Initiating a Charge-back to Recover Unauthorized DCC Fees (pay in your currency charges)

Using a chargeback to teach a merchant how to use dcc

The first part of this article was “I Was Forced to Accept “Pay in your own Currency”. What Can I do now?“.  In that section, I explained the costs involved and how much of a rip-off it is.  I also told you what to do to prevent being scammed by DCC.  As a reminder …

1.  TELL THE MERCHANT as you are handing the card to the merchant, “Charge in [LOCAL CURRENCY]“.  Or in Thailand, “Charge in Thai Baht”; in France, “Charge in Euro”.  Make it clear!

2.  When the merchant hands the receipt to you to sign, look at it carefully.  If it has TWO amounts in TWO different currencies, there is a good chance you have been charged through DCC.  The amount closest to your signature should be the amount in YOUR home currency (the currency of the issuing card).  Ask the merchant to void this transaction and re-run as [LOCAL CURRENCY] without DCC.

3.  Some people say to tell the merchant to VOID the transaction and give them an American Express (because AE doesn’t accept DCC), or pay cash.  I disagree.  Stand your ground and tell them that you want it charged in their currency and not yours.  Keep refusing to sign the receipt.

[In Thailand, our biggest bank is Bangkok Bank.  We use that as the example, telling the merchant “CHARGE ME JUST LIKE BANGKOK BANK CARD” — because DCC is never used for a local card].

4.  If you get nowhere, put an “x” through the disclaimer that says something like “customer has been given a choice to pay with his home currency” etc.  Above your signature write “DCC REFUSED”; then sign your name.  BEFORE RETURNING THE RECEIPT, take a photo of the receipt with your smart phone.

When you get home, DISPUTE THE TRANSACTION.  It is worth it on principle.  Merchants and their staff need to be taught the correct way to use DCC.


Visa international operating regulations state (p 493):

  • Merchants that offer DCC must be compliant with the regulations
  • Inform the cardholder that DCC is optional
  • Not impose any additional requirements to use local currency
  • Not use any language or procedures that may cause the cardholder to choose DCC by default
  • Not convert a transaction in the local currency to the card’s billing currency after the transaction has completed
  • Ensure that the cardholder expressly agrees to DCC

File your dispute using Reason Code 76:   “Incorrect Currency or Transaction Code”.  Reason Code 76 is used when the transaction was processed with an incorrect transaction code, or an incorrect currency code, or one of the following:

  • Merchant did not deposit a transaction receipt in the country where the transaction occurred
  • Cardholder was not advised that Dynamic Currency Conversion (DCC) would occur
  • Cardholder was refused the choice of paying in the merchant’s local currency      [“Language issues” and “incompetent staff” falls under this “refusal”.]
  • Merchant processed a credit refund and did not process a reversal or adjustment within 30 calendar days for a transaction receipt processed in error

MasterCard’s rules also clearly state that the POI Currency Conversion must be decided by both the merchant and customer. When filing a dispute with a MasterCard, list chargeback Reason Code 4846 from the MasterCard Chargeback Guide, which covers POI currency conversion disputes in the following circumstances:

  • The cardholder states that he or she was not given the opportunity to choose the desired currency in which the transactions was completed or did not agree to the currency of the transaction, [“Language issues” and “incompetent staff” falls under this “lack of opportunity to refuse”.]

  • POI currency conversion took place into a currency that is not the cardholder’s billing currency, or
  • POI currency conversion took place when the goods or services were priced in the cardholder’s billing currency, or
  • POI currency conversion took place when cash was disbursed in the cardholder’s billing currency.

Thanks to flyer talk for the updated chargeback information.

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