Don’t Fall For Dynamic Currency Conversion

We were annoyed by the poor service, lousy food and ridiculous prices at a restaurant in Toledo, Spain, but I would not have caused a scene if the management had not tried to finish it all off with a pernicious practice called dynamic currency conversion.

We had set out to eat at a popular chain restaurant in the historic part of Toledo, but the place was jam-packed. It was Holy Week, and there were tourists everywhere. So we settled on a deserted place next door, pretty sure it would be a mistake but too hungry to care.

It was the worst meal we had in Spain, and it was overpriced to boot. But we were prepared to grin and bear it – until I got the bill and found that the charge was listed in U.S. dollars

How nice, you might think. They’ve converted the currency for us. But what they had done was add a 2.5 percent charge to the currency conversion fee already charged by Visa, simply for the “convenience” of seeing the charge in dollars.

Worse, when I said that I preferred to pay the charge in euros because my credit card offers a better rate, the waitress insisted that I was being charged in euros despite the very clear notation on the receipt that the transaction currency was U.S. dollars and that it included a 2.5 percent surcharge above the credit card’s exchange rate. When I said I’d pay in cash (meaning euros) the manager claimed he couldn’t cancel the transaction.

I told them both that I hadn’t signed the credit card receipt, that I would pay in cash and that I would call my credit card company to contest the charge. All of which I did.

Later, examining the bill, I found that it said, in English: “I accept that I have been offered a choice of currencies for payment. I accept the conversion rate and final … ” before the receipt was cut off at the bottom. This is in keeping with Visa’s statement that it allows dynamic currency conversion only when the customer has been given a choice of currencies. I was never offered that choice, and was refused it when I asked for it.

The next day the waitress spotted us in another cafe and came by with another waitress who spoke English to give me the receipt for the canceled transaction. I thanked her for canceling it, which saved me some paperwork with my credit card company. But when she insisted that I’d misunderstood her the night before because of language difficulties, I told her in Spanish that I had understood very well what was going on. (In retrospect, I’m not really sure she did.)

One ATM that I used in Spain also offered to charge my withdrawal in dollars, but it very clearly allowed me the option of charging it in euros. I chose euros.

In either case, the surcharge to convert the transaction to U.S. currency was just a few dollars. But that’s not the point. Dynamic currency conversion is a rip-off, a parasitic drain of a small percentage on every purchase a traveler makes. Consumers get nothing from this but the certainty of knowing exactly how much they’ve been overcharged.

The Washington Post spotted this trend and laid it all out in an article nearly two years ago.

So do yourself a favor and get a credit card that offers a good exchange rate and refuse to be ripped off by dynamic currency conversion.


One thought on “Don’t Fall For Dynamic Currency Conversion


    I have the same problem when I go to the Canary Islands (part of Spain off the coast of Africa). Merchants usually act stupid and say that the machine is set up to convert. If this is the case I usually get cash from an ATM. My bank NATIONWIDE building society makes no charge for drawing cash from my current account whilst abroad and they give the best rate for the day. i.e tourist rate 1.40 Euros to the £, Nationwide (VISA) 1.47 Euros.
    We just have to keep trying to get the merchants to charge in local currency!!!


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