Conversion from euros to dollars prior to charging card

It is a very unfavorable outcome for you- just tell them to charge you in Euros.

At least 50% of the time you use your credit card in Europe you are presented with this option
And always the default is conversion to dollars so you have to do an extra step to refuse the conversion
Very annoying and yes your credit card will give you a better conversion than you are being offered so always decline

I would ask them to quote the tour in Dollars now instead, then make the decision whether to use them. Your credit card company has no problem taking a charge in euros and doing the conversion to Dollars that day, usually at virtually no cost, their doing the conversion is redundant, and will be an "unknown" charge.

If they balk, move to another tour company.

This scam is usually called “dynamic currency conversion” and should always be declined.

In addition to this good advice, our host Rick will tell you the same thing: Just Say No:

https://www.ricksteves.com/travel-tips/money/chip-pin-cards

(page down to third subhead section)

Thanks all. You have verified my thoughts. It did seem strange and I was told there was no option to just charge the card in Euros - which is what is generally done for most of my European transactions - but if I used a business card or a European issued credit card this could be avoided.

Always have the charge processed in the local currency- in this case, euros. To do anything else is
going to cost you- first by the 3-5% currency conversion charge your bank is going to charge you on your credit card transaction, and second by the rip-off currency rate the tour company is going to give you.

An Italian tour company can NOT insist on charging you in anything but euros. Period.

You have to wonder what other surprises the tour company has in store for you. I think i would take my business elsewhere.

I agree with all the above. I have been presented with the option of being charged in dollars or euros. I always take euros.

I wouldn't trust any company that doesn't offer me the option.

I would not do business with that tour company. It is a preface of things to come.

To do anything else is going to cost you- first by the 3-5% currency conversion charge your bank is going to charge you on your credit card transaction, and second by the rip-off currency rate the tour company is going to give you.

Maybe a bit of clarification. There are actually a series of charges that your credit card may make, The card Network (Mastercard. Visa, AMEX) charges a currency conversion fee and a transaction fee, then your credit card issuer (Chase, Citibank, Capital One) may also charge a Foreign Transaction Fee.

When you accept DCC, you actually do avoid the charge by the network for Currency Conversion, the problem is, the Networks charge a fraction of a percent, the people offering to convert for you are asking any where from a few percent, to 5, or even 10%, who knows until you see their offer. (they do have to tell you what they will charge in Dollars).

The 3-5% your card issuer is charging you still applies, it has nothing really to do with conversion (they may claim that) but since the charge was made in a Foreign Country, it applies. In that case, there are lots of great "No FTF" cards out there, if you travel even infrequently, it is worth looking into.

Scam, scam, scam!

We had that in some hotels in Spain. Luckily I was with my parents when it happened as the front desk made it sound more convenient for them to be charged in dollars. I always just ask to be charged in local currency.

What they are trying to do is not legal:

In any case, you always have the right to say no and make the payment in the local currency.

https://europa.eu/youreurope/citizens/consumers/shopping/pricing-payments/index_en.htm

Has anyone ever done DCC just to see what the difference in charge was, and how much of a hit you took?

I have explained the reason not to use DCC to several people while traveling over the years, only to see many of them still taking the USD choice. Some people just think its simpler to think in "real money" (USD), even if the difference is not that big.

As this is a specific situation, it is worthy of responding with some specific guidance. Mostly likely the tour company will make some money off of this conversion. They can set the conversion rate, as the other responses have all indicated. And because this is a tour and not just a meal or gift, the cost to you could be quite high. Unlike typical DCC where you can just ask for the transaction to be in euro, the tour company is insisting that they will be doing this over your objections. That may actually be illegal as European laws often give you the right to decline DCC.

There are a few of things you can do. First, find out what the cost in euro is and what their cost in dollars will be. You'll have to do the conversions yourself to determine if they are adding a conversion fee or bad conversion rate to make some profit. You'll also have to factor in any conversion fee (foreign transaction fee) that your own bank might charge you (and which they likely would charge no matter if the charge is in dollars - it is still a foreign transaction to your bank). If you have a card that does not charge foreign transaction fees, then that helps simplify things. You could also ask the tour company what their conversion rate is and if they add any fees. But they might decline to answer or give you the run-around. And any answer you get from them should be in writing.

You can also check their online reviews and see if anyone has brought this up in the past. The average consumer is not all that aware of DCC and that it is a ripoff, but you might find others that have commented. You can also get a better awareness if this tour company has an excellent reputation or is a bit shady. If they have a great reputation, they are less likely to use the DCC as a ripoff to gouge you. It is possible, after all, that they are making the conversion at the standard conversion rate and not adding anything to their profit. In the end, you'll have to be the judge as to whether this company is respected and worthwhile or a company to avoid. This could be a red flag for other shady practices.

"Has anyone ever done DCC just to see what the difference in charge was, and how much of a hit you took?"

The difference can be calculated easily enough since they always tell you what it will cost in dollars, as opposed to the local currency. And it is never done at anything near market rate.. And this difference may be insignificant too you, but multiply it out by how many times it happens and it becomes a big money maker for the other side. For doing nothing but charging you for this privilege.

A concept like this was at the heart of" Superman 3" many years ago - Richard Pryor's character figured out a way for the fractional cents, as all the bill were rounded up to next cent, to go to his account rather than the agency collecting. And this cost the agency a huge amount of money and sent them after him.

It is all a matter of whether you wish to give away money to a faceless body that is doing nothing for this gain, other than ripping off consumers who cannot be bothered.

@stan - in Stratford Upon Avon a restaurant charged in dollars rather than pounds without asking. Fortunately the bill wasn’t much and not worth the time it would have taken to cancel the transaction and resubmit, but the difference was $1 more than if it would have been charged in pounds. While not much for that transaction I would hate to see how much the total would be per trip if every establishment, hotels, restaurants, venues, etc., used DCC.

I wouldn’t call it an actual scam since it is a legitimate, but using DCC does not favor being charged.

Most major credit card companies do not charge a conversion fee, my smaller bank Golden One dose but Chase and Citi don't. It's worth a phone call so you know what card to use and what card to leave home. J

I always decline DCC, but I've done some mental arithmetic on several occasions and seen excess charges in the range of 7%. I'm sure it varies a bit, but the reason the process is so front-and-center is that it means a lot of extra money for the business in question. Why settle for 1/2% if you can take people for 7%?

I, too, have been charged in dollars without consultation or even after I specified that I wanted to pay in the local currency. It has happened in Poland (2018), in Hungary (also 2018) and multiple times in Spain (2016). It's harder for them to pull that off now, because the customer usually has physical control of the card reader. (The problem in Poland was that the display on the card reader was in Polish--possibly no longer true.)

When someone imposes DCC on me, I dig in my heels and I do not give in. I insist that the transaction be reversed. It is not a pleasant experience; the employee will claim he/she doesn't know how to reverse the transaction, but of course they do. They figure they will wait you out--especially if you're checking out of a hotel and (they assume) heading for the train station or airport. I solve that little problem by clearing my hotel bill the night before. The risk of imposed-DCC in restaurants in countries where you'd expect to tip can be mitigated by planning to tip in cash (which restaurants/servers always prefer and sometimes insist on, anyway). If there's funny business related to the credit-card charge, you just don't leave a tip.

But as I said above, DCC being forced on travelers in restaurants, hotels and shops shouldn't be so much of a problem anymore because of the way card readers are handled now.

The bigger issue now is that so many travelers think it sounds like a great idea--including when they're withdrawing money from an ATM.