ATM or credit card- pay in USD or local currency

I also noticed a lot more of this on my trip last summer than I ever noticed before over at least annual trips for the past 20 years. I love your comment about getting out your glasses! Especially for people who have been going to Europe for years and just expect charges will be in euros you need to really check each time now.

It does seem to be spreading and varies a bit by country. It was extremely common in Spain 3 years ago, and I'm prepared to be extra vigilant when I return to Spain next month. It didn't seem to be as common in Eastern France last October.

It's called Dynamic Currency Conversion (aka "DCC"), and is presented as a "convenience". It is a scourge and essentially a legal scam, and a potential costly one for you (really terrible conversion rates) and a lucrative one for those charging you the fees (I assume they are split between the merchant you are patronizing, and the system that does this to you, as that gives both an incentive to slip this past you).

This has now spread widely across Europe (I believe I've also read of visiting Canadians encountering it in the US). I've seen it everywhere in Prague, and increasingly elsewhere. Expect it to pop up on your next trip to Europe.

As the OP suggested, you really need to be watching for this, since it presents itself innocently and in subtle ways (especially if the screen you are looking at is in a language you do not understand). I ran into one case in a small Vietnamese fast food restaurant in Prague where I was never offered the choice - the card reader just forced me to pay in dollars, and the only evidence I had was the printed receipt that said something along the lines of "I have chosen to pay in US dollars and have been charged a fee for this convenience" in microscopic print. I protested that no, I had NOT chosen to do that, was not ever given a choice...the young staff at the restaurant professed total ignorance, said they had no idea what I was talking about, etc. The charge was tiny in this case (two bowls of Pho) so I grumbled and let it go (although it steamed me). If that happened on a hotel bill, it could mean real money.

Caveat emptor.

I have had the same problem David described, multiple times in Spain, once in Hungary and at least once in Poland--and probably on other occasions I've since forgotten. DCC was really, really prevalent in Poland last year, and I have no doubt that within another year or two it will show up about 90% of the time when credit cards are used, as well as at almost all ATMs. I get really, really pushy when someone pulls that fast one on me, and I do not accept "I don't know how to cancel the transaction" as an answer. When you push back, you can expect a rather unpleasant encounter, but I think it's important to push back to help future travelers.

I have learned always to settle my hotel bill the night before departure so I can deal with any DCC funny business when I have time. A traveler is a sitting duck if he's paying his hotel bill in the morning on the way to the train station and standing at the desk looking at his watch. It's easy for the desk clerk to outwait a departing traveler who's in a hurry.

We have the ability to avoid most if not all cases of unwanted DCC. I think as Americans we are used to simply handing over our credit cards and waiting for the charge slip to be handed back to us. That allows the server/cashier to push a bunch of buttons to select US Dollars rather than the local currency. It's not supposed to work that way. We are supposed to keep hold of our card, looking at the screen all the time. If we do that, we are the person making the selection. I am still working on the "hold onto the card" business myself.

Poland is a real challenge, because the software in at least some of those devices knows you're from the US but is incapable (apparently) of displaying the instructions in English. The Polish instructions were totally incomprehensible to me. There was no arrow labeled "USD" or "$", pointing to a button on the device, so how was I supposed to know which button to choose? I ran into some servers who professed not to know, either--which might or might not be true. I have no idea how confusing the instructions may be in Polish.

What I've been trying to remember to do (not totally successfully) is pay the (usually small) tip in cash rather than by adding it to the credit card charge (which is sometimes but not always possible in Europe). That way, I get to see whether the server has somehow switched the currency despite my request to pay in euros, zloty, etc. If he or she has decided to ignore my request, there's no tip. So far I've been able to outwait restaurant personnel trying to take advantage of the poor dumb American and gotten the offending transaction canceled and reprocessed, but if I'm ever in a hurry, I figure not tipping will help make up for what I've lost on the bad conversion rate--which seems to vary between 3.5% and 7%.

Hi, this is interesting! I think that happened to me in Paris this past Xmas holiday! I just happened to go to an atm I used before on a previous trip (At home I bank with Bank of the West affiliated with BNP Paribas group) I used their bank. right away it showed an exchange rate which was way more than it should of been. Decline or accept!! It didn’t even ask me usd or euro! I thought I had done something wrong so accepted then I withdrew more money in Rouen at bnp same story. Going to Paris again in April I’ll see what happens then & be more aware & read the whole thing maybe I missed something!!

Last summer when my husband and I were in Poland and Ukraine, we used our credit card quite a bit, in restaurants and for any larger purchases we made. Since I had read about DCC on this forum, before I even handed over my card, I said that I wanted to pay in zloty or hryvni. This turned out to be especially important in Poland, where I used the tap option frequently. Anyway, I guess we were lucky, because we only had one instance (in Poland) where a restaurant tried to charge us in CAD, even after I told them zloty. But the OP and acraven are right, you need to keep your eyes on that screen and your card, don't rush, and be adamant that you want to pay in local currency. And honestly, if a server in a restaurant told me they didn't know how to change the currency on the device, I would ask them to find someone who did. I really dislike being taken advantage of!

Where i work this started appearing on our machine 3 years ago, we didnt request it and we cant get it removed. None of the charge comes to us. And no i cant change the currency, but i always say 'I advise you to pay in sterling' to our overseas visitors. This is purely the Banks.

My gut call is that the devices default automatically, due to detecting a US credit card, and has nothing to do with the wait staff or cashier in majority of cases. The ski area we were at in Switzerland had European tourists, not Americans. But I wonder if EU residents are asked to pay in EUR or CH.
I like the idea of stating the currency at the beginning of the payment process.

We order from Amazon.UK and IT. While checking out, there is a section that says “credit card currency USD”. Or a place to change credit car currency. Unless you click the “why” link, you might think yes, USD. But it’s asking which currency to pay in.

Karen, I've never seen a terminal that didn't allow the option to pay in the local currency. The problem is that the customer needs to be the one making the selection, and the instructions on the terminal need to clear enough that he knows which button to press in order to get what he wants.

I have heard payment in euros being offered as an option to Eurozone travelers (or perhaps it was UK travelers being offered the GB pound option) in at least one country on a different currency (I think it was at a museum in Poland). It was all I could do to suppress the urge to interrupt and say "Don't do it!" Not wanting to cause an international incident, I kept my mouth shut.

My gut call is that the devices default automatically, due to detecting a US credit card, and has nothing to do with the wait staff or cashier in majority of cases.

Correct, the first few digits of your card number identify the issuing bank. It then assumes your account currency is the same as the country the bank is in, correct 99% of the time.

The ski area we were at in Switzerland had European tourists, not Americans. But I wonder if EU residents are asked to pay in EUR or CH.

Yes, it isn't targetted at US-Americans only. I have a UK-issued card, when I use it in Switzerland or Germany it tries to charge me in GBP. I have never had any problem refusing DCC. I have read European cards used in the USA also get hit by DCC.
I always check the amount before entering my PIN (or signing, but I haven't done that in a long time), and just refuse to pay if the amount doesn't match the bill. With chip-and-PIN the amount (including currency) is always shown on the terminal, with a message "enter PIN".

Also wait until the transaction is complete to avoid any key presses afterwards. DCC is even possible now on contactless transactions this way.

It is not only US cards that get hit with DCC. ALL cards are "offered" to be charged in the currency of the country where the card is issued if you are in a different country when DCC is used by a merchant.

The card machines are smart enough to default to the customer's currency by design. In most cases the employee is telling you the truth when they say they don't know how to get around it. And yes, there is a way to bypass the DCC and charge every customer in the local currency. The owners of the shops using DCC just don't want their employees to know how because they are making somewhat significant amount of extra income.

The merchant usually gets 60% of the mark up in exchange rate. The card processor gets the other 40%. It is not seen at the time of the transaction, but is combined into the monthly bill each merchant gets from their card processor. The card processor is not Visa or MasterCard directly, but another company in line that handles all of the details for a merchant that is not large enough to connect directly, which are most merchants that are not nation wide chains with hundreds of locations.

I hate DCC. It is the worst thing Visa and MasterCard ever decided to allow. While it is nice for the merchants as it allows them to recover some of the excessive fees they get charged for accepting credit cards, it is not nice because it makes foreign customers feel prices are higher in that country than they really are.

I would say just pay cash, but when ATMs are using DCC as well, it is just a tricky situation you have to be careful to avoid.

Most places where you would use a credit card; restaurants, hotels, attractions, shops, have a handheld device to insert your chip credit card. Seems these little devices sense you have a CC from the US and defaults to USD.

At least with respect to France, I'll agree with the earlier statement about ATMs, but I've almost never encountered DCC with credit cards in France. My last trip there was last April. I'll see if it's changed this April.

It is the worst thing Visa and MasterCard ever decided to allow.

It was more forced onto them as in many countries they were judged to be operating a cartel on card processing against the consumers' interests (yes, I know …).

No DCC on Amex though ...

I've noticed more machines offering the "service" of letting you pay in USD. I think it's driven by banks trying to make more than just their merchant fees on your transaction. It allows them to hit you with an additional currency transaction that will profit them and cost you. This shouldn't be legal and probably won't be eventually.

In the meantime, watch for it and always pay in the local currency, decline the offer to pay in USD.

This trend seems to be increasing in many places in Europe. When checking out of a hotel in Switzerland, the clerk selected the "home currency" option before passing the POS terminal to me to enter a PIN. I was in a hurry to catch a train and wasn't paying attention, so ended up paying the extra charges. I'll be more observant in future!

That's the way it works, Ken. We have to develop the habit of not letting the card out of our hands. Make them give us the terminal. And don't wait till the morning of departure to pay your hotel bill.