Beware - credit card rip-off

Olivers wrote:
Outside the 3rd World and big chunks of the developed Middle East, I
suspect the day of the small currency exchanges and small money traders
may be almost gone.

Bizarrely, I still see huge clumps of people at exchange booths in airports
everywhere - even Americans in the DEPARTURE section of US airports, where
it makes the least sense - so it seems like they might have a little wind
yet left in their sails.

miguel
--
Hit The Road! Photos and tales from around the world: http://travel.u.nu

You suppose that some underpaid sales associate in the U.S. has *any*
control over the POS ( Point Of Sale, NOT Piece Of S**t ;-) )system their
employer uses? Geez, give me a break. If you have a problem, notify the
store management or corporate entity ( if there is one ). It is not
reasonable to expect a clerk to "ask you which currency you want to be bill
in", because they often times have *no control* over the transaction
processing ( speaking from first-hand experience ).

LH

"Andy Pandy" wrote in
message ...
There is a new "facility" you may encounter when paying by credit card in
a
foreign currency. The POS terminal identifies which country your credit
card is
from and conveniently converts the local currency into your home currency.
Your
credit card is then billed in your home currency rather than the local
currency.

Might sound helpful, but the catch is that the exchange rate at which the
conversion is done is almost certainly a lot worse than your bank would
use if
you got billed in the local currency. The retailer usually gets a cut of
the
exchange rate markup so it's in their interest to bill you in your home
currency.

They are supposed to ask you which currency you want to billed in, but it
practice it doesn't always happen, and the default is to bill you in your
home
currency. But you are perfectly entitled to insist you are billed in the
local
currency, after all the product or service will have been priced in the
local
currency. Don't let retailers rip you off in this way!

--
Andy

On Tue, 20 Apr 2004 23:06:31 GMT, Miguel Cruz wrote:

Phil Richards wrote:
Alec said...
If they still put through the transaction in the card's billing currency,
refuse to sign the slip and ask them to void it.

Could prove difficult when paying for goods after you've used or consumed
them - e.g. restaurant or hotel bills.

Seems to me you consumed goods based on the price they represented, then
suddenly at payment time they decided they wanted to change the price. I'd
guess you'd be within your rights to stand firm on the price they initially
told you you'd have to pay, sans unwanted double-conversion markup.

Exactly. Its not much different than if you were paying by cash. If
the bill came and they asked you to pay in some currency other than
the local one the menu prices were quoted in, you would be entitled to
refuse.

Alec wrote:

"Andy Pandy" wrote in
message ...
There is a new "facility" you may encounter when paying by credit card in
a
foreign currency. The POS terminal identifies which country your credit
card is
from and conveniently converts the local currency into your home currency.
Your
credit card is then billed in your home currency rather than the local
currency.

Might sound helpful, but the catch is that the exchange rate at which the
conversion is done is almost certainly a lot worse than your bank would
use if
you got billed in the local currency. The retailer usually gets a cut of
the
exchange rate markup so it's in their interest to bill you in your home
currency.

They are supposed to ask you which currency you want to billed in, but it
practice it doesn't always happen, and the default is to bill you in your
home
currency. But you are perfectly entitled to insist you are billed in the
local
currency, after all the product or service will have been priced in the
local
currency. Don't let retailers rip you off in this way!

It's called 'Dynamic Currency Conversion' in the trade-speak. It's touted
among retailers and service providers (hotels, car rental firms etc) doing a
lot of business with foreign visitors, and also on-line dealers. The card
processors entice them with 'customer satisfaction' and 'extra income
stream' (i.e. sharing exchange mark-up).
First developed by the Irish firm Forexco, it's now offered globally and
adopted by leading retailers like Harrods and international hotel groups. I
now make the point of insisting before my card is swiped that I want to be
charged in the local currency. Visa/Plus and Mastercard/Cirrus regulations
stipulate that customer must be given a choice. If they still put through
the transaction in the card's billing currency, refuse to sign the slip and
ask them to void it. If they still refuse, tell them you'll ask your card
issuer for a chargeback. Expect a dirty look or take your customs elsewhere.

Alec

That all sounds VERY strange. At least in the past the credit card
companies ONLY allowed local currency billing. One guy I know went to
South America and a guy in his hotel (who did not know the rules) were
so horny for USD that he persuaded the guest to pay the hotel bill in
USD via credit card.

When coming back home to Europe he was very surprised to get a
withdrawal of only a few EUR - why?

The credit card company do not allow other than local billing, thus he
paid in local currency and not USD. Cheap! the rate was about 100:1 or
so.

Wonder if this temporary hotel guy had to pay?

/Anders


--
Remove the obvious part before replying by mail please!

That all sounds VERY strange. At least in the past the credit card
companies ONLY allowed local currency billing. One guy I know went to
South America and a guy in his hotel (who did not know the rules) were
so horny for USD that he persuaded the guest to pay the hotel bill in
USD via credit card.

When coming back home to Europe he was very surprised to get a
withdrawal of only a few EUR - why?

The credit card company do not allow other than local billing, thus he
paid in local currency and not USD. Cheap! the rate was about 100:1 or
so.

Wonder if this temporary hotel guy had to pay?

Well in the past no one else did foreign exchange conversion other than
Visa/Mastercard and your card issuer. But as the former started making a lot
of profit out of it, by tacking on 2-3% conversion fee (1% by Visa/Master
and the rest by card issuer, usually hidden in the rates used so not always
obvious to cardholder), someone said. 'Hey, can't we get a slice of this
lucrative market by doing the conversion upfront and keeping the transaction
entirely in the card's billing currency?' Once they comply with Visa/Master
rules by giving customers a 'choice' of billing currency, then the operation
is entirely legitimate.
For some cardholders, it must be said that they are no worse off as DCC
rates are pretty in line with what they would get by traditional method as
they are charged by card issuers (and might welcome the 'transparency' of
knowing exactly how much it costs), but for others who hold a card with no
foreign exchange fees (like Nationwide in UK and some credit unions in US),
the loss can be as much as 3-3.5%.

Alec

On Wed, 21 Apr 2004 10:38:27 +0200, Nisse PowerMan
wrote:

That all sounds VERY strange. At least in the past the credit card
companies ONLY allowed local currency billing.

That certainly can't be true everywhere. I recently purchased an item
in the Philippines which was priced and charged to my credit card in
USD.

This is how the transaction appeared on my account, so it can be done.

16 February 2004 DUTY FREE PHILIPPINES - SPMKT PARANAQUE PH
45.98US DOLLAR at 1.88597210. £24.38

Chris Blunt wrote:

On Wed, 21 Apr 2004 10:38:27 +0200, Nisse PowerMan
wrote:

That all sounds VERY strange. At least in the past the credit card
companies ONLY allowed local currency billing.

That certainly can't be true everywhere. I recently purchased an item
in the Philippines which was priced and charged to my credit card in
USD.

This is how the transaction appeared on my account, so it can be done.

16 February 2004 DUTY FREE PHILIPPINES - SPMKT PARANAQUE PH
45.98US DOLLAR at 1.88597210. £24.38


Hmmmmmmmmm, that looks like Duty Free Shop? Right? They mostly charge
ONLY in USD so that could be ok.

But what about regular shopping?

Last time (Jan-04) I visited Thailand ALL shopping on my MasterCard was
charged in local currency. (Strangely enough I got the BEST exchange
rate from this card and not from bank or exchange offices!)

/Anders


--
Remove the obvious part before replying by mail please!

"Olivers" wrote in message
...
Given the amounts involved in individual CC transactions, the exchange
rates which I have seen for about eleventy dozen times better than the
"cash" exchange rates provided by either the two banks I worked for and as
good as many of the commercial transcation rates available to traders and
large coorporations. CCs have litereally revolutionized foreign exchange,
with debit/ATM cards following to change even further the "Bad Old Days".

At least with cash there is the excuse that there are costs involved with
storing, handling and transporting foreign currency. There's virtually no cost
in doing an electronic conversion from one currency to another, yet these
rip-off merchants want about 3% or more.

--
Andy

"Lester Higgins" wrote in message
ink.net...
You suppose that some underpaid sales associate in the U.S. has *any*
control over the POS ( Point Of Sale, NOT Piece Of S**t ;-) )system their
employer uses? Geez, give me a break. If you have a problem, notify the
store management or corporate entity ( if there is one ). It is not
reasonable to expect a clerk to "ask you which currency you want to be bill
in", because they often times have *no control* over the transaction
processing ( speaking from first-hand experience ).

If I stay in a hotel in Ireland that advertises they accept VISA and I have been
quoted 100 EUR a night, then I will pay 100 EUR a night. I won't pay 70 GBP a
night or 120 USD or anything else. The POS terminal *must* offer the option of
payment in local currency.

I think in restaurants if I ever get the local currency converted without my
consent, I'll just accept it without a fuss but I'll consider the exchange rate
markup as their tip. A lot less than the 10% (or 15-20% in the US) I usually
leave, but if they try it on in this way they don't deserve a tip.

--
Andy

On Wed, 21 Apr 2004 19:01:02 +0100 Andy Pandy
said...

If I stay in a hotel in Ireland that advertises they accept VISA and I have been
quoted 100 EUR a night, then I will pay 100 EUR a night. I won't pay 70 GBP a
night or 120 USD or anything else. The POS terminal *must* offer the option of
payment in local currency.

I'm sure the POS terminal would offer the option of payment, the issue
seems to be with the retailer or whoever. Possibly poor awareness or
training, more than likely they can't be bothered to offer knowing if
they get questioned "What difference does it make?" they'll end up
charging in local currency as it is financially better for the customer.

It seems to be the way is to be one step ahead of the retailer and ask
whether they apply DCC before handing your card over. If the answer is
"yes" or "don't know" then make it clear your requirements. The more
customers become aware of this and raise it then more then hopefully
retailers will be a little more forthcoming.

--
Phil Richards
London