I got nailed with a dynamic currency conversion charge at Schiphol Airport in Amsterdam last weekend, although I had sworn I wouldn’t let that happen.
I’m talking about the practice of converting a transaction in a foreign currency to the customer’s native currency for a fee – usually 2 or 3 percent of the transaction amount. Unless you’re getting spectacularly ripped off by a bad credit card, this is always a raw deal. Your credit card will give you a better rate, and some cards have no surcharge at all.
Paying for dynamic currency conversion gets you absolutely nothing except the illusory comfort of paying in a familiar currency. In other words, it’s a rip-off.
Unfortunately, the practice seems to be growing in the European Union. Tourists from the United States and Great Britain, which has not adopted the euro, are paying the price.
Here’s what happened to me in Amsterdam.
When I got the credit card charge slip for some chocolates I bought at a duty-free shop, the charge had been converted to dollars. When I objected, and told the clerk that I would prefer to pay in euros, she insisted that it made no difference.
"It’s the same. It’s the same," she said, obviously confused.
It’s not the same. As I’ve pointed out before. The slip clearly said:
Cardholder has chosen to pay in USD. This transaction is based on SEB Bank Wholesale exchange rate plus 3,0000% international conversion margin. My choice is final. Transactions can also be conducted in EUR.
As Visa explains on its Web site about dynamic currency conversion:
Visa requires that you be provided a meaningful choice at the point of sale and you have the right to buy your purchase in the local currency to avoid any additional fees the merchant may assess.
I tried to explain to the clerk that she was supposed to give me a choice, and that by converting to U.S. dollars she had subjected me to a 3 percent charge. (I really do believe that she didn’t understand that.)
Given the language barrier and a line of increasingly impatient customers behind me, I calculated the charge in my head, realized that it came out to about 75 cents, and gave up. I signed the slip and left, frustrated and annoyed.
I had just made a credit card purchase in another duty-free shop and had been charged in euros without question. But I can see that, increasingly, clerks are not trained to offer the choice or to understand the implications.
So from now on, whenever charging something on a credit card outside the United States, I will specify in advance that I want the charge made in the local currency.