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Site is Defending Dynamic Currency Conversion

Site is Defending Dynamic Currency Conversion

Old Jul 26th, 2006, 03:35 PM
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Site is Defending Dynamic Currency Conversion

This site is defending dynamic currency conversion: http://www.travelfinances.com/blog/

Until now Ive always been trying to avoid it and tell sellers I am NOT interested when they ask. Is this true? Right below that a Fodor's person says to avoid it.
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Old Jul 26th, 2006, 04:10 PM
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Several times in the interview, the CEO claims the rates they use are "comparable" to the rates the bank would charge....

That is the lie and what makes this a scam....in my experience when merchants use the dcc scam, the rate is 5% above the interbank rate...visa and mastercard charge 1% above interbank...my prime foreign credit card is Capital One which eats the 1% so if I use DCC in my case, I throw away 5% on every dcc charge...

Now if you are dumb enough to use the credit cards of the near criminal banks that add an additional 2% (2.5% in the case of Chase), then I suppose the rates are comparable...but you still do slightly better having your bank do the conversion rather than falling for this scam.

What this CEO did not reply to or whatever is what happens when some person who understands why this is a scam insists on being charged in local currency, which is his right, and the merchant lies with the lies we have spoken about...(you know your currency rate is just an estimate the charge is actually in local transactions, visa requires this, the laws of my country require this (often in the Caribean), the terminal does it automatically and I cannot override it (one of the big lies)...yada yada yada.

I'm sorry, I'm still not convienced. I still feel it is a scam and will now allow any merchant to pull this garbage on me.
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Old Jul 26th, 2006, 04:23 PM
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I had DCC pulled on me on two small purchases in Italy. I was using a credit card that only passes on the 1% Mastercard fee and no additional 2 or 3% "bank fee".

The exchange rate on the DCC transactions was much worse than the rate I got on other transactions that same day that were charged to my card in the local currency.

Incidentally I was not given a choice /b/ local currency or DCC. The merchant tried to slip it by me, then claimed he could not do a refund and recharge it... it was such a small amount that I just gave him a lecture and left. It wasn't worth a huge yelling match to me, as the total cost of the DCC-sham "exchange rate" to me was less than 4€.
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Old Jul 26th, 2006, 04:34 PM
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Of course the rates are "comparable." You can compare any two things. It just happens to turn out the the dynamic conversion currency rates compare poorly; but they are comparable.
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Old Jul 26th, 2006, 04:43 PM
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You don't have to eat it.

Rather than "give them a lecture and leave," write LOCAL CURRENCY NOT OFFERED above your signature, and dispute the charge when your statement comes.

The card issuer will back-charge the merchant for the spurious charges, and your account will be credited. This is because the card networks' operating rules require merchants to offer a choice.

It is certainly not in the interest of the merchant to resist, because they will be back-charged no matter what they say to you - and their funds will be suspended while the reversal is in process.

And by the way: DO NOT settle the bill in cash just to get it over with. This gives the merchant a reason to keep charging DCC, because if you pay in cash, he doesn't have to pay his merchant bank's discount fees. In many cases, these are as much as 3-4% (depending on his monthly volume and average ticket size).
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Old Jul 26th, 2006, 05:08 PM
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Hi Robes,

This happened in early 2005 before the problem was being discussed very much on the boards. I now know to write on the receipt if it happens again, but fortunately it appears this scourge has not yet afflicted Greece where we vacationed this year.
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Old Jul 26th, 2006, 05:24 PM
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Good news about Greece! We're headed there soon!
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Old Jul 26th, 2006, 06:29 PM
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You seem to be not listening.

It doesn't matter whether DCC is prevalent in Greece, Lichtenstein, or Tannu Tuva. Just make the notation on your charge slip, and dispute the item when your statement comes. Problem solved.
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Old Jul 26th, 2006, 07:12 PM
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Yes, I love that meaningless but obviously misleading statement, "rates are comparable". One can easily compare 1% to 87%. Those two rates are comparable!
 
Old Jul 26th, 2006, 07:29 PM
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I first encountered it a few years ago in London at Harrodís and WAS asked if I preferred it charged in GBP or Canadian Dollars. Making the quick assumption that Al Fayed would hardly be seeking ways to improve MY financial health over HIS financial health, I chose CAD$.

I discussed the issue with my banker husband upon my return, who raged about this outrageous scam and advised me not to EVER accept being charged in a foreign currency Ė the banks are aware of the issue and have lots of proof that this is not a good thing to do! He said I would be better off using my cash card at a local ATM and paying in cash.

Last week in Dublin, every time I used my VISA, I was offered the option, except at the hotel (a Hilton). This prompted me to REQUEST the charge in $CAD rather than Euros. She was surprised, as she was prepared to charge in Euros. I insisted, she had difficulty, but eventually (and helpfully) sorted it out for me.

It proved to me that you now have to ASSUME they might, and have the right to, and always INSIST on the alternative.

In other words, if they don't mention it, they may very well be doing it to you.

Regards Ger
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Old Jul 26th, 2006, 07:47 PM
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Hi Ger, maybe the triple digit heat here is frying my brain but am I understanding you to say that your husband who is a banker advised you to have the credit card bills when you are in Europe printed up in Candian dollars versus the Euro?

I have been under the impression, that when in Europe one should make sure that their credit card bills be billed in Euros otherwise one is going to lose money so to speak. At least regarding European merchants running through credit card bills for US citizens in US dollars rather than in Euros.
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Old Jul 26th, 2006, 08:04 PM
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Maybe I missed something here. The site says:

# Is offered at an overall conversion cost that is comparable to that of credit card issuers; and
# Through Planet Paymentís FX Assured product, guarantees consumers that the conversion rate they pay is better than the effective rate charged by that the customerís credit card provider.

Shouldn't he just say that the rate is better? Still 'comperable' doesn't sound bad at all.
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Old Jul 26th, 2006, 08:11 PM
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...he is a liar....the rate on dcc scam transactions is nowhere near what you get from the credit card company...
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Old Jul 26th, 2006, 10:51 PM
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This is a classic problem with using qualitative words to describe quantitative matters; each side interpreting in their favor but in the end only one side profits.

What does "right around the market rate" or "about the same" mean? There is no numerical definitions for any of these terms. One can say 8% is about the same as 1% and can argue that there is no lie or inaccuracies.

Also what does it mean to say that the "conversation rate will be better?" "Better" is a great feel-good word that can be used to extract more profits out of unsuspecting buyers. Is large conversion rate better?
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Old Jul 27th, 2006, 01:24 AM
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Yes, Greg, I agree...it is often called "marketing."
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Old Jul 27th, 2006, 01:42 AM
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Interesting article from last year about DCC. Apparently it was "started" by rental car companies.

http://tinyurl.com/e3lcg
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Old Jul 27th, 2006, 02:04 AM
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I'm lost too.
A while ago, an Irish B and B owner was very upset on this very forum because she was accused of dynamic currency conversion.
Her machine had charged an American in dollars and she didn't know how to charge in Euros.
Now we get a Canadian who is charged in Euros, again in Ireland and who demands to be charged in their local currency.
No wonder the poor woman was surprised.
No doubt she had up to then had Americans demanding gently and politely to be charged in Euros rather than dollars.
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Old Jul 27th, 2006, 05:01 AM
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Dear Ger,

Either you misheard, or your banker husband has to do a little research, or your banker husband is making money on DCC.

If DCC offered the customer an advantage, how would Planet Payment make a profit? They claim to be sharing the same fee with the banks.

Why would the banks reduce their profits to help Planet Payment?

As noted, everything is "comparable".

Take a look at the so-called guarantee:
"...Best Rate Guarantee Ė our promise to refund 150% of the cost difference if the customerís credit card provider would have charged a lower effective rate for the same transaction,..."

Unless you were to make two transactions, one with and one without DCC, at the same time for the same amount, how in the world could you determine if your CC provider would have given you a lower effective rate?

Just what is an "effective" rate?

It is just another way to separate tourists from their money.

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Old Jul 27th, 2006, 06:53 AM
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To those who still don't think "comparable" sounds bad:

You can compare the square footage in a one room log cabin to the sqaure footage in a five story mansion.

You can compare a Volkswagen Beetle to an Astin Martin.

You can compare apples to oranges.

Comparison has nothing to do with two things being the same. It only means you can compare them. OK?
 
Old Jul 27th, 2006, 08:18 AM
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First, the site travelfinances is not defending DCC, only affording a DCC proponent (an executive of Planet Payment) a chance to reply to criticisms of DCC.

Planet Payment pitches its DCC services to merchants, not consumers. Anyone with a bit of common sense will quickly realize that adding a small percentage for the merchant, without reducing the percentages that the card-issuing banks already take on each transaction, can only mean added cost for the consumer.

I recently received a notice (tiny, tiny print, of course) from one of my credit card issuers that said foreign transaction fees apply to all transactions that take place outside the U.S. It did NOT limit the fee to transactions in foreign currencies.
I guess DCC eliminates the standard V/MC 1% conversion fee, but that's no benefit to the consumer if DCC gives the merchant 3% or more. Merchant's percentage plus card-issuer's percentage could exceed 6% -- no thanks!
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