacy during world travel. But sadly, many of the other American’s I see while traveling are an embarrassment to our country due to acting overly entitled and overly demanding.

  • Christina Conte

    Not only do I keep the charge in local currency, but I use Capital One Visa which does not charge ANY fees for international use, they even waive Visa’s fee! I wouldn’t travel without it.

  • ExplorationTravMag

    Why do you have to make it an “Us vs. Them” thing? Sometimes, Americans want to see it in American dollars because they want to know how much they’re really spending. There’s no conspiracy. There’s no, “We hate everyone who’s not us”.

  • Joe_D_Messina

    I share your general sentiment, but still not seeing any true connection here. They’re ripping all Americans off because some have treated them badly in the past? The article’s main example was a single traveler getting scammed by separate hotels. That sounds like an institutional decision to boost revenue by a few bucks per stay by doing the conversion as a matter of habit. I doubt nationality has anything to do with it at all. And the dollar is such a staple of world currency, of course there are going to be people wanting to be charged in dollars if that is at all possible.

  • EdB

    “I am talking about what I think one of the reason’s is behind the problem in the article.”

    The reason behind the problem in the story is corporate greed. Nothing more. Trying to squeeze what ever amount of money they can from the guests. I might be more inclined to agree with the ugly American theory if it was the front desk person, the person who would have to deal with the ugly American, who did it. But in this case, it was the people in the back who tried to scam the OP.

  • bodega3

    DCC isn’t a scam, but when you decline using it and the store/hotel/restaurant still puts your charge through with it, that certainly is as someone is going to make something off it at the card holder’s expense.
    I am sure this option came up as many travelers want to make a purchase using their home currency. You see this all over the world in prices that are listed in more than one currency. Any currency, other than the local one, is marked up but many just don’t pay attention to that as they just get excited not having to ‘deal with’ currency they don’t know. In the years I have spent selling travel, I have had my share of clients ask if they can use USD instead of dealing with exchanging their currency.

  • gratianus

    Currency conversion is a mystery to many travelers. Some credit cards do not charge you anything when you charge purchases outside the U.S. but most do. Some ATM cards do not charge you anything for withdrawals in foreign currencies but most do (to say nothing of the local bank’s ATM charges). These currency conversion fees are grossly out of proportion to the banks’ real costs and, though entirely legal, are an abuse. And don’t get me talking about those kiosks at airports that provide foreign exchange. Here, despite the advertisements that the service is “commission free,” the exchange rates more than make up for “free” exchange, since they are far off the real exchange rates. I encountered a DCC transaction only once on a recent trip in western Europe (Dublin), I declined since I knew my card (Chase Sapphire) would provide an honest exchange rate. I wasn’t sure the DCC transaction would be as fair.

  • pauletteb

    I have to say that your regularly antagonistic attitude is a complete 180 from anyone I’ve met in Australia.

  • pauletteb

    But these are the same travelers who behave atrociously anytime they travel more than 50 miles from their home in THIS country. They don’t save their bad manners for the occasional trip across a border.

  • Andrea

    That’s why we always pay our hotels, restaurants, gas in local currency, then the question never comes up.

  • emanon256

    Its not that they are ripping American’s off because they have treated them badly. Its that they get so many demands to pay in USD, that they came up with a way to charge in USD, but at the same time use it to make extra profit. I totally disagree with using it to make a profit, but I think that’s why they started offering it, and it hurts us, and savvy people are aware of it and don’t like it.

    Its similar to baggage fees with airlines. Enough people said that they want to pay less since they don’t check bags. So the airlines started un-bundling bags, and took it way to far by un-bundling almost everything, and turned it into extra profit.

  • Adam_The_Man

    My kind of story!! Total Scam!! Thanks fro exposing these scammers!!

  • AXW

    A related point:
    if anything important is charged in a foreign country – especially India – make a photocopy of the receipt immediately, a good clear one. Receipts are often printed with what amounts to “disappearing ink!!!” a week, or a month after the transaction you’ll have just
    a blank piece of paper in hand!

  • Asiansm Dan

    It depends on your bank fee policies. It happens often to me I opted for the DCC in Switzerland and France and it’s the exact amount in $CDN I see on the spot exchanged on the day rate, And this amount is the amount on the credit card bill. I did verify and it’s the same exchanged rate with other merchants the same day who didn’t offer DCC. My banks and Amex did charge a small pct on the exchange transaction about 1pct but it’s the regular practice for longtime already. So I don’t see any scam here. May be American Banks has more leeway to determine the extra charge. May be it’s something new less than 1 year than I didn’t know.

  • Ann

    Thanks for your stories on this. While it may not be considered a scam, many people are not told the difference and why they should leave the charges in the native currency of the country they travel in. Very good information here.

  • jpp42

    But the credit card bill will show the amount in your home currency when you are reconciling the charges for your expense account… that’s a pretty lame excuse.

  • jpp42

    A quick snapshot with your mobile phone may be more convenient than a photocopy. If you have a smartphone, there are many popular apps out there which will organize your receipt photos.

  • y_p_w

    Actually a lot of thermal print paper can be sensitive. I’ve put some in my pocket and a combination if sweat and heat caused the paper to stain and/or the print fade. Some inks are fairly faint and a few minutes in the sun and they can’t be photocopied. Even laser printed receipts can have toner stick to the next page or to vinyl.

  • Daddydo

    This brings up the point that Scott did save his receipts and did pay attention to the bill. Excellent. Scott did everything by the book and should be satisfied. The chargebacks will cost the hotel minor fees and inconvenience in balancing. Again, good, they deserve it for not paying attention. Always be aware of your charges both when paid and when they come onto your bill.

    When dealing in foreign currency also be careful of what you are signing! My client purchases 460 peso shorts, about $46.00 US and signed for 4600 peso. He signed the receipt! $460.00 came onto his bill. Non-fixable.

  • Mike Nash

    Why do you say “ouch” after complimented you with “Love your balanced approach”. That seems like an odd response????

  • Bill___A

    You’re totally missing the point. They try to force the DCC on you so they can make an extra profit, even if you know what it is and tell them not to. In the old days, they didn’t even have this and it went fine.
    I’m not American, never ask people if they speak “American” and don’t ever go anywhere without local currency and I run into it all of the time.
    Of course, I am in the United States right now and the hotel is ripping people off without DCC – local calls, $2.50, bottle of cola, $3.75, gratuity 20% (1/5 of it to the hotel). Chris’s home state should be called the “rip off” state.

  • BMG4ME

    Use a credit card that has not foreign transaction fees, and pay in the currency of the country you are in. It’s always cheaper to do it that way, I know because I have compared what I was offered with what I ended up being billed when I did not accept the billing in dollars.

  • Brian

    My parents had their first encounter with DCC in Taiwan, Hong Kong, and Macau with the latter two as the worst. I was with them in Taiwan and when it occurred I kept telling my parents to decline it and no merchant dared to sneak it in on the receipt. However, when it came to Hong Kong and Macau; I had to return home due to my work. In those spots, the merchants kept on using DCC repeatedly on my parents and several succeeded even though my parents wanted the transaction in local currency. The worst one was when they bought two Rolex watches, which costed about $ 7,000 each. The merchant used DCC once more and when I found out about it; it was too late. My parents felt bad and lashed out at the merchant for scamming them. The merchant “apologized” but defended DCC by providing all of the usual BS excuses such as: it prevents foreign conversion fees – Yeah Right! From then on, I always check the receipt before me or one of my family members sign. Last time I encountered DCC was in New Zealand; in tourist areas.