Make sure you know what ATM machine you are using

How do you know the dollar cost of the exchange? Are you using dynamic conversion?

If the machine were using DCC and a worse exchange rate by processing it in their form of dollars, it would have been required to tell you before you accepted the transaction. Even the Travelex machines are required to tell you and give you the opportunity to decline DCC.

However, 500 Euro for $720 means that the cost per Euro was $1.44. It appears that $720 is about what 500GBP cost. And since this machine was in London, it seems likely that you received GBP. Even Travelex and their DCC do not mark up the exchange rate by over 25%.

Although Travelex is a money exchange company, getting cash from their ATM is merely accessing your own account through the interbank networks. Verified by our own trials of this at Heathrow last year.

And since this machine was in London, it seems likely that you
received GBP.

Sounds like it to me too, Larry. As England isn't on the Euro, it wouldn't have been my choice to get $$ if going immediately on to Milan. But evidently a choice of currency was possible or Vanessa would have ended up with 500GBP which would have been of no use to her in Italy?

Since the machine was in the U.K., it is possible that you paid both to exchange euro into pounds and then again to exchange pounds into dollars. Most of the people using the machine at Heathrow would be British, and so only pay for one conversion.

I did receive euros. It gave me the option of which currency I wanted. I accept responsibility for not paying enough attention and accepting the transaction without reading it carefully. I posted this as a warning for others to be careful.

Ah, maybe double conversion was the culprit.
Good warning, Vanessa.

You know the cost of the conversion by looking at your online banking statement to see how much was charged to you.

Most banks in the US offer online banking with transaction alerts that can be either emailed or sent to your phone as an instant message. Getting cash out of an ATM is one of the alert options at my bank. So as soon as I do the withdrawal, I get an IM showing my the USD equivalent. No Dynamic Currency Conversion required.

I always look for a machine with bank, banc, banco... in the name and avoid anything with ex (for exchange) in the name.

The other rule that, as far as I can tell, always applies is don't have the machine convert the charge to dollars. If/when you are given the option, pick local currency. If you choose dollars, or any currency other than local, you might as well have used an exchange machine. This is also true at hotels, restaurants, ticket windows and car rentals - always opt for local currency.

Here the main issue was withdrawing in a currency foreign to the country it was located in. This puts you at the mercy of the conversion rate of the machine. Normally this is displayed on the splash screen before you insert your card - and would be the rate from sterling.

The ones operated by Raphaels' bank (the ones mentioned as scattered around the London Underground) generally have better rates but only in comparison with walk-up foreign exchange rates in a bureau de change: not the online purchase rate.

Vanessa, I am sorry for your expensive mistake but I appreciate you posting this as a warning for others. For my part, I did not realize that ATM machines could be money exchange instead of a bank. Other than looking for a version of "bank" in the name, are there any others ways to tell? I am also happy to read about selecting the "local currency" option; any more tips for using ATMs? Thanks -

There are machines at some UK airports that allow you to decline their own rate and in effect do a straight conversion at Visa/Mastercard between the currency of your account and whatever foreign currency it is stocked with (Euros/US Dollars usually). These are operated by Moneycorp but they left Heathrow a few months ago. They are still at Stansted and Gatwick. Not sure whether this is a deliberate or accidental feature.