Dynamic Currency Conversion

[JimGant]

On Feb 7th, the wife used the new Rimping Supermarket for the first time. Usually, we use the two older stores -- and never have had a problem with the Dynamic Currency Conversion (DCC) scam. In fact, looking at the credit card slips, the two older stores don't even have the DCC option. (See the following post if DCC doesn't ring a bell.)

But I hadn't briefed the wife on DCC, and when she checked out of the new Rimping, they used DCC, instantly converting to dollars. The dollar amount was posted on the slip, along with the conversion rate and Thai baht amount. But they never asked if she wanted 'Thai baht or foreign currency,' as Visa and MC say they're supposed to. And even tho' the wife knew there was something a little different about the credit slip, she signed anyway, as, I suspect, would many folks have done if not fully aware of DCC.

Result. She paid over 7% more than she would have if she had been given -- and used -- the option for Thai baht!!! (The exchange rate they used: 32.573. The Interbank Exchange rate used by MasterCared that day: 34.90.)

Interestingly, on the credit slip, next to the signature, it says: "I have chosen not to use the MasterCard currency conversion process and agree that I will have no recourse against MasterCard concerning the currency conversion." Ah, now an ironclad screwjob, as before this was added apparently some disenchanted customers had gone after MasterCard for their 'overpayments.' Now, door shut.

The same day I bought a Nok Air ticket at the airport, using my MasterCard. The credit slip I signed had no dollars mentioned, but the signature line had the following: "I have choosen (sic) not to pay in USD but to settle the payment in THB." This statement, which I confirmed later, means the particular merchant *has* the DCC option, but the option was not used, either because the customer requested Thai baht only, or because (as in the Nok Air case) the merchant automatically gave the better deal to the customer.

Home Pro in CM will automatically use DCC -- unless you insist on Thai baht only. I had to get a supervisor to drive the point home with a particular cashier, but have had no problems since. A cashier even explained about how 'button 1' is for Thai baht only,' while 'button 2' is foreign currency. And that management 'would like us to use button 2.' I bet they would....!!

I have subsequently talked to a supervisor at the new Rimping, and she assures me the cashiers have been briefed about the customer's right to insist on Thai baht only. But I haven't been back to check it out. Would really be nice if the stores would do what they're supposed to and ask up front: "Thai baht or foreign currency?" Easier than having to void a slip that comes out in dollars and asks me to waive my rights.

So far, the 3 merchants mentioned above are the only ones I know of using DCC -- but I'm sure there are many others out there -- or will be. But so far I personally know that Carrefour, Robinson's, and Global don't -- or at least didn't as of January.

[JimGant]

A note on dynamic currency conversion

Many merchants overseas have the ability to convert your purchase to the currency of the card's country of issue for you before charging it to your credit card. If a merchant offers this "service," you should almost always decline it, since the rates of conversion used are frequently much worse than any fees you'd incur for having the charge run in the local currency. Examples of rates up to 6.5% worse than those subsequently charged by the card company have been seen.

Some merchants (particularly higher end restaurants and merchants in more-developed parts of Asia and Europe) may even convert your purchase without asking you. Always check your receipt, and if you see anything involving your home currency in a country that doesn't use that currency, ask the merchant to re-do the transaction in the local currency. In some cases, the merchant may claim that their credit card terminal automatically does the conversion, but Visa/MC merchant agreements generally require the merchant to offer transactions in local currency.

Visa's spokeswoman has been quoted in the media saying that Visa "requires the merchant to disclose the fee and must provide the consumer with a choice" of getting the bill in dollars or the local currency.

Note that this can also happen when the billing currency of the card is the same as the country where the card is being used. For example, a UK-issued EUR-denominated card is automatically charged in GBP when DCC is applied by a merchant in the Eurozone. There is a electronic identifier on each card showing the country of issue (as opposed to the card's billing currency) and it is this identifier that DCC uses.

[meadish_sweetball]

On Feb 7th, the wife used the new Rimping Supermarket for the first time. Usually, we use the two older stores ....

Thanks a lot for the info - I for one found it very interesting as I was not aware of this, and I am sure many other people will also find it useful.

[p1p]

Thanks a lot for the info - I for one found it very interesting as I was not aware of this, and I am sure many other people will also find it useful.

Yes, I second these words of gratitude. I have locally issued and foreign cards. I think I'll keep my local banks topped up a bit more and use the local cards exclusively from now on.

[up-country_sinclair]

thanks for the info jim.

[xbusman]

For the last year, this scam has been found in more and more "legitimate" establishments. I have responded by simply canceling the transaction and walking. One month ago I left over 30,000 bahts of goods on the counter of Home Pro Fashion Island and walked away after getting my cancellation. It was almost 10% below the rate my bank would have given me, thats a 3000 baht upcharge for using visa.

Last week I was at Power Central at Fortune IT when it came out in dollars. I read it carefully about "you have the right to choose" and insisted on Thai baht. They fluttered around about ten minutes, rolled some eyes and poof.... the same charge in Thai baht.

We need to let folks know about this...

[ricklev]

Saint Louis Hospital pulled this scam on me. I couldn't help but think how despicable it was for a Catholic hospital to knowingly rip someone off at a stressful and difficult time. (Or anyone, anytime, for that matter!)

[Maejo Man]

There is nothing new in DCC in Thailand, and major establishments have been cashing in on it for a considerable time now. I got fed up with it some years ago, and applied for a Thai Amex card.....Problem solved.

[paulbrun]

Yes, excellent topic. I have both local and foriegn credit cards, and occasionally use either. I haven't looked very closely, but I am pretty sure that they have always charged me in Thai baht..? Last time I checked the rate that was used to convert to Thai baht, on my UK credit card, it was in fact very favourable..! By the way Jim, did you work as a DD, once upon a time..?

[JimGant]

There is nothing new in DCC in Thailand, and major establishments have been cashing in on it for a considerable time now

Right. I wasn't trying to reinvent the wheel, as this subject has been recently discussed elsewhere on this forum. (See: This and That

However, by specifically using the CM forum section, I was trying to give a 'heads up' on the local flavor of this scam. Hopefully, others will warn of their entanglements with CM merchants who are using DCC. Sorry to be repetitive for those aleady in the know.

By the way Jim, did you work as a DD, once upon a time..?

Uh, dunno... What in the world is a "DD?"

[chanchao]

So, correct me if I'm wrong, but what you describe sounds more like "Yet Another Way by Credit Card Companies to Shaft Their Customers" than anything Rimping or Home Pro would knowingly try to pull on their customers. (Question:) As such is the topic title in the title misleading? Shouldn't it be something like 'More stuff to be aware of when using foreign credit cards'. (Subtitle: "Yet another chapter in the Book of Horrors that is the Credit Card Business Model" ?

Generally speaking when it comes to exchange rates, isn't the best way to get the best rate a large transfer at the right time, or a maximum ATM withdrawal from an overseas bank that respects it's customers enough to not charge the sun and the moon for that (there exist one or two), and then into a Thai account with a Thai ATM/Visa/Visa-Electron card attached to it?

[JimGant]

So, correct me if I'm wrong, but what you describe sounds more like "Yet Another Way by Credit Card Companies to Shaft Their Customers" than anything Rimping or Home Pro would knowingly try to pull on their customers. (Question:) As such is the topic title in the title misleading?

No, it's a definitive shaft by Rimping and Home Pro. And Bangkok Bank as the servicing bank, is also getting part of the action. Credit card companies? Yeah, they're probably crooks too (but less obvious).

Here's a quote re DCC from the Visa Website:

Some merchants now offer to convert your bill into your home currency. This is called dynamic currency conversion and means the merchant—and not Visa—is converting the currency. As a consumer you may value knowing the exact price in your home currency at the point of sale but you should also know you may be charged extra for this service by the merchant. Visa requires that you are provided a meaningful choice at the point of sale and you have the right to buy your purchase in the local currency so that you do not incur any additional fees the merchant may assess. Visa also requires merchants offering this service to inform you of the exchange rate including any applicable commission being charged. If you choose DCC for a transaction, you receive the merchant rate, not Visa's rate.

Ok, another rehash of DCC. But the part in bold says it all -- and Rimping (and Home Pro) made no effort to provide a "meaningful choice at the point of sale." And they can't plead language barrier (it was my Thai wife shopping).

The 'no cover up' presentation would have been: 'Mrs Gant, would you like to pay an additional 7% for the privilege of instant conversion into dollars?' Of course the truth won't sell. So, some merchants, in trying to comply with Visa/MC instructions to some degree, ask: "Would you like your transaction in foreign currency or your home currency?" For the occasional, unknowing tourist, home currency probably sounds good. But, Rimping didn't even go this far. Nope. Pure phuck the customer.

Bangkok Bank, who's operating the 'spread,' is getting at least half the gouge too.

And Visa (and MC)? Well, Visa no longer calls their 1% charge to issuing banks a "foreign conversion fee." It's now called an International Service Assessment. And they still charge the issuing bank 1%, even if under DCC no conversion took place. And, further serendipity, the issuing bank doesn't have to comply -- when DCC's involved -- with the [uS] law that says 'foreign conversion fees' must be disclosed on the statement.' (Hey, the law said "foreign conversion" fee, not foreign transaction fee.) Thus, for US cardholders, you'll no longer see a two-line entry for foreign purchases divulging conversion costs -- when DCC has occurred. Nice end-run, Visa/MC.

No, there's absolutely nothing in DCC favoring the consumer. It's a complete gouge. But, for the unknowing, it's an easy scam -- worth a lot. And it probably has signed up a lot of merchants unwilling to pay the 1-3% credit card fee on sales -- until DCC's magic wand made this disappear.

So, yes, the credit card companies were complicit in launching this scam.

Which doesn't let Rimping, Home Pro, and many others...... off the hook.

[JimGant]

Generally speaking when it comes to exchange rates, isn't the best way to get the best rate a large transfer at the right time, or a maximum ATM withdrawal from an overseas bank that respects it's customers enough to not charge the sun and the moon

Yes, basically. It sometimes is a wash when comparing ATMs with wire transfers, and their differing exchange rates and fees. Often, when you've a good, low fee ATM card, the deciding difference (if you're a nickel-and-dimer) is the foregone interest earned on funds wired to a low interest-paying bank account.

For credit cards that waive their foreign transaction fees (or offset with a purchase rebate), you'll be better off using such in Thailand vice using Thai plastic from an account with wired-in funds. Why? Because you'll be getting a wholesale rate similar/same to the Interbank Exchange Rate, which is always slightly higher than the rate you get when you wire in money (the TT rate). Plus, wiring money has fees, usually at both ends. So, no fee foreign plastic has a slight edge. But such 'no fee' foreign cards are getting hard to find. And if holding a foreign address and other hassles are involved, the savings over Thai plastic aren't worth it.

(Today, the above applies only to Visa/Plus, which uses onshore rates. MC/Cirrus is using offshore rates -- a temporary situation, I would hope...)

[paulbrun]

There is nothing new in DCC in Thailand, and major establishments have been cashing in on it for a considerable time now

Right. I wasn't trying to reinvent the wheel, as this subject has been recently discussed elsewhere on this forum. (See: This and That

However, by specifically using the CM forum section, I was trying to give a 'heads up' on the local flavor of this scam. Hopefully, others will warn of their entanglements with CM merchants who are using DCC. Sorry to be repetitive for those aleady in the know.

By the way Jim, did you work as a DD, once upon a time..?

Uh, dunno... What in the world is a "DD?"

I just read the rest of your thread, Jim, and found it very informative. Somehow I always get the feeling that the banks are shafting me, but there seems little I can do..? I minimise the number of transactions I make, to reduce the charges, and use my local credit card for most purchases. By the way, a DD is a directional driller, a job in the oilfield. From your discussion, and sound knowledge of financial matters, I would assume that you are NOT one of us..?

[JimGant]

Directional Driller? Hmmmm. Will have to ask the wife.

[likite]

On Feb 7th, the wife used the new Rimping Supermarket for the first time. Usually, we use the two older stores -- and never have had a problem with the Dynamic Currency Conversion (DCC) scam. In fact, looking at the credit card slips, the two older stores don't even have the DCC option. (See the following post if DCC doesn't ring a bell.)

But I hadn't briefed the wife on DCC, and when she checked out of the new Rimping, they used DCC, instantly converting to dollars. The dollar amount was posted on the slip, along with the conversion rate and Thai baht amount. But they never asked if she wanted 'Thai baht or foreign currency,' as Visa and MC say they're supposed to. And even tho' the wife knew there was something a little different about the credit slip, she signed anyway, as, I suspect, would many folks have done if not fully aware of DCC.

Result. She paid over 7% more than she would have if she had been given -- and used -- the option for Thai baht!!! (The exchange rate they used: 32.573. The Interbank Exchange rate used by MasterCared that day: 34.90.)

Interestingly, on the credit slip, next to the signature, it says: "I have chosen not to use the MasterCard currency conversion process and agree that I will have no recourse against MasterCard concerning the currency conversion." Ah, now an ironclad screwjob, as before this was added apparently some disenchanted customers had gone after MasterCard for their 'overpayments.' Now, door shut.

The same day I bought a Nok Air ticket at the airport, using my MasterCard. The credit slip I signed had no dollars mentioned, but the signature line had the following: "I have choosen (sic) not to pay in USD but to settle the payment in THB." This statement, which I confirmed later, means the particular merchant *has* the DCC option, but the option was not used, either because the customer requested Thai baht only, or because (as in the Nok Air case) the merchant automatically gave the better deal to the customer.

Home Pro in CM will automatically use DCC -- unless you insist on Thai baht only. I had to get a supervisor to drive the point home with a particular cashier, but have had no problems since. A cashier even explained about how 'button 1' is for Thai baht only,' while 'button 2' is foreign currency. And that management 'would like us to use button 2.' I bet they would....!!

I have subsequently talked to a supervisor at the new Rimping, and she assures me the cashiers have been briefed about the customer's right to insist on Thai baht only. But I haven't been back to check it out. Would really be nice if the stores would do what they're supposed to and ask up front: "Thai baht or foreign currency?" Easier than having to void a slip that comes out in dollars and asks me to waive my rights.

So far, the 3 merchants mentioned above are the only ones I know of using DCC -- but I'm sure there are many others out there -- or will be. But so far I personally know that Carrefour, Robinson's, and Global don't -- or at least didn't as of January.

The DCC is also used by Siam TV. I bought a TV in there about 8 months ago now and I queried why the amount on the credit slip was in Sterling. Faces all went blank and if I remember correctly they assured me the amount would be in Baht. It was charged in Sterling and the TV cost another 2000 baht because of it.

So another retailer to be aware of!

[Ned]

Cash!

[earlofwindermere]

Thanks for the information on this topic. I rarely look in the other threads so thanks for addressing this topic locally. I had no idea about this.

[jpop]

Add Chiangmai Ram Hospital to that list. Last week they charged me in US$ with an unfavorable exchange rate.

Thanks for the head up OP.

[sceadugenga]

Cash!

Ned, I must be thick or laan beers has effected my brain but I'd no more use my credit card out side a bank than attempt to fly of my own accord.

In the last three years my foreign bank has cheerfully changed my account number twice because of use in both Thailand and Malaysia when frauds occurred in the general region of my usage. That's what using the bloody thing in super markets gets you.

Draw out cash first, then spend.

[JimGant]

Went yesterday to the Rimping on Maejo Road that ripped off the wife in Feb (beginning of this thread). Asked the clerk about Dynamic Currency Conversion, and she said that function was taken out awhile back, as too many customers complained and the clerks got tired of voiding and redoing credit charges. So, I no longer have to waste my breath with "baht only" when I hand over my credit card, at least there.

Will check out Home Pro -- another offender -- next time.

Used Siam TV today, but paid cash, so don't know their latest status.

Rooting out crime wherever I find it........

[ovenman]

Went yesterday to the Rimping on Maejo Road that ripped off the wife in Feb (beginning of this thread). Asked the clerk about Dynamic Currency Conversion, and she said that function was taken out awhile back, as too many customers complained and the clerks got tired of voiding and redoing credit charges. So, I no longer have to waste my breath with "baht only" when I hand over my credit card, at least there.

Noticed the same thing last week while also at Rimping-Meechok Plaza. I can imagine that the clerks probably did get a bit tired of voiding credit transactions after a while.

[Foggy Bottom]

Thanks for the heads up everyone - only just found this thread

Re: Rimping etc pulling DCC - do you think the staffs there now understand just how many farangs live in Chiangmai, how whinging they can be about "double pricing" and how kee-neeow they can be when you try to rip them off?

Will it affect the voting for the new constitution?

Will Bert ever escape from the space ship?

And will Mary finally get her kitchen floor clean?

Tune in to next week's episode of "Soap"

[Austhaied]

Thanks for the heads up everyone - only just found this thread

Re: Rimping etc pulling DCC - do you think the staffs there now understand just how many farangs live in Chiangmai, how whinging they can be about "double pricing" and how kee-neeow they can be when you try to rip them off? No

Will it affect the voting for the new constitution? Absolutely not

Will Bert ever escape from the space ship? He is staying at Top North guesthouse

And will Mary finally get her kitchen floor clean?It's never dirty cause she doesn't cook anything

Tune in to next week's episode of "Soap"Can't wait

[swain]

Sizzler was a big offender but now offers the choice when paying the check. This is a question I had for the longest time. Thanks for the resolution. They said too many people were complaining. So keep on complaining!! You maybe considered a farang that thinks too much but you will make it easier for the rest of us. This should be the place where people post the violators so we can keep harassing them until they comply.

[cnxmike]

The problem is, for the foreign currencies like the USD or the Euro there are two rates at the moment. One rate you get in Thailand and one rate you get outside Thailand. The so called off-shore rate.

In Thailand you get for one Euro about 46 Bt. Outside Thailand it's only about 44 Bt. Whenever you pay with a foreign credit card, it matters a lot, where the conversion is done. If it's done in Thailand you get a better rate.

Here are the off-shore rates for the Euro:

SymbolEuroExchange

RateThai BahtBidAskEURTHB=X1Aug 1043.17243.17243.17243.242

Here are the off-shore rates for the USD:

SymbolU.S. DollarExchange

RateThai BahtBidAskUSDTHB=X1Aug 1031.53031.53031.53031.575

Source:

http://finance.yahoo.com/currency

Here the rates in Thailand:

Currency Exchange Rate Date : 10 August 2007Update : 3 Effective From : 14:45 [unit : Baht per 1 unit of foreign currency]CurrencyDescriptionBank NoteBuying RatesSelling Rates

Bill-DD-TTBuying RatesSelling RatesSight BillTTUSD1USD : 132.9134.24USD5USD : 5-2033.2534.24USD50USD : 50-10033.6734.3033.8433.9434.14GBPUnited Kingdom67.5269.2768.2450068.4225069.06750EUREuro Zone45.9947.0146.1925046.3025046.80750

[cnxmike]

Sorry,

somehow my copy and insert didn't work.

[tracer5050]

As i stay about 1/2 the time between the US and thailand i have found that Bangkok bank has a Bank in New York I transfer Money to the account to Bangkok Bank from my US account . My bank puts it in the bank in as a local tranfer i use my bangkok debit card in thailand .Do i get charged the 3 % charge if it a debit there . I really dont k now ?

[JimGant]

i use my bangkok debit card in thailand .Do i get charged the 3 % charge if it a debit there

No, as the 1 to 3% fees you allude to are "foreign transaction" fees, in your case, buying something in baht, and being billed by your US bank in dollars. No foreign transaction takes place when using your Thai bank debit card, at least in terms of conversion.

A Thai debit card is an obvious way to avoid the DCC scam. The one drawback I'm aware of is getting your account replenished after a fraudster dips into it.

[sabaijai]

On Feb 7th, the wife used the new Rimping Supermarket for the first time. Usually, we use the two older stores -- and never have had a problem with the Dynamic Currency Conversion (DCC) scam. In fact, looking at the credit card slips, the two older stores don't even have the DCC option. (See the following post if DCC doesn't ring a bell.)

But I hadn't briefed the wife on DCC, and when she checked out of the new Rimping, they used DCC, instantly converting to dollars. The dollar amount was posted on the slip, along with the conversion rate and Thai baht amount. But they never asked if she wanted 'Thai baht or foreign currency,' as Visa and MC say they're supposed to. And even tho' the wife knew there was something a little different about the credit slip, she signed anyway, as, I suspect, would many folks have done if not fully aware of DCC.

Result. She paid over 7% more than she would have if she had been given -- and used -- the option for Thai baht!!! (The exchange rate they used: 32.573. The Interbank Exchange rate used by MasterCared that day: 34.90.)

Interestingly, on the credit slip, next to the signature, it says: "I have chosen not to use the MasterCard currency conversion process and agree that I will have no recourse against MasterCard concerning the currency conversion." Ah, now an ironclad screwjob, as before this was added apparently some disenchanted customers had gone after MasterCard for their 'overpayments.' Now, door shut.

The same day I bought a Nok Air ticket at the airport, using my MasterCard. The credit slip I signed had no dollars mentioned, but the signature line had the following: "I have choosen (sic) not to pay in USD but to settle the payment in THB." This statement, which I confirmed later, means the particular merchant *has* the DCC option, but the option was not used, either because the customer requested Thai baht only, or because (as in the Nok Air case) the merchant automatically gave the better deal to the customer.

Home Pro in CM will automatically use DCC -- unless you insist on Thai baht only. I had to get a supervisor to drive the point home with a particular cashier, but have had no problems since. A cashier even explained about how 'button 1' is for Thai baht only,' while 'button 2' is foreign currency. And that management 'would like us to use button 2.' I bet they would....!!

I have subsequently talked to a supervisor at the new Rimping, and she assures me the cashiers have been briefed about the customer's right to insist on Thai baht only. But I haven't been back to check it out. Would really be nice if the stores would do what they're supposed to and ask up front: "Thai baht or foreign currency?" Easier than having to void a slip that comes out in dollars and asks me to waive my rights.

So far, the 3 merchants mentioned above are the only ones I know of using DCC -- but I'm sure there are many others out there -- or will be. But so far I personally know that Carrefour, Robinson's, and Global don't -- or at least didn't as of January.

The DCC is also used by Siam TV. I bought a TV in there about 8 months ago now and I queried why the amount on the credit slip was in Sterling. Faces all went blank and if I remember correctly they assured me the amount would be in Baht. It was charged in Sterling and the TV cost another 2000 baht because of it.

So another retailer to be aware of!

Siam TV must have changed since then. Bought a TV there about three weeks ago, paid with a credit card and was charged in THB.