Broken Credit Machine Card Scam

Local people will generally use cash, not credit cards. It’s the same in Greece, Germany, Croatia and much of Europe.

Retailers and restaurants have to pay a commission for you using a credit card, hence many prefer cash. American Express charges more than other card providers. It’s not a scam, it’s just hitting their bottom line if you pay on credit. Most places I have visited where it’s cash only either state this on the menu or in the window.

I would never go to a restaurant anywhere without enough cash to pay for the meal, even if I was proposing to pay by card.

That's very true. Best not to assume you can use a card, and I don't think a restaurant has an obligation to affirmatively post that they don't. However (and not sure if this was the case in Porto) if they indicate to customers that they do take a card (most typically by posting its logo on their door or window) they should be ready to honor that. Sometimes they don't and it is annoying.

Before you sit down, ask if they accept credit cards and if their machine is working.

Cards are used less in some of Europe, are more expensive, and are usually on a debit rather than credit system, have very low limits, and no miles/kilometers/cents back or prizes to entice us, but my French card cost 50€ a year for a training wheels card. We have a lot of family in France that never use the one card they have. It's just different.

Its not a scam. More likely an unfounded assumption that what you are accustomed to at home is the same everywhere. There's a reason why you should always carry some local cash, and retailers/restaurants that don't take credit cards are a perfect example. Unlike the US, cash only is quite common in some other countries. If paying by CC is necessary for you, then I suggest that you ask before you are seated. Saves aggravation on both sides.

This doesn’t sound like a scam that they would prefer cash. We always pay cash for our meals at restaurants in Europe. And we try to pick the smaller family-owned ones that we can smell wonderful aromas as we enter.

Finding an ATM machine approximately every three days, and using a Capitol One ATM card for no fees makes it pretty easy.

I am sorry you had that bad experience! It should be really annoying!

But I must say I'm very surprised, as I work in Porto and eat out everyday, usually paying with credit card. I can remember that a few years ago VISA as out for a day and a half, so no Visa cards accepted. And American Express is not very common in non touristy places, but in the city center restaurants (and other shops) accept almost all cards.

Now, you may ask why I use my credit card so often. Well, working at city center, I don't like to have money with me (never more then 20 euros, usually less), because there are pickpockets in Porto. A lot of them!

I advise everyone to be very carefull with their belongings. If you are wearing a backpack, use it on one shoulder only, and under your arm. Even better if you use a belt with money, ID and important cards, and use just a few coins and one card in accessible places. Pickpockets are usually in buses, and near touristic atractions. The most common are a nice and young couple asking to take a pic with you, or just talking saying they are tourists too. No problem in trams and metro, usually. But for instance, the upper side of the bridge is a manancial of pickpockets.

My card costs me zero per year (it's a VISA card issued by a company named UNIBANCO), and has insurance in case I am robbed.

Again, I'm very sorry, Richard, that you had this bad experience, but again I must say it is the very first time I hear about this, and I'm very surprised. But you say you identify a pattern, so I'll pay more attention to things around me.

Helena

"I would never go to a restaurant anywhere without enough cash to pay for the meal, even if I was proposing to pay by card."

At least around home, I never carry enough cash with me to pay for a dinner in a restaurant. Overseas, I might have that much cash if I had just replenished my cash from an ATM.

To be a scam, it would somehow have to result in you paying more than you would have.

Not to quibble, but I am paying more for a service if I have to pay ATM, 15% fees. I believe someone can not accept credit cards, but they take your card and then say, our credit card machine is broken. I have traveled many places in Europe and I’ve never seen this deception before. Unfortunately, there are no low fee credit ATMs in Porto. Yes, I would use Capital one, but there are none within 50 miles.

Can you ask your hotel for help finding an ATM that doesn’t charge you? That’s incredible that there are no low-cost ATM machines. Perhaps Helena can return and give some help.

I’m sure you know to always request the Euro if given a choice between Euro and dollars on the screen. Let your bank do the exchange, not whatever the machine is offering. Last week a machine was charging $1.22 while my bank was charging $1.16. That’s a big difference. My credit union rate charges a flat $1 and 0%. The exchange is at $1.16 now. Maybe you need help finding the right ATM.

And people have posted about some restaurants in Italy always having broken card readers too.

In the United States, credit card companies discount to the merchant a part of what you pay on your account as an "interchange fee". Wikipedia says this averages 2% of the sale, but I doubt that number, because cards are advertising 2% back. Maybe they keep 2% after they give back 2%, because 4% is the number I have heard more often. Anyway, in my opinion, the whole CC fee is the big scam. That has to be added to the retail prices we all pay.

Even 2% is far, far more than it cost the CC company to process the charge.

The EU has recognized this scam, and limited the interchange fee for cards from EU banks to 0.2% for debit cards and 0.3% for credit cards. That's all European merchants have to pay in the EU; but they haven't limited what European merchants have to pay if they take US cards. It's not surprising that their credit cards machines become "broken" whenever Americans come in.

I've read that card companies rake in $30B dollars/year from interchange fee. I'm not sure if that is total, or per company (Visa, MC, Amex, etc). Even if it's only total for all of the companies, it means we are all giving the banks $100 a year, $400 for each family of four.

BTW, in this country, I try to pay everything by debit card. I understand that in this country the Feds have limited debit card interchange fees to something like 22¢/transaction.

If the credit card processor is truly not functioning, then the correct business practice would be to advise customers BEFORE they order that payment has to be in cash.

If it is sprung on the customer afterwards, and the only available source of cash is an ATM with outrageous fees, then feeling one has been scammed is understandable.

If the place has the signage that they take credit cards, then one should be able to expect they will take it for payment, unless informed otherwise before the transaction occurs.
If one goes somewhere and that does not have signage for credit cards then the onus is on the customer to ask if credit cards are accepted.

I am puzzled that OP had this happen more than once. After the first occurrence I know I would ask before ordering at a restaurant what form payment was accepted. ( the 'fool me once, shame on you; fool me twice, shame on me' principle)

Are you using the Capital One credit card to withdrawal cash from a ATM machine instead of a debit card? That might be why the 15% charge since I believe it would be considered a cash advance or something like that.

I had no issue finding Multibanco machines while in Porto, and used a no fee debit card. Very reasonable exchange rate.
Most places I paid with the credit card, but did run across a few places that were cash only.

If is is costing you 15% to withdraw cash from an ATM, then you are being scammed - but by your own bank and it is time to change banks. Your ATM withdrawal from a bank operated AtM should cost you as little as .4 of 1 percent, if you are using a card which does not charge you fees for ATM use. Ad that is essentially a serivce fee for stocking the machine. The withdrawal itself is at the inter-bank rate. Interestingly, credit card purchases won';t have this small mark-up and go at the exact rate. Unless of course you have fallen for "Dynamic Currency Charge" where the machine operator or business imposes its own exchange rate costing you money.

Bets said:

"Can you ask your hotel for help finding an ATM that doesn’t charge you? That’s incredible that there are no low-cost ATM machines. Perhaps Helena can return and give some help."

Yes, I can give some help. There are lots of ATM's in Porto, and allover Portugal, with no fee, or at least which fee is maximum 1,5%.

In Fact, there are no Capital One ATM's in Porto or within 50 miles. Or 500 miles. Or... (well, I don't know the distance in miles between Portugal and the UK, that I believe is the nearest place working with Capital One).

When you see an ATM with a big title "EURONEXT", don't use. They inform they are going to charge you 15%, and you have to agree with that, but you don't need to. Justo choose a regular ATM (that says ATM but not EURONEXT).

Everyday I take the metro to São Bento, and then walk to Ribeira. I pass at least 3 regular ATM's, those with no fees: at Rua Mousinho da Silveira, right side of the street (in front of Starbucks), same street a few meters after, and another at Rua de São João.

Concerning payments with credit cards at restaurants, if they have the symbol of, for instance, VISA, they must accept the payment with a Visa credit card. It's mandatory. Anyone can complain to Visa if suspects is being scamed. VISA can confirm if in fact there was a problem with the machine, or the conectiosn. If there was not, then they aply a fine. A big one.

In Portugal we are big fans of cards. We use them for everything: buying a theatre ticket, buying a train ticket, paying taxes, making transfers, parking the car, paying tolls, etc.

If you have a VISA card, (only works with VISA) you can even use your card to pay your metro ticket without going to the machine and buying the "andante" (the card used to move in public transport). When you enter the metro system, just aproach your VISA card, and that's it. You don't need to face lines to buy the "andante", and find out how to charge it, etc. Just use your credit card. So far, it is only working for line E (the one from and to airport) and BUS 500. It charges you 2€, and you have a time limit of 1H15m.

Hope this helps. If someone needs further information, I'm at your disposal.

Helena

On our 2019 trip in Lisbon, we were also told the credit card machine was broken just as we tried to pay with a card. We didn’t think much of it until later when it did cross my mind that cash was preferred to avoid the credit card fees. It’s like other cultural differences when traveling to adapt to but glad Lee explained the fee differences. While perfectly understandable since restaurants do not want to lose business to competitors displaying and accepting cards, it would be helpful to know in advance cash is preferred, as I even thought then what if we didn’t have enough since we try not to carry large cash amounts and didn’t have an ATM card! Would the machine suddenly become operable?

Helena,
Thank you for kind, thoughtful, and informative responses. I am glad to hear your well informed information. Although I am leaving Porto after 6 days here I may return better informed. Porto has a lot to offer a visitor. My hope in posting my complaint was to make visitors aware of these issues which detract from their travels.

Best,
Richard

The first time we went to Barcelona, we were not aware that many restaurants did not accept credit cards. So we left all our cash in the safe in our hotel room! I had to take a taxi to the hotel to retrieve the cash while my husband and daughter chatted with the restaurant owner and kept eating tapas. Oh well, live and learn. I now carry some cash with me.

What Helena said........

In two visits to Portugal including Lisbon, Sentra and Porto, we never had that problem. Small restaurants clearly stated they did not take credit cards and and we respected them and were prepared to pay cash.
Portugal is very card friendly. Except for American Express and I don't blame them in that case.

We are going back (COVID allowing) in June and have every expectation to using our Visa care extensively. Based on your experience, I may enquire as to the credit card machine prior to seating, but in most cases, if they have a Visa sign on the door, I will expect them to honor it. Should they not, I will not hesitate to tell them I will return the next day to pay my bill in cash after going to a Multibaco ATM and informing Visa of the problem
Dennis and Elinore

Cannot edit what I wrote before, the "bad" ATM's are EURONET, not Euronext (my apologies to the stock excjange!).

Sorry to all members for the mistake.

Today I noticed that one of the ATM's I mentioned is orange and says ATM Express. So I'm not so sure if it is a "good" or "bad" ATM (it's the one at Rua de São João). But today, on my way to work, I found another one in Ribeira, Rua do Infante, a "good" one, that says just Multibanco, it's grey and blue. The "good" ATM's are grey (they are metal not painted) and blue letters.

A place that has a sign of accepting cards, atracting customers with it, and then saying the machine is broken, is owned by what in Portugal we call "chico-espertos" or "esperteza saloia", this has no translation but means stupid people trying to be clever than the others.