Retailer currency conversion on foreign cards

My cc is issued by a UK bank in sterling and I use it here all the time with no problems as the exchange rate on the card is commission free. Yesterday I paid in a clothes retailer with it and tapped in my pin with no extra prompting etc. However at the bottom of the receipt it says that I agreed to the retailer charging me in sterling with an inflated exchange rate - which is simply not true. Are retailers allowed to charge in the home currency of your card without asking? I'm used to the question coming up occasionally but this time it was pushed through with no warning, and at a good deal of extra expense. The receipt goes on to state I have "no recourse against Mastercard concerning the currency conversion or its disclosure"

3DataModem

[Deleted User] wrote: »

My cc is issued by a UK bank in sterling and I use it here all the time with no problems as the exchange rate on the card is commission free. Yesterday I paid in a clothes retailer with it and tapped in my pin with no extra prompting etc. However at the bottom of the receipt it says that I agreed to the retailer charging me in sterling with an inflated exchange rate - which is simply not true. Are retailers allowed to charge in the home currency of your card without asking? I'm used to the question coming up occasionally but this time it was pushed through with no warning, and at a good deal of extra expense. The receipt goes on to state I have "no recourse against Mastercard concerning the currency conversion or its disclosure"

They must offer you the choice. The service is called DCC.

Contact your card issuer, and register a complaint.

It is extremely likely that the retailer clicked "yes" to accept the DCC prior to handing you the POS, as many people don't understand it.

Make no mistake, the retailer profits a little more by doing this.

(an Irish invention, by the way!)

coylemj

Deleted User wrote: »

My cc is issued by a UK bank in sterling and I use it here all the time with no problems as the exchange rate on the card is commission free.

I hope you don't think that 'commission-free' means your transactions are being converted at the interbank rate!

There is no such thing as 'commission' for most CC transactions. The credit card make money by charging the trader a % of the value of the sale and they charge the card holder by converting the amount using a rate of about 2.5% off the interbank rate, that's what I pay for Amazon UK purchases on my Irish CC. It used to be lower but seems to be slowly creeping up with the increase in cross-border mail order trade.

If you got a UK credit card based on the carrot of 'commission-free' then you need to look at the exchange rate they are using for non-sterling transactions, especially if you're doing most of your purchases in Ireland.

Deleted User wrote: »

Yesterday I paid in a clothes retailer with it and tapped in my pin with no extra prompting etc. However at the bottom of the receipt it says that I agreed to the retailer charging me in sterling with an inflated exchange rate - which is simply not true. Are retailers allowed to charge in the home currency of your card without asking?

The default is to charge for an item in the retailer's home currency but some retailers (hotels are the worst) will try it on when they see you've a foreign card. It's up to you to check this before you enter your PIN. Otherwise as you've found out, the retailer's FX rate will rip you off.

I'm aware it's not the interbank rate I'm getting on my card but am happy with the rate I do get from them as it is much more favourable than retailer conversions. Thanks for the advice, both of you.