Profiting From Ignorance About Currency Conversion

I was just reading Chris Elliott’s highly entertaining analysis of the schedule for the annual Ancillary Revenue Airline Conference, which is where nickel-and-diming is celebrated as a high art.

One of the seminars that Chris mentioned really caught my eye: “Profiting from Dynamic Currency Conversion (DCC) — Paul K. Ackermann, Vice President, Head of Sales – North America, Travelex”

I could actually feel my blood pressure rising when I read it. So let me repeat what I’ve said before: dynamic currency conversion is a rip-off, plain and simple. Don’t fall for it, and if anybody tries to force it on you, scream like hell.

Dynamic currency conversion consists of charging customers in their own currency for a purchase in a foreign currency — at an inflated rate. The customers always pay more for the “benefit” of seeing the charge in a familiar currency. The merchant shares the extra profit with the company that performs the conversion. And credit card companies may still charge the usual “foreign transaction” fee.

Last time I criticized dynamic currency conversion, I heard plenty from merchants and the companies that offer it. They did not convince me. And there is not a consumer advocate alive who will tell you to accept a dynamic currency conversion.

Credit card companies require merchants to give an option to decline dynamic currency conversion, but I have had it applied without my consent several times.

Say what you will about most airline fees — and I’ve said plenty — you usually get something for them. It might be something you used to get at no extra charge and it might not be worth what you’re paying but at least there is some tangible benefit attached — your bag gets transported, you get a soda or a pillow. Something.

But dynamic currency conversion offers nothing. The “benefit,” “convenience”  and “choice” it supposedly offers are absolutely worthless. It’s just about taking your money and it has been so abused by merchants that it just simply ought to be illegal.


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