Currency Conversion Scheme is a Tourist Trap

As a visitor to Europe you may be asked to pay 4 percent or 5 percent more than locals do for the same meal or hotel room. How? Via something called "Dynamic Currency Conversion." We put it in the "scam" category.

Some European establishments now offer a "service" called "Dynamic Currency Conversion" (DCC). For North Americans, this rip-off translates hotel and restaurants bills on the spot from local currency to Canadian or U.S. dollars. For those more comfortable knowing to the penny the amount in dollars that will appear on their credit card invoice, DCC might be of mild interest - provided it were free. But it is not.

This is from the website of Planet Payment, a seller of DCC: "The cardholder gets the benefit of transacting in his own currency, while the merchant and acquirer/processor participates in a significant new revenue stream." Naturally.

According to the San Francisco Chronicle, DCC adds 4 percent to 5 percent to each transaction, a huge and unnecessary fee. To know, for example, the exact amount in dollars you will ultimately pay on a five-day, $500 hotel bill will cost an additional $24 to $30.

There is no earthly reason for DCC, other than to enable its perpetrators, and the greedy hotels and restaurants that subscribe to this useless "service," to relieve you of your money. It is a transparent con aimed solely at foreign visitors.

When in Europe, if you are presented with a bill in dollars, do not accept it. Demand to pay in local currency. All credit card transactions should be processed in local currency and converted to dollars by Visa or MasterCard on your monthly statement.

Here's the best analysis we've seen of DCC

Please e-mail us the names of any hotels and restaurants that ask you to pay your bill in other than local currency.